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Congress expanding scrutiny of clinical labs.

What began as a rather routine review of clinical laboratory regulation and quality control is quickly turning into a full-blown siege of lab pricing patterns and work procedures.

First off the mark in the 1988 Congressional session was Rep. Ron Wyden (D-Ore.), who led hearings on quality control mechanisms in early March (see Washington Report, April MLO). Those meetings were quickly followed by other House hearings on laboratory fraud and abuse in Medicaid, and by Senate sessions on possible Federal legislation and regulation.

Concerns on Capitol Hill were triggered by media reports of medical disasters stemming from poorly performed or misinterpreted lab tests. Now that Congress has been jabbed, it may declare an "open season" for new legislation. Representative Wyden has stated he will soon advance a proposal to enforce compliance with quality assurance programs, while other lawmakers appear close to taking up their pens on related matters.

Opening a recent House Energy and Commerce Subcommittee hearing, Rep. John Dingell (D-Mich.) proclaimed: "Fraud, gross overcharging, kickbacks, and poor quality of care are rampant in this industry, and Federal oversight has been nonexistent. . .One only has to scratch the surface to find a pervasive pattern of highly questionable financial arrangements between laboratories and doctors."

Representative Dingell apparently was referring to testimony from HHS Inspector General Richard Kusserow, who believes fraud and abuse are more wide-spread among state-administered Medicaid programs than within Medicare.

Kusserow stated it is "difficult to quantify the extent of the problem" regarding abusive practices. But he detailed several "prevalent schemes" such as kickbacks, billing for services not rendered ("sink testing"), and unauthorized or excessive tests performed.

During the same hearings, Massachusetts Attorney General James Shannon said a widespread investigation in his state showed clinical laboratories"drastically overcharging Medicaid for services rendered and engaging in other abuses."

Shannon said reforms in his state's laws and enforcement have thus far led to the recovery of more than $1.5 million in civil agreements from labs for alleged violations. He implied the supposed infractions related to kickbacks, wherein a lab might "rent" space from a physician or pay part of the wages of his staff.

Shannon also said four national reference laboratories operating in his state have been sanctioned. Typically, the laboratories had two sets of test prices: a low rate for the 15 per cent of tests directly ordered by doctors and a much higher price for the remaining services billed to Medicaid, Medicare, or an insurance company.

After several law changes in Massachusetts, the price of a battery of blood tests reportedly dropped from $14 to $2.30.

"While I will speak only to our experiences in Massachusetts, it is likely that similar problems exist in many other states across the country," Shannon said.

Few things perk up members of Congress-especially in an election year-more than phrases like that. And despite lobbying efforts, many Washington officials seem to lack an understanding of what laboratory testing is all about. Further, little has come from the Reagan Administration to allay growing worries.

William Roper, head of the Health Care Financing Administration, did testify that his agency is about to issue regulations covering proficiency testing, personnel qualifications, and quality assurance. Although he did not discuss specifics, Roper said the forthcoming regulations would include national criteria for uniform proficiency testing and requirements appropriate for new technologies and methodologies used in clinical labs.

Roper added that the long-awaited report to Congress on physicians' office lab (POL) testing would be delivered by May 1. The study will address such factors as the scope, type, and complexity of testing in office We hope the report will provoke public debate on the emergence of sound public policy options that will assist us in developing regulations for high-volume physician office laboratories for implementation on Jan. 1, 1990," said Roper.

POL testing was also a subject of discussion at hearings of the Senate Governmental Affairs Oversight Subcommittee.

At that session, the American Society of Internal Medicine repeated its position that all laboratories-including POLs-should be required by the Government to participate in appropriate quality assurance activities.

ASIM President William R. Smith, M. D., told members of the subcommittee that "one need not accept the view that there is a 'crisis' in the quality of physician lab testing to believe that more can be done to demonstrate the medical profession's commitment to assuring quality lab work for patients."

Smith stated that the country has "moved beyond the point where quality assurance should be left to voluntary initiatives alone. The stakes are simply too high." He suggested, however, that Federal regulation should build upon voluntary programs currently in existence, such as the ASIM's Medical Laboratory Evaluation Program. The ASIM president concluded that POLs provide an important service to patients, a point that should be recognized under any Federal policies to protect quality.

Also at the Senate hearings, the American Society for Cytotechnology extended its support for immediate regulatory action by both the Government and professional organizations.

Patricia Ashton, a spokesperson for the ASCT, said the group "favors a comprehensive laboratory inspection program that includes verification of cytotechnologist and pathologist workloads and diagnostic accuracy. The ASCT has developed an extensive inspection document that details guidelines for scrutiny of every aspect of the laboratory operation. The ASCT wants very much to participate in any effort to monitor and maintain quality assurance in cytopathology. "

Specifically, Ashton said the ASCT recommends mandatory proficiency testing of cytotechnologists and pathologists; workload guidelines based on ASCT recommendations; documentation of those workloads; retrospective screening of negative Pap smears from high-risk patients; and lab inspection by trained, experienced cytotechnologists.

Panel members heard additionally from the American Society of Clinical Pathologists, which was on hand to warn that Federal payment pressures are taking a toll on testing quality.

A statement filed by the group said: "There is a real concern in some areas about serious financial disincentives to produce a quality product. Reimbursement must be adequate to permit laboratories to provide quality testing. Cytology testing is an example of a situation in which problems can arise from such financial pressures. As payment for laboratory testing in general is tightened, these problems can be expected to occur in other areas."

The ASCP specifically urged greater Federal support for the funding of personnel training, including loan programs for all undergraduate allied health profession students.

In even broader testimony, the American Association for Clinical Chemistry presented the panel with six principles addressing quality assurance. Summarized, they are:

* Clinical labs of all sizes should be regulated by a voluntary, independent agency approved by the Federal Government.

* There should be one uniform set of national standards for all labs, including POLs.

* There should be one uniform national set of laboratory personnel standards for each level of staff position.

* Continuous, successful participation in a proficiency testing program (ideally including blind proficiency testing) should be required.

*Both regular, announced inspections and periodic, unannounced inspections should be required.

*Lab equipment, supplies, reagents, and instruments should meet appropriate performance standards as defined in regulations.

The AACC further used the opportunity to oppose CAP accrediting standards that allow doctoral-level clinical scientists to direct a lab only in exceptional circumstances when a physician is not available. "The AACC believes these standards are anti-competitive and unfair," its statement said. "Qualified laboratory directors could be unreasonably forced out of currently held directorship positions. AACC advocates a broad-based, national, voluntary organization to develop standards. "

Sen. William Cohen (R-Me.), Who chaired the hearings, has said he will evaluate the remarks of all the groups testifying and consider the need for introducing legislation later this year.
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Publication:Medical Laboratory Observer
Date:May 1, 1988
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