In the past several weeks, both the OIG and MEDPAC have reported on Medicare molecular pathology spending in CY2018. See OIG here, MEDPAC here. In a nutshell, investigators for both organizations found that between CY2017 and CY2018, MoPath spending shot up from about $500M to $1B.
Before this 2017/2018 doubling, MoPath spending had been roughly level for several years, with that $500M dominated by a few large tests like BRCA, Exact Cologuard, Oncotype Dx.
In several recent past years, I've found that the MolDx program channels a large part of CMS Part B mopath spending, such as 80%. As we'll see in a moment, that's no longer the case at all.
Now that CY2019 state level data has been released (here), there's a shocking discovery that MoPath spending growth has skyrocketed in unusual states, in several cases by 500-700% in one year. This may be related to massive genetic test fraud reported by the Department Justice through their sting operation "Operation Double Helix" - here and here. CMS funds seem to be protected in states that use NGS MAC edits (CMS JK, J6) or alternately, in states that use MolDx edits.
Data in a Nutshell
I've put my Excel research file in the cloud here. Methods - Basically, I went through 50-plus Excel files state by state, pulled a sum of spending for 811xx 812xx 813xx 814xx 815xx, plus adding spending for 0037U (FMI F1) in Massachusetts. (Except for 0037U, I didn't assess PLA codes.) Please note I'm assuming CMS assignments between state jurisdiction codes and actual states were correct during several hours of manual work, and assuming that other manual data collation was correct. The data doesn't include hospital outreach labs.
Total MoPath 2019 Spending: $1,642,287,344
Up from circa $500M just 2 years ago. (FN1)
I'm just showing CY2019 Part B; CY 2019 Part A + outpatient Part B will be closer to $2B. (FN1)
Spending in MOLDX states: $569,720.113 (35% of total)
Spending, within MOLDX, in Noridian states: 90%
In recent prior years, MolDx was closer to 80% of total.
Spending in Non-MOLDX states: $1,072,567,231 (65% of total)
State-Level Data Shows Fantastic Growth Rates
Here's where it gets really interesting.
- Spending in Florida was $123M in 2019, but only $17.5M in 2018, a 7X growth rate in one year.
- Spending in DC was $43M in 2019, but only $7.5M in 2018, a 5.7X growth rate in one year.
- Spending in Oklahoma was $123M in 2019, but only $33M in 2018, a 3.7X growth rate in one year.
Some of this 500%, 700% growth in a matter of months almost certainly represent fraudulent payments under Operation Double Helix. CMS will release payments by individual providers and labs for CY2019 in about mid 2021 (here) and we'll know more about where the $500M landed by NPI number and street address.
Wisconsin spending seems high at first at $243M or 15% of USA total, but this includes about $120M for Exact Sciences Cologard. In Massachusetts, FMI garnered $79M under code 0037U.
Louisiana seemed a little high at $70M, but that's actually down 20% between 2018 and 2019.
How Florida Got 7X Payments and $123M in One Year
Not encouraging. 25% or $32M came from Tier 2 code 81408. 14% or $17M came from BRCA. Another 9% or $11M came from Tier 2 code 81407.
That's half the total or about $60M of $123M in just three CPT codes, two of them vague ones.
As I noted in the introduction, OIG reports $1B in Medicare genetic spending in CY2018, and I find $1.6B in CY2019.
BUT: My data doesn't include hospital testing, while OIG's does.
The comparable number in OIG terms for CY2019 may eventually be published as $1.8B or $1.9B, adding in (legitimate) hospital genetic payments.
Oveall, hospital lab spending at CMS is 29% of the annual CLFS spending. If that held true for MoPath spending, one would scale up 1.6B x 1.40 (=100/71) to get $2.2B in CY2019 mopath spending in both compartments, independent lab spending and hospital lab spending. However, I believe that the $1.6B in independent lab spending is inflating by hundreds of millions of dollars of fraudulent spending at fly by night labs (as DOJ admits), which isn't likely to be reflected in the hospital ledgers.
Source for 29%: I've extracted this in prior years by comparing CMS carrier Part B spending with spending summed up by OIG annually, the different being hospital lab spending. In this case, I've used the 29% from an October 9 report by the investment firm Nephron.