|
R. Lewis Dark:
Turning Up the Heat in California
FOR THE PAST TWO DECADES, CALIFORNIA HAS BEEN A PACE SETTER in
healthcare and the clinical laboratory industry. Events in recent weeks
seem to indicate that California will continue to move ahead of other
regions in developments that influence the clinical laboratory industry.
First, there is the impending birth of a new laboratory company in
Southern California. A group of lab executives and professional investors
have signed agreements to buy two Southern California commercial laboratory
companies. Both sales are expected to close by the end of the
month. What makes these two acquisitions interesting is that the buyers
have the type of experience that makes it likely they will use these two
laboratory acquisitions as a platform to build a national business in specialty,
molecular, and esoteric testing.
The second development is the service of subpoenas to Laboratory
Corporation of America and Quest Diagnostics Incorporated by the
California Attorney General. The subpoenas request documents and
records involving Medicaid billing in the state for periods dating three to
ten years ago. Whatever the motive behind these subpoenas, it raises the
risk that healthcare regulators in California may establish some type of
new legal precedent that has negative consequences for the entire laboratory
industry. That's because state legislation and state court rulings in
California tend to encourage other states to follow the same legal theories.
Remember, it was in California that the first laboratory whistleblower
filed a qui tam suit against National Health Laboratories (NHL).
That whistleblower was C. Jack Dowden. When the U.S. Attorney
announced a settlement with NHL in December 1992, it included a $111
million fine and restitution, along with a guilty plea to two criminal
counts and prison time for then-NHL CEO Robert E. Draper. The outcome
of that legal action was the national enforcement effort which the
federal Department of Justice (DOJ) dubbed"Lab Scam." By the time
the worst was over in 1998, every major commercial laboratory company
had paid fines and restitution totalling more than $1 billion.
Seen from that background, the subpoenas issued by California's Attorney
General last month have the potential to trigger new legal theories about
Medicaid billing that may prove harmful to the entire lab industry.
New Lab Company to Buy
Westcliff, Health Line
Ex-Specialty Labs' CEO leads executive team in acquisition of two Southern California labs
CEO SUMMARY: In Southern California, no one's talking for the record, but everyone's talking about the impending acquisition of Westcliff Medical Laboratories and Health Line
Clinical Laboratories by a new laboratory company. The deals
are expected to close by the end of this month. The new laboratory
company is likely to be led by Douglas S. Harrington,
M.D., formerly CEO of Specialty Laboratories, Inc.
Lab MUEs Reconsidered,
CMS Changes Course
No clinical lab or anatomic pathology MUEs
will be implemented until mid to late 2007
CEO SUMMARY: It may be a rare moment of common sense.
Last month, Medicare officials stated their intent to exclude
clinical laboratory and anatomic pathology CPT codes from
the"Phase One" implementation of Medically Unbelievable
Edits (MUEs). It is a positive step, and comes in response to
educational efforts by a consortium which included 60 associations
and organizations from the laboratory community.
TECH UPDATE: Merck's HPV Vaccine Cleared
For Use by FDA Last Week
It's the beginning of a new cycle of change in cervical cancer screening and treatment
Compliance News: California Attorney General Subpoenas Quest & LabCorp
Seeking documents related to MediCal billing for time periods reaching back three to 10 years
More Labs Opt to Use
Middleware, Quality,
and Lab Automation
Affirmed by Executive War College Presentations
CEO SUMMARY: Many of the nation's more innovative laboratory organizations are paying closer attention to laboratory productivity and operational performance. To achieve improved operations, these labs are putting three tools to greater use. They are using targeted automation solutions and giving middleware a greater role in the effort to squeeze ever more productivity
from every aspect of lab operations. Lean and Six Sigma quality management
methods are also growing in popularity.
DARK INDEX: Good News for Regional Labs
Competing Against Nationals
Each of the two blood brothers has growing, successful,"gadfly labs" in its own backyard
INTELLIGENCE: Late & Latent
NEW LABORATORY
ON AETNA CONTRACT
MORE ON: CBL Path
| 
