Deeper Than the Headlines: Unnecessary Tests

A Jacksonville, FL area pain clinic, Coastal Spine and Pain, recently settled with the U.S. Department of Justice for $7.4 million to resolve allegations that it billed for medically unnecessary drug screening procedures.

Typically, when patients’ urine samples are screened for drugs, the type of test that is completed is known as a qualitative drug screen. This type of test identifies the presence or absence of a drug, not the amount. Qualitative tests are usually less expensive than tests that determine the amount of a drug in a specimen, known as quantitative drug tests.

In the case of Coastal Spine and Pain, the government alleged that even though the clinic’s use of qualitative drug screening was appropriate, the clinic always performed the additional, and more expensive, quantitative drug tests. The government stated the clinic did this 100% of the time, regardless of the result of the initial qualitative screening test. The government contended this was medically unnecessary, as there was no reason to question or further confirm previous qualitative urine drug testing screens. 

In contrast to the many settlements which originate from whistleblowers, this settlement was the result of proactive efforts by the government. Through the use of data analytics, the government identified the clinic as a data outlier for these particular tests. According to HHS OIG official, Shimon Richmond, “New and expanded uses of data analytics to identify suspicious billing patterns, such as in this case, are providing law enforcement agencies with powerful investigative tools to combat fraud and abuse in federal healthcare programs.”

Many Medicare Administrative Contractors or MACs have Local Coverage Determination (LCD) policies regarding urine drug testing. These LCDs often state that quantitative drug screening (or definitive drug testing, as used in the LCD) is not appropriate to perform on every patient. For example, one LCD contains this language in regards to definitive drug testing:

“Physician-directed definitive profile testing is reasonable and necessary when ordered for a particular patient based upon historical use and community trends. However, the same physician-defined profile is not reasonable and necessary for every patient in a physician’s practice. Definitive UDT orders should be individualized based on clinical history and risk assessment, and must be documented in the medical record.”

In addition to your local LCD, another excellent resource for development of a compliance program which involved laboratory testing and billing is the HHS OIG compliance program guidance for laboratories (

These guidelines provide laboratory specific compliance standards. One such recommendation from the OIG involves how a practice or any entity that is going to bill for laboratory services should design the order form (aka requisition form):

“…laboratories should construct the requisition form to capture the correct program information as required by Federal or private health care programs and to promote the conscious ordering of tests by physicians or other authorized individuals. The laboratory should construct the requisition form to ensure that the physician or other authorized individual has made an independent medical necessity decision with regard to each test the laboratory will bill. Laboratories should encourage physicians or other authorized individuals to submit diagnosis information for all tests ordered, as documentation of the medical necessity of the service.”

In the case of Coastal Spine and Pain, one has to wonder if there was a billing policy put in place, or some direction from management to always perform and bill a quantitative drug test after a qualitative test had been performed. It seems that the alleged billing problem would have been unlikely to occur if an order form had been designed in such a way so as to “promote the conscious ordering of tests by physicians” or if the design of the form would “ensure that the physician or other authorized individual has made an independent medical necessity decision with regard to each test the laboratory will bill.”

Beyond the specifics of laboratory compliance, this settlement highlights the importance of having a system in place to analyze your own billing data as a vital component of an effective compliance program, regardless of the types of services billed. Such analysis can help you pinpoint aberrant billing patterns and “find the needle in the haystack,” so to speak, when it comes to potential billing compliance issues. The days of random, shotgun-type, billing audits are in the past. While there may always be a place for some random billing audits, the more mature compliance programs are becoming smarter in the way they manage billing audits and the use of data analytics.

Additionally, most compliance programs have a finite amount of resources. If your program can only spend 15 hours a week on billing audits, for example, you’ll want to make sure they are meaningful hours. You want to get the biggest bang for your buck in auditing hours. And, you want to find internal issues before the OIG, or another government entity, uses their data analytics to pinpoint your organization as an outlier in some billing practice.

Questions or Comments?