This week, the Centers for Medicare & Medicaid Services (CMS) released billing data categorized by code and by laboratory (or physician) for the calendar year 2021 - here
We closely examined the billing data for code 81408, Tier 2, Level 9, as it was the primary code used by numerous laboratories indicted by the Department of Justice (DOJ). A substantial number of these labs have either pled guilty or been convicted, with a significant concentration of the activity in Texas and Florida. For a detailed instance of a guilty plea involving 81408 billing in 2023, refer to this link.
Additionally, we scrutinized the billing data for code 87798, given that a large proportion of the billing occurred in Molecular Diagnostic (MolDx) states. Notably, these states transitioned from a notably lenient claims processing approach in 2021 to a tightly controlled methodology in 2022, as documented here. We assessed potential Medicare savings under the new LCD, using 2021 data for MolDx states.
81408 / 2021
In 2021, the laboratory that achieved the greatest success in billing for code 81408 received a total of $188M from Medicare. This lab, located in Texas, billed almost exclusively with Tier 2 codes. Of this $188M sum, over half was paid under code 81408. Tier 2 codes were billed in multiples of two per patient, the only exception being 81407, which was billed in multiples of one.
The revenue this lab generated from 81408 in 2021 exceeded $100M, accounting for roughly a third of the national payments for this code in the same year, which totaled $280M. Interestingly, this lab exhibited a closely similar pattern of Medicare billing in the previous year, 2020, although the revenue generated then was significantly lower, at around $30M, 85% less.
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87798 / 2021
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