Report shows Medicare risked up to $888M in improper payments for molecular pathology test

Money Bag Grant Award Social

There was inadequate oversight of Medicare reimbursement for the highest-paid molecular pathology genetic test, creating the risk of up to $888.2 million in improper payments, according to a recent audit by the U.S. Department of Health and Human Services Office of Inspector General (OIG).

OIG analyzed Medicare Part B claims for more than 450,000 genetic tests billed under Current Procedural Terminology (CPT) code 81408 that had dates of service from 2018 through 2021.

Healthcare providers may bill under the code when testing for multiple genes associated with rare diseases.

The diseases generally manifest in childhood so the Medicare population, mainly age 65 or older, is less likely to require such testing. As a result, there is a risk of improper payments for this CPT code, OIG noted.

A prior analysis showed that from 2016 to 2019, code 81408 -- with a reimbursement of $2,000 -- was the genetic-testing procedure code with the second highest total Part B payments.

The Centers for Medicare and Medicaid Services (CMS) and Medicare Administrative Contractors are responsible for the oversight of Medicare payments.

During its new audit, OIG found that their oversight activities failed to ensure that all Medicare enrollees had established relationships with ordering providers. Furthermore, such activities failed to ensure that Medicare payments for a specific CPT code were related to diseases associated with genes that would generally be tested and billed under that code. Finally, the oversight activities failed to ensure adequate monitoring of the number of tests billed under the code.

As a result, to determine whether the payments complied with Medicare requirements, OIG recommended that CMS direct the appropriate Medicare contractors to review claims billed under CPT code 81408 for the audit period. Second, OIG recommended that CMS calculate the amount of improper payments for the claims that did not comply with Medicare requirements. Third, OIG said CMS should recover up to $888.2 million for claims that were at risk of improper payment.

CMS agreed with the first and third recommendations; it provided information on its plans to address the second recommendation.

Page 1 of 5
Next Page