Management & Compliance for Large/Academic Pathology Practices
Part 2 -
Compliance with Legal and Ethical Standards
Black-Schaffer & Johnson
MGH PATHOLOGY SERVICE
Compliance with Legal and Ethical Standards
The MGH Pathology Service is committed to ensuring that all professional staff members and employees
(1) are aware of and comply with the letter and spirit of all applicable laws and regulations, (2) avoid
conflicts of interest and (3) conduct hospital business with the highest degree of integrity and honesty.
This plan describes the MGH Pathology Service program to ensure compliance with all laws, regulations
and policies and outlines the mechanism used to monitor compliance. The MGH Pathology Service will
undertake the following with the assistance and guidance of the Hospital Compliance Director and the
Office of the General Counsel.
This policy applies to all employees of the MGH Pathology Service and consultants retained in its
service. This policy encompasses all relevant areas of law, regulation and business practice, including
but not limited to: antitrust, conflict of interest, clinical practice discrimination, environmental
protection, financial practices, gifts, mandated reporting, Medicare and Medicaid referral and billing
practices, Occupational Health and Safety, Health Information Protection and Privacy, pharmaceutical
practices, taxation, grant administration and scientific integrity.
The MGH Pathology Service will:
- Establish compliance oversight as an integral function of the Pathology Executive
Committee (PEC). This committee meets monthly, chaired by the Chief of the Pathology Service. It
includes the Associate Chiefs of Anatomic Pathology, Laboratory Medicine, Molecular Pathology and
Research, Training and Education, and Clinical Operations. It also includes the Director for Finance and
Administration who is designated as the Department's Compliance Officer. The PEC will:
- Communicate its commitment to compliance to all
- Monitor department compliance and report to the
Compliance Oversight Committee
- Establish and review enforcement of appropriate
compliance standards, policies and procedures
- Designate the Departmental Compliance Officer to work with
individual laboratories to ensure compliance by all employees. The Director of each laboratory or
service area in the MGH Pathology Service is responsible for the implementation of all compliance
procedures within their operation. The Compliance Officer, or his or her designee, will:
- Establish a departmental Billing Compliance
committee to monitor professional and technical billing activity for appropriateness, timeliness and
- Compile and maintain all statutory and regulatory
requirements, industry standards and internal policies applicable to the MGH Pathology Service
- Work with Laboratory Director to develop compliance
procedures for their respective areas
- Develop a system to communicate statutory and
regulatory requirements to the Laboratory Director
- Encourage and enable all employees to report any
possible noncompliant activities to the Department or Hospital compliance Director without fear of
- Evaluate and investigate all reports of
noncompliance using appropriate institutional resources. When required, refer matters to the PEC, Office
of General Counsel or Hospital Oversight Committee
- Take remedial steps to correct and prevent
recurrence of instances of noncompliance, recommend appropriate disciplinary action to the PEC,
Laboratory Director or other appropriate body.
- Monitor the effectiveness of the Department's
compliance program, implement changes when necessary and report on compliance activities to the PEC on an
- Develop and implement additional policies and
procedures to ensure continued compliance with applicable laws, regulations, standards and policies.
- Establish an education program to inform all
current staff members and train new employees at orientation concerning Departmental compliance policies,
procedures, their obligation to report any questions concerning compliance, and all departmental and
organizational reporting mechanisms.
- Develop a communication system to periodically
advise staff of new statutory, regulatory or institutional requirements
The MGH Pathology Service will:
- Communicate its commitment of compliance to all its employees as
part of annual competency training.
- Work in conjunction with the MGH Compliance Office to develop a
communication system to periodically advise the Hospital community and its external customers of current
compliance requirements. This will include:
- Definition of the Medicare medical necessity policy
as it relates to laboratory studies
- Components of test profiles
- CPT or HCPCS codes used to bill each profile
- Medicare payment for each profile and component
- Hospital billing practices for profiles
- Health Information Privacy Protection
- Develop a communication system to provide compliance and ethics
training for all MGH Pathology Service staff, particularly those involved in billing, marketing, specimen
collection test processing and reporting. This training will be scheduled annually and as determined by
changes in relevant laws or regulations. The training will: review the hospital and laboratory
compliance policies, reinforce the expectation of compliance with all regulatory standards as a condition
of employment, describe the hospital communication system for the internal reporting of compliance
questions and acceptable standards of conduct.
3. Monitoring and Auditing
The MGH Pathology Service will:
- Audit existing laboratory operations to ensure compliance with the
laboratory policies and procedures related to billing, sales, marketing, notices to physicians,
requisitions and the ordering of laboratory tests.
- Review the laboratory plan and all applicable Federal and State
laws to ensure compliance with standards for contracts, marketing, billing, sales and record keeping.
- Analyze test utilization data annually to monitor test-ordering
patterns and investigate any significant volume increases to ensure compliance with all established
- Report findings to the hospital Compliance Oversight Committee
4. Procedures and Policies
The MGH Pathology Service will
- Develop specific written procedures and policies including:
- Standards of conduct which address laboratory
policies regarding fraud and abuse, as well as disciplinary actions that may be undertaken for employees
failing to comply with these policies.
- Methods for investigating, documenting, correcting
and reporting all systems, operations and personnel compliance failures.
- Billing policies that ensure the accurate and
correct coding of all services
- Policies for ordering laboratory tests that address
the use of only medically necessary tests and the use of standing orders in the course of extended
- The MGH Pathology Service will review all fraud alerts and
communications from the HHS OIG and its Fiscal Intermediary and consult with the Hospital Compliance
Director and the Office of General Counsel. The MGH Pathology Service will evaluate any practices
outlined in a fraud alert. This may include monitoring any portion of the operation identified in the
- The MGH Pathology Service will develop clear and accurate
descriptions of its services, which include information on the impact of ordering practices for all
payers including Medicare.
- The MGH Pathology Service will maintain fair and consistent billing
practices for all payers, in accordance with pricing policies and models established by the Hospital
Finance Department. Specifically, charges for all panels will reflect the total cost of all tests
included in that panel.
- The MGH Pathology Service will establish or maintain records as
required by all Federal or State laws, and hospital policy.
- The job descriptions and annual evaluations for all managers
will include performance criteria related to the promotion of and adherence to all elements of the
Hospital and Department compliance plans.
All reports of violations of the hospital or laboratory legal and ethical standards will be promptly
investigated. This investigation may include interviews with appropriate personnel, review of relevant
documents, and laboratory reports. If it is determined that violations have occurred, the hospital
administration will take the necessary actions to rectify the event(s), secure the relevant evidence,
report the events to all necessary internal and external agencies, and institute appropriate corrective
for all individuals involved in the misconduct.
The MGH Pathology Service will initiate appropriate corrective and/or disciplinary action against any
employee who fails to comply with the Hospital or Laboratory compliance policies, federal or State laws,
or acts to compromise the integrity of the organization. This will be conducted with the Hospital
Department of Human Resources and will be consistent with hospital policies and procedures.
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