Glossary K – L

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Kickback – See Kickback Violation in this Glossary.

Kickback Violation – a violation of the Federal Anti-Kickback statute, which prohibits giving or receiving any kind of remuneration to promote goods or services. The Anti-Kickback Statute, 42 U.S.C. §1320 a-7b, makes it a criminal offense to knowingly and willfully to offer, pay, solicit, or receive any remuneration to induce the referral of business covered by a Federal funded health care program. In other words, the statute prohibits payments made purposefully to induce referrals of business payable by a Federal health care program. The statute ascribes liability to both sides of a kickback transaction and has been interpreted to cover any arrangement where one purpose of the remuneration was to obtain money for the referral of services or to induce further referrals.

Labeling – in the context of FDA-regulated pharmaceuticals and devices, labeling means all labels and other written, printed, or graphic matters upon any article or any of its containers or wrappers, or accompanying such article. This typically involves package inserts and marketing materials for prescription drugs and devices, and the package labeling itself for over- the-counter-drugs.

Laboratory – Under CLIA, a laboratory is defined as a facility that performs testing  on materials derived from the human body for the purpose of providing information for the diagnosis, prevention, or treatment of any disease  or impairment of, or assessment of the health of, human beings.This includes, independent laboratories, physician office laboratories, and hospital laboratories. Annually, CMS furnishes to carriers and FIs the proper amount to pay for each HCPCS code for each local geographic area. This includes a calculation of whether a national limitation amount or the local fee schedule amount is to be used. Also see Laboratory Fraud.

Local Coverage Determination (LCD) – a decision by a fiscal intermediary or a carrier under Medicare Part A or Part B, regarding whether and how to cover a particular service. An LCD may provide that a service is not reasonable and necessary for certain diagnoses and/or for certain diagnosis codes. An LCD does not include a determination of which procedure code, if any, is assigned to a service, or a determination with respect to the amount of payment to be made for the service.

Long Term Acute Hospital Fraud – See LTACH Fraud in this Glossary

Long Term Care Fraud – Patients of LTACH’s are typically admitted from general acute care hospitals. These patients have specialized needs and often complex, serious medical conditions such as respiratory failure, neuromuscular disorders, traumatic brain and spinal cord injuries, stroke, cardiac disorders, non-healing wounds, renal disorders and cancer. As such, they benefit from being treated in a specialty hospital that is designed to meet their unique medical needs, and generally require a longer length of stay than typical in a general acute care hospital. In order to remain categorized as a LTACH, a long-term acute care hospital must have an average inpatient length of stay for Medicare patients (including both Medicare covered and non-covered days) of greater than 25 days. (Previous to October 1, 2002, average lengths of stay were measured with respect to all patients regardless of payor). LTACHs that fail to exceed an average length of stay of greater than 25 days for Medicare patients during any cost reporting period are paid under the general acute care hospital DRG-based reimbursement. In addition, LTACH’s are paid extra for certain pass through costs, which include bad debts, direct medical education, and blood clotting factors. Fraud applicable in this setting included DRG upcoding, admission or discharge manipulation in order to increase reimbursement, and manipulation of the 5/6 Rule. Are the long term care hospital (LTCH) (which are paid under PPS) appropriately handling early discharges to home and interrupted stays? Does the LTCH admit patients from sole acute-care hospital?

LTACH Fraud – this often violated rule applies when a Medicare inpatient is discharged from a long-term care hospital (LTCH) to an acute care hospital, IRF (Inpatient Rehab Facility), SNF (Skilled Nursing Facility), or the patient’s home and then readmitted to the same long-term care hospital within 3 calendar days of the original discharge from the long-term care hospital. The 3-day or less period begins with the date of discharge from the long-term care hospital and ends not later than midnight of the third day. Medicare considers an “interrupted stay” to be part of the first LTCH admission (or a single discharge from the LTCH). Further, Medicare will only make a single LTCH PPS payment for an interrupted patient stay. This rule is designed to avoid provider attempts to gain payment for 2 admissions and discharges in a short period of time. Medicaid administers the Medicaid program through the state, and receives federal funds for the provision of healthcare to the states’ residents, and also for recovery of funds stolen through fraud and abuse.