Triggered by the December 22 release of the OIG report on lab spending for CY2019, I've written a set of 5 blogs.
- #1 - OIG report; Focus on 81408 as biggest genomic code
- #2 - Review of all Tier 2 payments (81400-81408)
- #3 - Review of MolDx Tier 2 payments
- #4 - Review of NGS MAC Tier 2 payments
- #5 - 81407 as the weirdest Tier 2 code
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Blog #1 here, Blog #2 here, Blog #3 here, Blog #4 here, Blog #5 here.
Earlier this month, OIG announced that hitherto nearly unknown Tier 2 code 81408 had become the largest genomic CPT code in the Medicare system, with nearly $290M of payments in CY2019. I've discussed aspects of this in several preceding blogs. I've also looked at the Tier 2 system (codes 81400-81408) as a whole which are extraordinarily skewed to billing via the Novitas system (e.g. of $400M in Tier 2 codes in 2019, only a couple percent of all Tier 2 codes were paid via the MolDx and NGS MAC systems together, which are the vast majority of US population and states). '
- Tier 2 payments in 2019, at $400M, were almost as much as paid for all genomic codes just a few years ago (2017).
In looking at Tier 2 codes, I noticed that the several labs that account for most Tier 2 code billing, tend to bill zero or very little of code Tier 2 Level 8, 81407 (here).
You can see this in a basic national chart of Medicare Tier 2 code payments in CY2018. Payments for 81406 were $22M, for 81408 $123M, but 81407 plummets to only $6M:
If there were #2,000 in-house $3 tests, that would garner $6,000, while the #1,000 81408 tests referred out would be payable at $2M. A lab could seemingly could bill $2,006,000 while meeting the 70/30 rule at SSA 1834(h)(5). This could lead to a sort of industry that outsources 81408 tests selectively. (By the way, it would require only 500 patients, to reach $2,006,000, with each of the 500 patients getting 4 of the $3 test and 2 units, the payable limit, of the 81408 $2000 test).
Most genetic codes require "220,310" which is "chemistry" or "immunology" status. A few require 900 "cytogenetics."