Clinical Laboratories

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. This led 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 complete support in their legal, regulatory, and business matters.

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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 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.

Day-to-Day Operations

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; and
• 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; and
• 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, and
• 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 on 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, and
• 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, and
• direct-to-consumer offerings.
• occupational drug screening 

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