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
|click to enlarge|
Earlier this week I did a report on the new OIG analysis of 2019 Medicare lab test spending - here.
OIG noted that highest-spending MoPath code in 2019 was 81408 - the Tier Two, Level 9 code which can represent any of about a dozen rarely sequenced genes.
MAC contractors like Novitas state, they have no edits on Tier 2 codes, while other MACs (including NGS MAC and MolDx MACs) pay Tier 2 codes rarely or never, especially not paying codes 81407 or 81408 (see blogs #3 and #4).
OIG Highlighted 81408; Let's Look at All Tier 2 Codes
Looking at national data, and ignoring particularly MACs, OIG emphasized that 81408 was the heaviest-paid of all genomic codes at $289M. OIG didn't mention, but I've reported, this code came out of nowhere (volume up 580X in just 3 years, 2016-2019'; see table in Blog #1).
Rather than viewing 81408 by itself, let's view national payments for the whole set of AMA Tier 2 codes 81400-81408. Payment for this group doubled between 2018 and 2019, from $190M to $390M. Tier 2 codes 81406, 81407, 81408 all grew between 2X and 3X in just one year.
- This article focuses on national payments for Tier 2 codes. For the mind-blowing story of how MolDx edits for Tier 2 codes differ from other MACs, see my sister article Blog #3 here.
I looked at the dollar volume and services volume for Tier 2 codes comparing 2018 and 2019. See the next table.
Lower Tier 2 Codes Shrank 2018-2019. Interestingly, the services volume and dollar volume of the lower Tier 2 codes shrank between 2018 and 2019.
For example, for 81400, there were 35,356 services in 2018 and 21,812 services in 2019. Dollar volume shrank by ($872,755). In fact, all the Tier 2 codes in the lower range 81400-81403 shrank coming in 2019.
Higher Tier 2 Codes Boomed 2018-2019. At the same time the lower-level Tier 2 codes were shrinking, the higher-level and far more expensive Tier 2 codes grew A LOT from 2018 to 2019, rising from 62,280 uses to 146,014 uses, and dollars allowed for 81408 rising from $123M to $289M. See table, click to enlarge. The next tables contain multiples, the ratio of 2019 vs 2018 spending. The lower Tier 2 codes have red multiples less than 1, and the top three Tier 2 codes double to triple.
MUE Edits for Tier 2 Codes
While some MACs do not have edits on these Tier 2 codes and others do, there are National Medically Unlikely Edits which cap the volume of services per day per code per patient. These range from 1 (81402, 81407) to 5 (81404). For cryptic reasons, the third-highest Tier 2 code (81406) has an MUE of 2, 81407 has an MUE of 1, and 81408 has an MUE of 2 again.
|81408 Pmts Visibly Lower in 2019 than 2018|
Let's take a pause there. For more on how MolDx edits Tier 2 codes, see the sister article here.
Grand Finale: MACs Mightily Impact Tier 2 Payments
Here I conclude my analysis of national use of all Tier 2 codes by making summary graphs. I broke out the MACs into three cohorts.
- In purple, the Novitas and FCSO MACs.
- In Orange, the small and now-gone Cahaba MAC (TN, GA, AL).
- In blue, all the remaining MACs (MolDx [Palmetto, WPS, Noridian, CGS], NGS MAC).
Breathtaking. From a payments viewpoint, we see two facts, unknown before now.
- Fact #1: Nearly all spending for all Tier 2 codes flowed out via the Novitas and Cahaba MACs (purple + orange). Only a sliver of payments went out through other MACs, and only for the lower Tier 2 codes.
- Fact #2: Total payments for all Tier 2 codes is massively skewed to 81408, the highest codes, often billed $4000 per patient (2 x 81408).
In 2018+2019, Tier 2 spending (as above) was about $600M.
If you look at services rather than payments, the bar graph is more balanced, but it's comparing test numbers rather than prices (some tests are $60, some $2000).
The next two blogs, #3 and #4, will look at edits and payment patterns in MolDx MACs and then in NGS MACs. The final blog, #5, will ask why 81407 (see bar chart just above) is so tiny compared to 81406 and 81408.
For lab-level detail on how different labs billing Tier 2 codes show different billing patterns, see my side blog here.