Custom Test Panels Come With Compliance Risks

Ask the Expert

Gregory RootExpert: Gregory Root, Esq.

Why is the federal government investigating custom test panels?
A: The Office of the Inspector General (OIG) has repeatedly stated its concern that the use of custom panels will result in medically unnecessary testing. Submitting claims for medically unnecessary testing is a violation of the Civil False Claims Act. OIG fears that physicians will grow accustomed to ordering set groups of tests and not make independent medical necessity determinations for each and every test included in the panel. The OIG also fears that ordering physicians may not be fully aware of the component tests included in custom panels and the associated coding and reimbursement practices. The Department of Justice is currently investigating a number of labs and their use of custom panels.

How can labs avoid getting into trouble?
Labs should only create custom panels at the request of an ordering physician, and ensure the physician is the primary decision-maker when it comes to which tests a custom panel includes. When creating a custom panel, labs should use a standardized form that includes the component tests, associated CPT codes, and Medicare reimbursement. The physician should sign and date the form.

Annually, the lab should send a physician acknowledgement to all who order custom panels. The acknowledgement should include the component tests, associated CPT codes, and resultant Medicare reimbursement. The physician should sign and date this form as well.

It's also critical to thoroughly document all aspects of creating, using, and changing any custom panels. All new custom panels should be approved by the Chief Compliance Officer, and all laboratory personnel that interact with clients should be trained in the compliance issues and safeguards associated with custom panels.

Labs should consider setting a limit for the maximum number of tests that will be included in any custom panel.

All order entry systems should effectively communicate to the ordering physician the component tests and associated CPT codes of custom panels.

Are there red flags for which OIG is on the lookout?
Overall, the greater the number of tests included in a custom panel, the greater the risk that at least some of the procedures are not medically necessary. In addition, labs should never require a new account to create a custom panel as part of the client setup process, and labs should not directly tie the use of custom panels to financial considerations such as pricing or arrangements for services.

Finally, labs should be on the lookout for aberrant custom panel ordering patterns, such as the clients of a single sales representative all ordering unusually large custom panels. Sales representatives should not drive the custom panel process, the ordering physicians should.

Gregory Root is chief operating officer and general counsel of CodeMap, a laboratory reimbursement and compliance consulting firm. +Email:

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