Clinical laboratories play a substantial role in the modern health care system and are heavily and uniquely regulated.
As clinical laboratories rose to the forefront of medicine over the past few years, their billing and other practices came under greater scrutiny, leading to significant criminal and civil enforcement actions by federal agencies and state Attorney General offices, as well as whistleblower lawsuits and new approaches to regulating lab work.
As a health care “super boutique,” Epstein Becker Green has deep experience in the clinical laboratory field. We know the rules, regulations, and laws governing laboratories and deliver practical, cost-effective solutions that help clinical laboratory clients navigate today’s challenges and tomorrow’s opportunities. Our team includes not only attorneys at our firm who have handled lab-related matters and know how clinical laboratories work but also technical experts from our affiliated consultancy, EBG Advisors. We’re a “one-stop shop” for large and emerging laboratory clients, providing them with complete support in their legal, regulatory, and business matters.
Services to Meet Laboratories’ Needs
Working closely with clinical laboratory clients nationwide, Epstein Becker Green provides advice that spans all aspects of a laboratory’s life cycle. For example, we offer services in the following areas:
Licensure, Certification, and Accreditation
We regularly assist laboratory clients with obtaining and maintaining their certification and licensure status under the Clinical Laboratory Improvement Amendments (CLIA) and complicated state laboratory regulatory systems, such as those in place in California and New York. Where laboratory personnel certification is mandated, we advise on those issues as well. We also help clients maintain laboratory accreditation status.
Laboratory clients look to us to counsel them on complex regulatory and legal issues impacting their day-to-day operations. We provide advice on, among other things:
- Compliance with CLIA
- The preparation of legally compliant laboratory standard operating procedures
- The development of document retention programs
- Compliance with the Health Insurance Portability and Accountability Act, as well as state and federal privacy and data breach laws
- Compliance with state medical licensure laws impacting pathology operations
- Employment and personnel matters
Billing and Revenue Cycle Management
We routinely counsel laboratories on the complex laws and rules governing how they bill third-party payors, health care providers and facilities, and patients for the services they provide. For example, we advise clients on:
- Compliance with state and federal anti-markup rules and policies
- When and how to bill for reference laboratory services
- Compliance with federal and state surprise billing and price transparency laws, such as the federal No Surprises Act
- Lab-specific test coding challenges and how to overcome them
- Mitigation of risk from state and federal consumer protection laws
Product and Service Development
We help both start-up and established laboratories address the complicated technical and billing issues associated with the development of laboratory services or tests. Clients come to us for advice on:
- How to navigate the boundary between laboratory-developed tests (LDTs) and U.S. Food and Drug Administration (FDA)-regulated in vitro diagnostic devices
- How to obtain local and national coverage determinations from the federal Medicare program for new laboratory services
- Strategies for advancing reimbursement from commercial payors
Fraud and Abuse Compliance
Our deep exposure to the clinical laboratory industry, combined with our thorough knowledge of federal and state anti-kickback, self-referral, and patient-brokering rules, allows us to give careful yet practical and specific guidance to laboratories on compliance with fraud and abuse laws that may impact their relationships with other laboratories, health care facilities, physician practices, and vendors. As industry attention to the Eliminating Kickbacks in Recovery Act of 2018 (also known as “EKRA”) increases, we frequently counsel laboratory clients on their relationship with contract marketers and employed sales team members.
Government Investigations and Enforcement
Our attorneys, who include several former federal prosecutors, have extensive experience navigating government investigations and enforcement actions. They have defended laboratories against both civil and criminal charges of fraud stemming from alleged violations of the federal False Claims Act, the federal Anti-Kickback Statute, the Stark Law, general fraud statutes, and laws prohibiting false advertising. Laboratory clients count on us to assist them with:
- Civil investigation demands
- Compliance with criminal and civil subpoenas
- Pre-indictment investigations
- Defense of charged criminal matters
- Self-disclosures to state and federal regulators
Commercial and Liability Litigation
We frequently defend laboratories in high-stakes commercial and laboratory negligence litigation that implicates technical operations and complex regulatory issues. For example, we handle payment disputes that challenge the integrity of laboratory billing and compliance policies and disease misdiagnosis and result in reporting discrepancy cases founded upon alleged breaches of state and federal law, such as CLIA.
Due Diligence and Corporate Transactions
Clients frequently turn to us for assistance with the purchase or sale of businesses that are clinical laboratories, have laboratory operations within them (such as hospitals or physician practice networks), or that do significant business with laboratories. We help our clients—both clinical laboratories and investors in the health care and life sciences sector—identify, understand, and mitigate the risks associated with such deals. We also assist companies with restructuring laboratory operations during mergers and acquisitions to promote efficiency and enhance profitability while complying with the complex laws governing the flow of work between facilities and referring providers.
Our Diverse Roster of Laboratory Clients
Our clients range from regional, specialty, and start-up laboratories to the largest, full-service clinical laboratories in the United States. Our laboratory clients provide all types of services, including:
- Routine clinical laboratory tests
- Molecular diagnostic and pathology testing
- Anatomic pathology and cytology services
- All forms of genetic testing
- Specialty diagnostic and therapeutic testing
- Direct-to-consumer offerings
- Occupational drug screening
- Designed and assisted with the operationalization of No Surprises Act compliance programs for multiple laboratories.
- Represented a specialty laboratory in responding to a civil investigatory demand issued by the U.S. Attorney’s Office involving numerous federal and state fraud and abuse investigations, and hundreds of millions of dollars in Medicare and Medicare payments. We helped the client develop and implement a comprehensive corporate compliance and training program, which contributed to a favorable settlement agreement for the client.
- Defended a genetic diagnostics laboratory in False Claims Act whistleblower litigation. We persuaded the district and appellate courts that there was a complete defense to the allegations based on the government’s knowledge.
- Defended a national laboratory in a state whistleblower case relating to its cytology operations.
- Represented a clinical laboratory in the development of processes and template agreements for the negotiation of various research arrangements, including sponsored clinical trials, investigator-initiated research, and research collaborations.
- Counseled a national reference laboratory on compliance with out-of-state licensure requirements for pathologists and reference laboratories in 50 states.
- Advised a molecular diagnostic laboratory client in the implementation of billing operations.
- Advised growing regional dermatology and urology practices on compliant structuring of central physician-owned laboratory operations.
- Provided health regulatory counsel to a molecular diagnostic laboratory with a proprietary next-generation sequencing platform enabling molecular profiling of cancer patients’ tumor tissue.
- Defended a laboratory in consumer-based class litigation over balance billing practices.
- Advised a laboratory on whether a test developed with an academic institution partner qualified as an LDT.
- Assisted a molecular diagnostic laboratory in developing and implementing a health care compliance program.
- Assisted a clinical diagnostic laboratory in connection with processes and arrangements for sponsorships and other financial relationships with nonprofit organizations.
- Advised a clinical diagnostic laboratory on FDA regulatory obligations associated with the use of devices for the at-home collection of laboratory specimens.
- Served as a contracted compliance officer for a clinical laboratory.
- Served as counsel to a regional laboratory company in connection with a sale to a strategic partner.
- Represented a precision cancer diagnostics laboratory on successful challenges to denials of Medicare reimbursement for an oncology diagnostic. We obtained reversals of unfavorable coverage determinations and successfully represented the laboratory in litigation challenging final adverse hearing decisions.
- Defended a national laboratory in an array of litigation matters, including claims arising from cytology and histology interpretations, prenatal genetic testing, result reporting and specimen management issues, blood coagulation studies, FDA-regulated tissue transplant testing, microbiology cultures, and phlebotomy and specimen collection injuries.
- Represented a clinical diagnostic laboratory in a complex federal fraud and abuse investigation involving hundreds of millions of dollars and covering multiple assays and years. The investigation was ultimately settled on terms favorable to our client, including the negotiation of a corporate integrity agreement.
- Member of the Firm
- Member of the Firm
- Member of the Firm