Palmetto GBA gives the College of American Pathologists the LCD it wanted


Palmetto GBA, the Medicare Administrative Contractor (MAC) for Jurisdiction 11 (the Carolinas and Virginias), has just released a very extensive draft local coverage determination (LCD) policy that addresses the overutilization of immunohistochemical (IHC) and special stains by pathologists for breast, gastrointestinal, prostate, lung, gynecologic, genitourinary, skin, soft tissue, central and peripheral nervous systems, bone marrow and tumor chemosensitivity specimens.

It would appear the draft LCD is in direct response to the complaint filed with the Centers for Medicare and Medicaid Services (CMS) by the College of American Pathologists (CAP), which took exception to an educational document Palmetto posted on its website back in May that highlighted ancillary stain overutilization by pathologists on gastric biopsies.

In its complaint, the CAP stated the educational document should “be removed from the Palmetto website or significantly modified immediately”, and that if Palmetto wished to fight ancillary stain overutilization by pathologists, it should go through the LCD process.  Soon after the complaint was filed, Palmetto did indeed remove the article from its website.

In the article I wrote about the CAP’s complaint, I stated there was an excellent chance Palmetto would indeed go through the LCD process because of the complaint, and the CAP needed to be careful what it asked for, as an LCD could be far more painful for pathologists than a simple educational document.

Before anyone gets too upset, the reimbursement restrictions Palmetto is proposing will not impact the vast majority of pathologists who already order ancillary stains appropriately.  Rather, they will for the most part only impact those pathologists who are ordering ancillary stains inappropriately.

But, the LCD will have an impact on all pathologists in that they will be required to fully explain the medical necessity for each ancillary stain they order in their report if they want to be reimbursed for it.

And it also goes without saying that once the LCD is in place, Palmetto will be able to initiate probes and pre- and post-payment reviews, and refer troubling cases to Recovery Audit Contractors (RAC) and Zone Program Integrity Contractors (ZPIC).

Draft LCD Contents

The draft LCD begins by stating its purpose, which is to address medically unnecessary overutilization of ancillary stains by pathologists via:

  • Reflex templates or pre-orders for special stains and/or IHC stains prior to review of the routine hematoxylin and eosin (H&E) stain by the pathologist; or
  • Use of special stains and/or IHC stains without clinical evidence that the stain is actionable or provides the treating physician with information that changes patient management; or
  • Use of stains when the diagnosis is already known based on morphologic evaluation; or
  • Hematoxylin and eosin (H&E) staining is included in the billing CPT code and is not a separately billable service.

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Halloween costume tips for pathology types by Michael Farmer

I received an email earlier today from Mr. Michael Farmer, manager of McEvoy and Farmer, a market research firm that specializes in in-vitro diagnostics and anatomic pathology, about Halloween costumes. Mr. Farmer, whom I have never met in person, obviously has a well-exercised sense of humor, and he uses that sense of humor to write articles that are very light and easy to read yet contain insightful information on the current state of the pathology and lab medicine industry. As with … [Continue reading]

Laboratory whistleblower Chris Riedel sued by different laboratory whistleblowers

A US district judge in New Jersey recently denied a motion to dismiss filed by laboratory whistleblower Chris Riedel of Hunter Laboratories in a lawsuit brought against him by laboratory whistleblowers Fair Laboratory Practices Associates (FLPA) and NPT Associates (NPT). I only just now came across the suit, which was originally filed in April 2014, but it is still interesting nonetheless and far from being resolved. The Parties FLPA and NPT are separate general partnerships formed in … [Continue reading]

21st Century Oncology in OIG crosshairs for urine FISH self-referral

(Wall Street Journal)

John Carreyrou of the Wall Street Journal published yet another excellent article about pathology self-referral last week that focuses on 21st Century Oncology and its urine fluorescence in-situ hybridization (FISH) referrals. Basically, the article provides yet another example (as if any more were necessary at this point) of how physicians exploit the in-office ancillary services exception to the Stark Law for their own personal financial gain. 21st Century was founded in 1983, but did … [Continue reading]

Appeals court reverses $1.5 million organ incineration award

A Florida appeals court has reversed the final judgment of a lower court that awarded $1.5 million to the daughter of a woman whose organs were incinerated after autopsy. I first wrote about this case on September 10, 2012, right after the original verdict was announced, and then again nine days later after a local news report raised some interesting questions about the case. Background Ms. Sharren Sutka died on March 27, 2005* at Winter Haven Hospital in Winter Haven Florida.  Her … [Continue reading]

Cigna sues Health Diagnostic Laboratory for fee-forgiving fraud

Health insurance provider Cigna has filed suit against Health Diagnostic Laboratory (HDL), alleging HDL unlawfully obtained at least $84 million from it through a "fraudulent fee-forgiving scheme". Readers will recall HDL is one of the laboratories being investigated by the Office of the Inspector General (OIG) for the Department of Health and Human Services for possibly paying kickbacks to physicians in exchange for referrals. Not soon after that fact came to light, the HDL CEO, Tonya … [Continue reading]

Mayo Clinic sues Dr. Franklin Cockerill, Chief Laboratory Officer of Quest Diagnostics


A couple of weeks ago, I briefly mentioned how Dr. Franklin Cockerill, former chairman of the Mayo Clinic Department of Laboratory Medicine and Pathology (DLMP) and chief of Mayo Medical Laboratories (MML), started his new job as vice president and Chief Laboratory Officer of Quest Diagnostics on October 1, 2014.  On October 14, 2014, the Mayo Clinic filed a civil lawsuit against Dr. Cockerill that alleges, among other things, misappropriation of trade secrets. Facts/Allegations The … [Continue reading]

Bostwick Laboratories settles whistleblower suit for $6.05 million

Bostwick Laboratories (BL) has settled the federal qui tam (whistleblower) lawsuit filed by Michael Daugherty of LabMD that alleged False Claims Act violations for $6.048 million.  This settlement does not resolve allegations against Dr. David Bostwick, who is a separate defendant in the case. I first wrote about this case in January 2013, when Senior District Judge Arthur Spiegel denied BL's motion to dismiss, and again in May 2014 to simply provide a quick update on where the case … [Continue reading]

Interview with Dr. Vinay Kumar, editor of Robbins and Cotran Pathologic Basis of Disease

Cover Ninth Edition

Elsevier recently published the ninth edition of Robbins and Cotran Pathologic Basis of Disease.  An account executive with the public relations firm that represents Elsevier reached out and asked if I would be interested in asking Dr. Vinay Kumar, one of the editors of Robbins, a few questions about the book. I have fond memories of reading Robbins (twice, as I recall, with the exception of the eye chapter) during my second year of medical school, as well as referring to it on multiple … [Continue reading]

Quest Diagnostics, LabCorp accused of duplicative testing, billing in recently unsealed suit

A former phlebotomist for Quest Diagnostics filed a qui tam (whistleblower) suit on July 27, 2012, alleging her former employer and LabCorp knowingly submitted "false and fraudulent claims to the United States and the State of California...for the same tests, performed on the same day, on the same patient" since at least 2002.  The suit was unsealed on October 6th, 2014 after a US District judge denied the federal government's motion for a fifth extension of time to consider whether it would … [Continue reading]

Pathology Blawg News Roundup for October 10, 2014

FDA releases draft LDT regulation guidance documents On October 3rd, the Food and Drug Administration released two guidance documents concerning the regulation of laboratory-developed tests (LDTs). The first is entitled "Framework for Regulatory Oversight of Laboratory Developed Tests" and provides: ...guidance to clinical laboratories that manufacture LDTs about how FDA (the Agency) intends to enforce authorities that apply to such laboratories as medical device manufacturers. The second is … [Continue reading]

Owner of Bristol Laboratories indicted for healthcare fraud and kickbacks

Beth Palin, a non-practicing attorney and owner of Bristol Laboratories (BL) and Mountain Empire Medical Care (MEMC), has been indicted by a federal grand jury on charges of healthcare fraud, conspiracy to commit healthcare fraud and offering or paying a kickback.  Palin's husband, Joseph Webb, was indicted on the same charges, and otolaryngologist Dr. Mary Curtiss was indicted on charges of healthcare fraud, conspiracy to commit healthcare fraud and receiving a kickback. Allegations Dr. … [Continue reading]

UnitedHealthcare delays Lab Benefit Management Program; Forensic pathologist Dr. Norman Thiersch resigns

Dr. Norman Thiersch (Herald of Everett Washington)

BeaconLBS Back in July, I talked about UnitedHealthcare's (UHC) Laboratory Benefit Management Program (LBMP) that is to be administered by Beacon Laboratory Benefit Services, Inc. (BeaconLBS), a wholly-owned subsidiary of LabCorp. Readers can refer to my previous post for more specific information, but basically, the LBMP appears to be very cumbersome and will require physicians to notify BeaconLBS before ordering certain laboratory tests, including anatomic pathology. … [Continue reading]

Taking a little break

I have been absolutely knocked flat by a nasty little bug and need to take a few days to convalesce. I will resume posting as soon as I can. … [Continue reading]

Abington Memorial Hospital laboratory accused of Medicare, Medicaid fraud

AMH logo

A former employee of Abington Memorial Hospital (AMH) in Pennsylvania has filed a federal lawsuit that alleges the hospital laboratory committed Medicare and Medicaid fraud and that she was retaliated against and wrongfully terminated after she informed hospital administration of the lab's actions. Background/Allegations Ms. Joanne Cleighton was hired by AMH in February 1988 to work in the registration office.  Two years later she was promoted to supervisor and fourteen years after that she … [Continue reading]