Health Hippo: Labs, Diagnostic Facilities & Telemedicine

Health Hippo: Labs, Diagnostic Facilities & Telemedicine


Conclusions which are merely verbal cannot bear fruit, only those do which are based on demonstrated fact.

Pursuant to the Public Health Security and Bioterrorism Preparedness and Response Act, the Federal Select Agent Program oversees the possession, use and transfer of biological select agents and toxins, which have the potential to pose a severe threat to public, animal or plant health or to animal or plant products. In the years following enactment, OIG has enforced the Act through civil monetary penalties against laboratories.

U.S. Code

  • Affordable Care Act: Transparency and Program Integrity
    • Sec. 6001. Limitation on Medicare exception to the prohibition on certain physician referrals for hospitals.
    • Sec. 6002. Transparency reports and reporting of physician ownership or investment interests.
    • Sec. 6003. Disclosure requirements for in-office ancillary services exception to the prohibition on physician self-referral for certain imaging services.
  • Protecting Access to Medicare Act of 2014 Includes provisions that implement a new payment system for clinical laboratory tests.

Code of
Federal Regulations

    • SUBCHAPTER A GENERAL (Parts 1 to 99)
  • 21
    CFR Sec. 800.20
    Patient examination gloves and surgeons’ gloves

  • 29 CFR 1910.1030 Bloodborne pathogens
  • 42 CFR Sec. 410.32 Diagnostic X-ray tests, diagnostic laboratory tests
    • SUBPART A General Provisions (493.1 – 493.25)
    • SUBPART B Certificate of Waiver (493.35 – 493.39)
    • SUBPART C Registration Certificate, Certificate for Provider-performed Microscopy Procedures, and Certificate of Compliance (493.43 – 493.53)
    • SUBPART D Certificate of Accreditation (493.55 – 493.63)
    • SUBPART E Accreditation by a Private, Nonprofit Accreditation Organization or Exemption Under an Approved State Laboratory Program (493.551 – 493.575)
    • SUBPART F General Administration (493.602 – 493.649)
    • SUBPART G [Reserved]
    • SUBPART H Participation in Proficiency Testing for Laboratories Performing Nonwaived Testing (493.801 – 493.865)
    • SUBPART I Proficiency Testing Programs for Nonwaived Testing (493.901 – 493.959)
    • SUBPART J Facility Administration for Nonwaived Testing (493.1100 – 493.1105)
    • SUBPART K Quality System for Nonwaived Testing (493.1200 – 493.1299)
    • SUBPART L [Reserved]
    • SUBPART M Personnel for Nonwaived Testing (493.1351 – 493.1495)
    • SUBPART N – P [Reserved]
    • SUBPART Q Inspection (493.1771 – 493.1780)
    • SUBPART R Enforcement Procedures (493.1800 – 493.1850)
    • SUBPART S [Reserved]
    • SUBPART T Consultations (493.2001 – 493.2001)


  • Liberty Laboratory (DAB 2014)(allegations of surveyor bias and procedural flaws in conduct of survey irrelevant where evidence demonstrated laboratory’s failure to meet required conditions)
  • Southlake Emergency Care Center (DAB 2011)(CMS had authority to revoke CLIA certificate because owner operated another laboratory whose CLIA certificate was revoked within the preceding two-year period)
  • CARI Reproductive Institute (DAB 2010)(petitioner cannot avoid revocation of CLIA certificate by requesting voluntary withdrawal from CLIA or termination of its CLIA certificate).
  • Saint Elizabeth’s Medical Center (DAB 2010)(running samples on other laboratory’s analyzer constituted an “intentional referral” of proficiency testing (PT) samples to another laboratory under CLIA and justified revocation)


  • Clinical Laboratory Improvement Amendments The regulations, educational materials and announcements.
  • MedPac: Clinical Laboratory Services (2014) Clinical lab services are tests on specimens taken from the human body (such as blood or urine) that are used to diagnose and treat patients. With a few exceptions, Medicare does not cover routine screening tests unless directed to by law. Covered screening tests (with some restrictions) include cardiovascular screening tests, colorectal cancer screening tests, Pap smear tests, and prostate-specific antigen tests.
  • Medicaid: Telemedicine For purposes of Medicaid, telemedicine seeks to improve a patient’s health by permitting two-way, real time interactive communication between the patient, and the physician or practitioner at the distant site. This electronic communication means the use of interactive telecommunications equipment that includes, at a minimum, audio and video equipment.
  • Laboratory Developed Tests (FDA 2014) A laboratory developed test (LDT) is a type of in vitro diagnostic test that is designed, manufactured and used within a single laboratory. The FDA does not consider diagnostic devices to be LDTs if they are designed or manufactured completely, or partly, outside of the laboratory that offers and uses them.
  • Special Fraud Alert: Laboratory Payments to Referring Physicians (OIG 2014) Addresses compensation paid by laboratories to referring physicians and physician group practices for blood specimen collection, processing, and packaging, and for submitting patient data to a registry or database.
  • Questionable Billing for Medicare Part B Clinical Laboratory Services (OIG 2014) Clinical lab services include a range of chemical and other types of examinations of specimens taken from the human body for the diagnosis, prevention, or treatment of a disease or assessment of a medical condition.1 Some of the most common lab services are complete blood counts, lipid panels (tests for cholesterol screening), and urinalyses.
  • Telehealth Services (CMS 2013) Fact sheet from CMS covering: Originating sites; Distant site practitioners; Telehealth services; Billing and payment for professional services furnished via telehealth; Billing and payment for the originating site facility fee; Resources; and Lists of helpful websites and Regional Office Rural Health Coordinators.
  • Action Needed to Address Higher Use of Anatomic Pathology Services by Providers Who Self-Refer (GAO 2013) GAO estimates that in 2010, self-referring providers likely referred over 918,000 more anatomic pathology services than if they had performed biopsy procedures at the same rate as and referred the same number of services per biopsy procedure as non-self-referring providers. These additional referrals for anatomic pathology services cost Medicare about $69 million.
  • High-Containment Laboratories: Assessment of the Nation’s Need Is Missing (GAO 2013) Since the publication of our report in 2009, the number of high-containment laboratories has increased. Although modern high-containment technologies (for example, high-efficiency particulate air [HEPA] filtration) in conjunction with laboratory design have been effective in reducing the level of risk, there is nevertheless some degree of risk associated with design, construction, operations, and maintenance of high-containment laboratories.
  • Federal Inspections of Entities Registered with the Select Agent Program (GAO 2013) About 15 percent of entities registered to work with select agents were subject to inspection overlap (multiple federal agencies inspecting within a 2-year period). Entities experiencing overlap tended to be larger ones, with more laboratories, principal investigators, and staff.
  • Questionable Billing for Polysomnography Services (OIG 2013) Polysomnography is a type of sleep study conducted to diagnose medical conditions that affect sleep (e.g., sleep apnea) and to evaluate the effectiveness of positive airway pressure (PAP) devices (a type of treatment device for sleep apnea). In 2011, Medicare paid over 1 million claims for polysomnography services, totaling almost $565 million.1 Medicare spending on polysomnography increased from $407 million to $565 million
    (39 percent) from 2005 to 2011.

  • Comparing Lab Test Payment Rates: Medicare Could Achieve Substantial Savings (OIG 2013) Medicare is the largest payer of clinical laboratory (lab) services in the Nation. It paid approximately $8.2 billion for lab tests in 2010, which accounted for 3 percent of all Medicare Part B payments. Prior to this evaluation, there had not been a comparison of Medicare payment rates to those of other health care service payers. Such a comparison will help ensure that Medicare is a prudent purchaser of lab services.
  • Coverage and Payment for Genetic Laboratory Tests (OIG 2013) To determine (1) how the methods for establishing Medicare laboratory test payment rates vary from State Medicaid and FEHB programs, and (2) the extent to which 2011 Medicare payment rates for 20 high-volume and/or high-expenditure laboratory tests vary from State Medicaid and FEHB plans.
  • HHS Public Health and Medical Services Emergency Support Preparedness (OIG 2012) HHS has participated in preparedness activities to fulfill its Coordinator, Primary, and Support agency ESF responsibilities. However, other ESF Coordinator and Primary agencies did not always report having a clear understanding of HHS’s Support agency role and available resources during incident response.
  • Anthrax: DHS Faces Challenges in Validating Methods for Sample Collection and Analysis (GAO 2012) A workgroup—led by the U.S. Department of Homeland Security (DHS) and made up of DHS and the Centers for Disease Control and Prevention (CDC), the Environmental Protection Agency (EPA), the Federal Bureau of Investigation (FBI), and the National Institute of Standards and Technology (NIST)—has attempted to address GAO’s recommendations to (1) validate environmental sampling methods for detecting Bacillus anthracis and (2) conduct studies to develop probability-based sampling approaches for indoor environments.
  • Higher Use of Advanced Imaging Services by Providers Who Self-Refer Costing Medicare Millions (GAO 2012) GAO estimates that in 2010, providers who self-referred likely made 400,000 more referrals for advanced imaging services than they would have if they were not self-referring. These additional referrals cost Medicare about $109 million. To the extent that these additional referrals were unnecessary, they pose unacceptable risks for beneficiaries, particularly in the case of CT services, which involve the use of ionizing radiation that has been linked to an increased risk of developing cancer.
  • Questionable Billing for Medicare Independent Diagnostic Testing Facility Services (OIG 2012) We recommend that CMS: (1) monitor IDTF claims for questionable characteristics, (2) take appropriate action when IDTFs submit a high number of questionable claims, and (3) assess whether to impose a temporary moratorium on new IDTF enrollments in CBSAs with high concentrations of IDTFs. CMS concurred with all of our recommendations.
  • Coverage and Payment for Genetic Laboratory Tests (OIG 2012) Information for CMS’s use in setting Medicare coverage and payment policies for genetic tests.
  • Nonfederal Capabilities Should Be Considered in Creating a National Biosurveillance Strategy (GAO 2011) The nation is at risk for a catastrophic biological event. The Implementing Recommendations of the 9/11 Commission Act directed GAO to report on biosurveillance–to help detect and respond to such events–at multiple jurisdictional levels. In June 2010, GAO recommended that the National Security Staff lead the development of a national biosurveillance strategy, which is now under development.
  • Actions Needed to Improve Response to Potential Terrorist Attacks and Natural Disasters Affecting Food and Agriculture (GAO 2011) There is no centralized coordination to oversee the federal government’s overall progress implementing the nation’s food and agriculture defense policy– HSPD-9. At one time, the White House Homeland Security Council and DHS took steps to gather and coordinate information about agencies’ efforts to implement HSPD-9, but no agency currently does so.
  • Medicare Payments for Diagnostic Radiology Services in Emergency Departments Report (OIG 2011) The extent to which, in 2008, Medicare allowed claims for interpretation and reports of diagnostic radiology services—specifically computed tomography (CT), magnetic resonance imaging (MRI), and x-ray services—performed in hospital outpatient emergency departments that: 1. met Medicare documentation requirements, 2. were performed before beneficiaries left the hospital outpatient emergency departments, and 3. followed suggested documentation practice guidelines promoted by the American College of Radiology.
  • CLIA Proficiency Testing (CDC 2010) Regulations for microbiology.
  • Biological Laboratories: Design and Implementation Considerations for Safety Reporting Systems (GAO 2010) As the number of biological labs increases, so too do the safety risks for lab workers. Data on these risks–collected through a safety reporting system (SRS) from reports of hazards, incidents, and accidents–can support safety efforts. However, no such system exists for all biological labs, and a limited system–managed by the Centers for Disease Control and Prevention (CDC) and the Animal and Plant Health Inspection Service (APHIS)–applies to only a subset of these labs.
  • HHS Action Needed to Obtain Nationally Representative Data on Risks in Ambulatory Surgical Centers (GAO 2009) Recent high-profile cases of HAIs in ambulatory surgical centers (ASC) due to lapses in recommended infection control practices may indicate a more widespread problem in ASCs, but the prevalence of such lapses is unknown.
  • CDC’s CHEMPACK Project: Nerve Agent Antidote Storage (OIG 2009) In 2004, CDC established the CHEMPACK project as part of an approximately $3.5-billion Federal Strategic National Stockpile of drugs and medical supplies to assist States in protecting communities against the potentially deadly effects of chemical agents that attack the human nervous system (i.e., nerve agents).
  • Variation in the Clinical Laboratory Fee Schedule (OIG 2009) The Deficit Reduction Act of 1984 mandated that fee schedules be established for each lab test on a regional, statewide, or carrier basis. As a result, each carrier established its own fee schedule rates (hereinafter referred to as carrier rates), which are collectively known as the Clinical Laboratory Fee Schedule. The Consolidated Omnibus Budget Reconciliation Act of 1985 mandated a national limit amount (NLA) that capped carrier rates. The NLA is set at 74 percent of the median carrier rate for each lab test (or 100 percent of the median for new tests for which an NLA was not established before January 1, 2001). Carriers pay laboratories the lower of the laboratories’ charges or the carrier rate as capped by the NLA.
  • Potential Improper Medicaid Payments for Outpatient Clinical Diagnostic Laboratory Services for Dual-Eligible Beneficiaries (OIG 2009) Dual eligibles are beneficiaries who are enrolled in Medicare Part A and/or Part B and also entitled to some Medicaid benefits. State Medicaid programs should not pay for any portion of outpatient clinical diagnostic laboratory services that were provided on an assignment-related basis to dual eligibles who are enrolled in Medicare Part B.
  • Public Health Laboratory Testing To Detect and Report Biological Agents (OIG 2008) To assess the extent to which State public health laboratories have made progress toward the Centers for Disease Control and Prevention’s (CDC) requirements intended to decrease the time needed to detect and report biological public health threats.
  • Biosafety Laboratories: Perimeter Security Assessment of the Nation’s Five BSL-4 Laboratories (GAO 2008) Currently, all operational biosafety level (BSL) 4 labs are registered with the CDC and thus are regulated by the CDC, not USDA. BSL-4 labs handle the world’s most dangerous agents and diseases. In fact, of the four BSL designations, only BSL-4 labs can work with agents for which no cure or treatment exists. GAO was asked to perform a systematic security assessment of key perimeter security controls at the nation’s five operational BSL-4 labs.
  • An Overview of State Reporting Programs and Individual Hospital Initiatives to Reduce Certain Infections (GAO 2008) Normally treated with antimicrobial drugs, HAIs are a growing concern as exposure to multidrug-resistant organisms (MDRO) becomes more common. Infections caused by MDROs, such as methicillin-resistant Staphylococcus aureus (MRSA), lead to longer hospital stays, higher treatment costs, and higher mortality. In response to demands for more public information on HAIs, some states began to establish HAI public reporting systems.
  • Leadership Needed from HHS to Prioritize Prevention Practices and Improve Data on Hospital Infections (GAO 2008) According to the Centers for Disease Control and Prevention (CDC), health-care-associated infections (HAI) are estimated to be 1 of the top 10 causes of death in the United States. HAIs are infections that patients acquire while receiving treatment for other conditions.
  • State and Local Bioterrorism Preparedness (OIG 2002) The Centers for Disease Control and Prevention (CDC) has funded State bioterrorism preparedness efforts through cooperative agreements since 1999. More recently, it has worked with State and local health departments to develop performance guidance, called the Core Capacity Project, for bioterrorism preparedness.
  • CDC’s Oversight of the Select Agent Program (GAO 2002) As the agency responsible for identifying and controlling biological agents that have the potential to pose a severe threat to public health and safety, CDC can improve its management of the Select Agent Program to reduce the likelihood of unauthorized access to biological agents.
  • Common Working File Edits for Unauthorized Laboratory Tests (OIG 2002) This report focuses on how well the Common Working File (CWF) edits work when processing claims from laboratories holding a CLIA Certificate of Waiver or Certificate for Provider Performed Microscopy Procedures. The CWF scrutinizes claims to ensure that the laboratory services billed are authorized under a provider’s CLIA certificate. We did not analyze claims submitted by laboratories certified by CLIA to do moderate or high complexity laboratory testing.
  • Enrollment and Certification Processes in the Clinical Laboratory Improvement Amendments Program (OIG 2001) State surveyors and CMS studies indicate that there may be widespread problems at waived and provider-performed microscopy laboratories. Colorado and Ohio surveyors found that about half of waived and provider-performed microscopy laboratories were not following manufacturers’ instructions, did not have manufacturers’ instructions onsite, or were conducting tests they were not authorized to perform.
  • CLIA Regulation of Unestablished Laboratory Tests (OIG 2001) The CMS has become aware that an increasing number of laboratory sites are offering patients Live Blood Cell Analysis and other unestablished laboratory tests. For the purposes of this inspection we have defined unestablished laboratory tests as those laboratory test methods that are not generally accepted by many of the people involved in traditional laboratory practice and oversight.
  • Medicare Payments for Clinical Laboratory Services (OIG 2000) One of the largest civil settlements ever to resolve disputes about incorrect Medicare payments was made with one of the nation’s clinical laboratory companies. The settlement, amounting to $325 million, was not an isolated case. In fact, a series of settlements along the same lines with other laboratories, including some of the nation’s largest, resulted in almost a billion dollars in recoveries, fines, and penalties in recent years. These settlements involved complaints of billings for services not performed, unbundling tests, false diagnosis codes, kickbacks to physicians for patient referrals, double-billings, and billings for unordered tests and tests not medically necessary.
  • Mammography Quality Standards Act: X-ray Quality Improved, Access Unaffected, but Impact on Health Outcomes Unknown (GAO 1998) GAO discussed the findings of its work over the last several years examining the impact of the Mammography Quality Standards Act (MQSA), focusing on: (1) the quality of mammography services; (2) early detection of breast cancer; and (3) women’s access to mammography services.
  • Independent Physiological Laboratories: Vulnerabilities Confronting Medicare (OIG 1998) The Health Care Financing Administration (HCFA) defines an independent physiological laboratory (IPL) as an entity operating independent of a hospital, physician’s office or rural health clinic. Testing modalities performed by IPLs include, but are not limited to, neurological and neuromuscular tests, echocardiograms, ultrasounds, x-rays, pulmonary function tests, cardiac monitoring and nuclear medicine testing.
  • Independent Physiological Laboratories: Carrier Perspectives (OIG 1998) Medicare carriers are concerned about the vulnerabilities associated with IPLs. They are particularly concerned about IPLs generating fictitious claims and billing for services not rendered. Carriers also report having found falsified physician orders, misrepresented patient diagnosis, double billing, unbundling, carrier shopping, overutilization and non-existent IPL businesses.
  • FDA’s Mammography Inspections: While Some Problems Need Attention, Facility Compliance Is Growing (GAO 1997) Pursuant to a legislative requirement, GAO reviewed the Food and Drug Administration’s (FDA) program for implementing the requirements of the Mammography Quality Standards Act of 1992.
  • Telemedicine: Federal Strategy Is Needed to Guide Investments (GAO 1997) Pursuant to a congressional request, GAO reviewed the steps that the federal government needs to take to realize the full potential of telemedicine and achieve cooperation with the private sector.
  • Mammography Services: Initial Impact of New Federal Law Has Been Positive (GAO 1996). Pursuant to a legislative requirement, GAO examined whether the Food and Drug Administration’s (FDA) implementation of the Mammography Quality Standards Act has had any effect on the: (1) quality of mammography services; and (2) access to such services.
  • FDA Laboratories: Magnitude of Benefits Associated With Consolidation Is Questionable (GAO 1996) Pursuant to a congressional request, GAO reviewed the Food and Drug Administration’s (FDA) plan to consolidate its Office of Regulatory Affairs’ (ORA) 18 field laboratories for product testing.
  • Information Security: Computer Hacker Information Available on the Internet (GAO 1996) GAO discussed the importance of computer security and hacker information available on the Internet.
  • CLIA’s Impact on the Availability of Laboratory Services (OIG 1995) Since passage of CLIA in 1988, the volume, number of tests per patient and expenditures have increased rapidly. In 1988, the year in which CLIA was passed, Medicare paid for 232 million laboratory test; today, Medicare pays for more than 403 million tests annually. The number of laboratory tests provided to Medicare Part B enrollees has more than doubled from five tests per enrollee in 1985 to an estimated 12 tests per enrollee in 1993.
    The CLIA appears not to have affected physician ability to secure laboratory services for their patients.

  • Lessons from Inspections of Mammography Facilities (OIG 1994) In October 1992, Congress passed the Mammqpphy Quality standards Act (MQSA)” Whereas Medicare’s regulations only cover those facilities receiving Medicare reimbursement and only for screening mammography, MQSA mandates that all facilities providing mammography services, whether screening or diagnostic, meet minimum quality standards, or run the risk of fines and sanctions including the closure of the facility.
  • Referrals to Physician-Owned Imaging Facilities Warrant HCFA’s Scrutiny (GAO 1994) GAO compared physicians’ referral rates for diagnostic imaging services, focusing on: (1) referrals by physicians with a financial interest in joint-venture imaging service facilities; and (2) whether the Department of Health and Human Services’ (HHS) procedures and policies are effective in monitoring and identifying abusive self-referral practices.
  • Impact of a Laboratory Roll-In on Medicare Expenditures (OIG 1991) Our recent study entitled Ensuring Appropriate Use of Laboratory Servces: A
    Monograph” proposed that Medicare roll reimbursement for laboratory servces into the recognized charge for physician office visits. This bundling approach, called a laboratory roll in (LRI), appears to be a promising option which would contain rising laboratory costs. The report also suggests that a LRI, like Diagnosis Related Groups, can produce significant savigs without compromising the quality of patient care.

  • Quality Assurance in Independent Physiological Laboratories (OIG 1990) The purpose of this inspection was to assess quality assurance in Independent Physiological Laboratories (ILs) by examining thee aspects of the industry: regulation, personnel qualifications, and equipment standards.
  • Ensuring Appropriate Use of Laboratory Services: A Monograph (OIG 1990) Until recently, most Medicare legislation involving clinical laboratory services has focused on controllng the amount the program pays for services. Passage of the Omnibus Reconcilation Act of 1989 has focused attention on controlling utization. It is in the context of this change in focus that this inspection examines the forces that encourage utilization of laboratory services and considers varous solutions to control laboratory test use.
  • Basic Elements of an Infection Control Program (GAO 1990) A list of 56 elements that experts consider necessary for an effective hospital-based infection control program.
  • Independent Clinical Labs (OIG 1989) The purpose of this inspection was to determine (1) whether Federal and State monitoring of Medicare-certified independent laboratories through proficiency testing (PT), personnel standards and on-site inspections adequately identifies marginal or substandard performance and (2) whether appropriate and timely corrective and disciplinary actions are taken to address deficiencies.
  • Quality Assurance in Physician Office Labs (OIG 1989) Following the Inspector General’ s congressional testimony regarding POLs and the release of our draft report in June 1988 , Congress passed and the President signed into law CLIA of 1988 (P.L. 100-578). These amendments incorporate our draft recommendations by mandating: that all laboratories be regulated based on complexity of testing; that all POLs register and meet certain standards and inspections as appropriate; and requirements as that a registration fee be imposed on all laboratories which will provide funding for the laboratory registration and inspection pregram and will save the Department millions of dollars in operating costs.
  • Medicare Reimbursement for Outpatient Laboratory Services (OIG 1989) This inspection assesses the effects on Medicare program costs of adopting a national fee schedule for the payment of outpatient lab services for Medicare beneficiaries.


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