NEW YORK – The US Department of Health and Human Services (HHS) Office of Inspector General (OIG) released a report Tuesday highlighting Medicare Part B billing patterns among some clinical laboratories that could indicate "potential waste or fraud" during the COVID-19 pandemic.
In its analysis, the OIG identified 378 labs out of a total of 19,577 that billed Medicare Part B for add-on testing as part of their COVID-19 testing at what it called "questionably high levels."
Medicare coverage changes made in response to the pandemic expanded coverage for COVID-19 testing as well as for other respiratory ailments. These regulatory changes also opened a doorway for labs to gratuitously perform such tests, then bill Medicare for them. The OIG analysis was spurred by a preliminary investigation of 2020 Medicare Part B claims data that the office said "raised concerns that some labs may have billed for unnecessary diagnostic tests on their claims for COVID-19 tests to increase their Medicare reimbursements."
The OIG investigation looked at Medicare Part B claims for COVID-19 tests and add-on tests billed from February 2020 to December 2020 and, according to the report, aimed to identify labs "for which add-on tests constituted a high proportion of [their] total number of tests" and labs "for which add-on tests constituted a high proportion of [their] total payments." The investigation identified 276 labs that fit the former description, 263 that fit the latter, and 161 that fit both descriptions. It also identified eight labs that submitted at least 10 claims wherein two labs billed for the same tests for the same individual on the same day, which the report said may indicate "a fraud scheme involving the sharing of [Medicare] enrollee information."
Of the 276 labs with an unusually high proportion of their volume derived from add-on tests, add-on testing made up at least 38 percent of their COVID-19 plus add-on billing volume with add-on testing making up more than 90 percent of this volume for 24 of these labs. Of the 263 labs with an unusually high proportion of their payments coming from add-on tests, add-on testing made up at least 33 percent of their COVID-19 plus add-on payments, with 30 labs receiving more than 80 percent of their COVID-19 payments for add-on testing.
The most commonly ordered add-on tests among the outlier labs were individual respiratory virus tests (728,203 tests and $48.3 million in payments) and respiratory panels (78,672 tests and $18.6 million in payments). A smaller number of allergy tests (1,150 tests and $178,124 in payments) and genetic tests (182 tests and $36,123 in payments) were also ordered.
Overall, Medicare Part B paid the 378 outlier labs more than $67 million for add-on testing during the 11 months analyzed and paid these labs an average of $227 per COVID-19 test claim, compared to an average of $89 per COVID-19 test claim for all other labs.
OIG said that it has referred these labs to the Centers for Medicare & Medicaid Services for further review.