May 27, 2020

May 26, 2020

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Maryland Legislature Passes Bill Allowing Direct Advertising of Certain Laboratory Tests

The Maryland General Assembly recently passed bill that permits any person to directly or indirectly advertise diagnostic laboratory tests in the state, with certain limitations.  The bill currently awaits the Governor’s signature and will go into effect on October 1, 2019. 

Maryland law currently prohibits any marketing of laboratory tests to consumers, as well as any direct-to-consumer (“DTC”) testing without a physician’s order.  These prohibitions have caused some confusion amidst the proliferation of DTC genetic and ancestry test offerings in recent years. The confusion became particularly evident at a Fall 2017 Baltimore Ravens game at which a startup company offered a giveaway in which fans could get free DNA tests on four genes related to health and fitness with just a quick cheek swab.  However, the company had to call off the event because of concerns related to Maryland’s prohibitions on consumer advertising and DTC testing.

The bill amends Section 17-215 of Maryland’s General Health Laws, which prohibits anyone from advertising laboratory testing in the state except to physicians, hospitals, and other health care facilities.  The original version of the bill introduced in the House on February 4, 2019, provided a simple, one-sentence exception that would allow advertising to any person (including a consumer) of any laboratory test ordered by a physician and performed by a CLIA-certified laboratory.  The House later amended the bill to add some limitations that are included in the final version:

  • Germline or genomic testing that diagnoses or predicts diseases, such as testing for the BRCA mutation, are explicitly carved out and therefore cannot be the subject of advertisements; only diagnostic laboratory tests performed for the purpose of screening, diagnosing, managing, or treating a condition or disease, and ancestry testing related to parental lineage and ethnicity can be marketed.

  • Claims about the test’s reliability or validity must be consistent with the test’s performance as measured by CLIA.

  • The advertisement must disclose that the test may or may not be covered by health insurance. 

  • Only a covered entity or business associate of a covered entity under HIPAA can advertise laboratory testing.  

The law does not change Maryland’s current prohibition on DTC testing, which a 2016 bill tried and failed to do. 

Assuming that the Governor signs the bill (which he is expected to do), any company that decides to take advantage of the new opportunity that it presents should be aware that the Maryland Department of Health and Human Hygiene can restrict advertising if there is a public health threat or if a particular test does not comply with the law. 

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About this Author

Sarah Beth S. Kuyers, Mintz Levin, nonprofit affiliation lawyer, health care systems attorney

Sarah Beth’s practice involves a variety of regulatory, transactional, and enforcement defense matters for clinical laboratories, hospitals, pharmacies, insurers, and other health care clients.

Sarah Beth routinely advises clients on a wide variety of federal and state health care regulatory issues, including anti-kickback and self-referral laws, licensure and scope of practice rules, telemedicine, certificate of need applications, food and drug law, and HIPAA compliance. She also handles licensure and regulatory filings for clinical laboratories and other health care providers....

Karen Lovitch Mintz DC Health Care Compliance, Fraud & Abuse, and Regulatory Counseling Medicare, Medicaid & Commercial Coverage & Reimbursement Health Care Transactions Health Care Transactional Due Diligence Health Care Enforcement & Investigations

Karen focuses her practice on representing health care companies in regulatory, transactional, and operational matters. She has a substantial health care regulatory background and advises clients on matters pertaining to the federal anti-kickback statute, the Stark law, state statutes prohibiting kickbacks and self-referrals, the Clinical Laboratory Improvement Amendments of 1988, and the federal Physician Payments Sunshine Act. Karen often applies her strategic insight on these matters to counsel companies on regulatory issues arising in connection with mergers and acquisitions and other transactions. She also defends companies in high-stakes state and federal investigations. Karen regularly speaks and writes on challenges facing laboratories, diagnostic companies, and other health care companies.

Karen is the Practice Leader of the firm’s Health Law Practice. She counsels health care clients on regulatory, transactional, and operational issues, including Medicare coverage and reimbursement, the development and implementation of health care compliance programs, and licensure and certification matters. In addition, Karen advises clients on the legal, practical, and fraud and abuse implications of business arrangements and sales and marketing practices. Her experience includes matters related to the anti-kickback statute, the Stark law, state statutes prohibiting kickbacks and self-referrals, and the federal Physician Payments Sunshine Act.

Karen applies her compliance and regulatory experience in transactional as well as litigation contexts. In addition to counseling health care entities on regulatory matters arising in connection with mergers and acquisitions, she has successfully defended clients subject to state and federal surveys, Medicare and Medicaid overpayment and reimbursement appeals, and state licensure proceedings. Karen also represents clients subject to state and federal investigations alleging violation of the anti-kickback statute, the federal False Claims Act, and other state and federal laws.

Karen also specializes in the representation of laboratories and diagnostics companies. She regularly counsels on compliance with CLIA and state laboratory licensure laws, federal and state limitations on billing for diagnostic services, and legal restrictions on sales and marketing activities. Karen has served as regulatory counsel in a number of mergers and acquisitions involving laboratories and diagnostics companies and has represented numerous laboratories and diagnostics companies in state and federal government investigations.