Numerous laboratories billed Medicare for questionably high numbers of add-on tests alongside COVID-19 tests in 2020, according to a report released Tuesday by the U.S. Department of Health and Human Services Office of Inspector General (OIG).
The additional tests significantly increased the payments laboratories received for claims that included COVID-19 tests.
“Such high levels of billing for add-on tests raise concern[s] about potential waste or fraud, suggesting a need for further scrutiny of billing by these labs,” OIG said in a statement.
The report did not name the laboratories.
The scope of its analysis extended to billings specific to Medicare Part B which, among other services, helps cover services from doctors and preventive services such as screenings, shots or vaccines, and yearly wellness visits.
OIG noted in the report that Medicare Part B spending on COVID-19 lab tests also increased steadily between spring 2020 -- when Medicare first started paying for such tests -- and the end of that year.
“Preliminary analysis of Medicare Part B claims data indicated that some diagnostic testing laboratories billed for other diagnostic tests -- such as individual respiratory tests (IRTs), respiratory pathogen panels (RPPs), genetic tests, and allergy tests -- along with COVID-19 tests,” OIG said, adding, “We refer to these four types of tests billed with COVID-19 tests as add-on tests.”
OIG, an independent unit in the U.S. Department of Justice, noted that it is not unusual for labs to bill for COVID-19 tests and other diagnostic tests on the same claim. However, certain billing patterns, including high volume of or high payments for add-on tests, raise concerns of potential waste or fraud, it said.
OIG conducted its analysis by identifying labs that billed for add-on tests at questionably high levels compared to other labs that billed for COVID-19 tests. It identified two types of outlier labs: those for which add-on tests constituted a high proportion of each lab's total number of tests, and those for which add-on tests constituted a high proportion of each lab's total payments for tests.
Specifically, it examined all Medicare Part B claims paid for COVID-19 tests and for the IRTs, RPPs, genetic tests, and allergy tests during 2020.
It found that 378 labs billed Medicare Part B for add-on tests at questionably high levels in volume, payment amount, or both, in a comparison with 19,199 other labs.
Among those identified, 276 labs billed for high volumes of add-on tests on claims for COVID-19 tests, and 263 labs billed for high payment amounts from add-on tests on claims for COVID-19 tests. Furthermore, 161 of these labs billed for both high volumes of add-ons and high payment amounts from add-ons on claims for COVID-19 tests. On their claims for COVID-19 tests, some of the 378 labs billed for add-on tests in combinations that had little if any variation across patients. This may indicate that these tests were not specific to individual patients' needs, OIG said.
The add-on tests significantly increased the per-claim amounts that Medicare Part B paid to these labs.
One outlier lab regularly billed for a combination of five add-on respiratory tests on almost all of its claims for COVID-19 tests. As a result, the average per-claim Medicare payment to this outlier lab was $666, covering both COVID-19 and add-on tests, compared to an average payment of $89 to all other labs that billed for COVID-19 tests and any add-on tests.
The following points are among the key takeaways of the report:
- Add-on tests increased Medicare Part B payments to outlier labs by amounts ranging from $66 to $237 per test on average.
- IRTs were the most common add-on tests billed on claims for COVID-19 tests. The average payment for one of those tests was $66. More than 300 outlier labs billed Medicare Part B for more than 700,000 of them as add-on tests in 2020, costing Medicare about $48 million in total payments.
- RPPs were the second most common type of add-on tests that outlier labs billed with COVID-19 tests in 2020. Such a panel can use a single sample to test for different bacteria or viruses that cause respiratory symptoms. The average payment for an RPP add-on test was $237, which is significantly more expensive per test on average than IRTs, OIG noted.
- Of the 378 outlier labs, 178 billed Medicare for at least one RPP add-on test on claims for COVID-19 tests, costing Medicare almost $19 million in 2020. Two labs accounted for 36% of payments for RPP add-on tests.
“Our analysis suggests that further scrutiny of billing by the 378 outlier labs is needed,” OIG said. It has referred the labs to the Centers for Medicare & Medicaid Services for further review.