Skip to main content
Premium Trial:

Request an Annual Quote

HHS OIG Report Finds Drug Testing Overpayments Cost CMS $216M

NEW YORK – A new report from the US Department of Health and Human Services' Office of Inspector General found that the Centers for Medicare and Medicaid Services could have saved up to $215.8 million in overpayments for drug testing. 

The OIG report, released on Monday, analyzed $3 billion in Medicare Part B payments for definitive drug testing services from January 2016 to December 2020, looking specifically at procedure code G0483. The code covers definitive drug testing for 22 or more drug classes and is the definitive drug testing code with the highest reimbursement amount, as Medicare payments increase with the number of drugs tested. Medicare Part B covers medically necessary services and preventive services, including durable medical equipment, ambulance services, limited outpatient prescription drugs, and clinical laboratory services.

As part of its oversight activities, CMS identified overpayments for G0483 due to noncompliance with Medicare requirements, such as insufficient documentation to support medical necessity. The overpayment rate for the code ranged between 43 percent and 72 percent for fiscal years 2018 to 2020, the report noted. 

In 2021, OIG also found that payments for G0483 were at risk for overpayments because Medicare contractors did not have clear or consistent requirements for determining the number of drug classes to bill for definitive drug testing services. The goal of the new audit, OIG said in a statement, was to identify those payments that were at risk for noncompliance with Medicare requirements.

According to the report, OIG looked at payments to 1,062 at-risk providers — defined as those who routinely billed the G0483 code for at least 75 percent of their definitive drug testing services and received at least $5,000 for those services during the audit period, and so were at risk of being in noncompliance — as well as 4,227 other providers who didn't routinely bill the code. Definitive drug testing identifies specific medications, illicit substances, and metabolites, as well as concentrations of the drugs within a drug class.

For the audit period, Medicare paid $704.2 million for drug testing services that were at risk for noncompliance, OIG said. Presumptive drug testing, which indicates the presence or absence of drugs or drug classes in a sample, preceded most definitive drug testing services billed by both groups of providers. The at-risk providers, however, may not have always used presumptive testing to determine the number of drug classes that needed to be tested since they routinely billed for G0483, which could have led to unnecessary billing at the higher reimbursement code.

OIG noted that despite the higher percentage of G0483 billing conducted by at-risk providers, both groups had similar characteristics, such as the types of patients being tested and the frequency of testing. This "suggests that at-risk providers may have been able to bill primarily definitive drug testing services with lower reimbursement amounts, as the other providers did." 

According to the report, of the 3.4 million definitive drug testing services billed by at-risk providers, 90 percent were billed using code G0483. Of the 13.7 million services billed by other providers, only 21 percent were billed using G0483. 

If Medicare's program safeguards focused on at-risk payments to at-risk providers for G0483, the agency could have saved up to $215.8 million over the audit period, OIG reported. Some of those safeguards include coverage determinations for specific items and services, claims processing edits, oversight activities, and targeted provider-specific reviews. 

In its report, OIG made multiple recommendations to CMS, namely expanding the program safeguards to prevent and detect at-risk payments to at-risk providers for G0483 and reviewing payments made to those providers to recover any overpayments. It also recommended that CMS notify appropriate providers to exercise reasonable diligence to identify, report, and return any overpayments. Finally, OIG recommended the agency educate providers who received payments that weren't compliant with Medicare requirements. 

CMS concurred with the first recommendation, saying that it will assess whether additional safeguards would be feasible with available resources, but didn't concur with the second or third recommendations. The agency said that the OIG analysis alone doesn't provide findings of improper payments because it did not include medical review, adding that conducting medical review for all at-risk providers wouldn't be a "sufficiently targeted use of resources." CMS will send a billing report to the at-risk providers identified to let them know their billing is an outlier and will review the list of at-risk providers against providers CMS has already taken action on, the report said. 

CMS added that its contractors recovered $10.8 million for G0483 through post-payment medical reviews.

Despite CMS's disagreement, OIG said it stands by the second and third recommendations and that medical review isn't required to identify payments at risk of being improper. 

CMS didn't share whether it concurred with the fourth recommendation but said that it has issued national provider education on the rules for urine drug testing and will continue to educate providers as appropriate, the report said.