Saturday, December 26, 2020

Blog #4 of 5: NGS MAC Manages 20% of Medicare, Pays 0.1% of Tier 2 Codes

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

Blog #1 here, Blog #2 here, Blog #3 here, Blog #4 here, Blog #5 here.


Earlier this month OIG reported for Medicare that CPT code 81408, a hitherto almost unused Tier 2 code, was the highest-paid genomics code in 2019.  

This led me to study where it's billed (mostly states under Novitas, including Mississippi and Oklahoma), and its growth rate (81048 grew 580X in just three years 2016-2019).   

Then, I turned to Tier 2 billing as a whole (all the codes 81400-81408), here.   I had noted that billing for code 81408 plummeted 99% when Palmetto took over the southern states TN GA AL in across 2018/2019.  That led me to look at Tier 2 billing as a whole, and, in the MolDx system as a whole (here).  I discovered that only 2% of  all Tier 2 dollars 81400-81408 in 2018 were paid by the MolDx MACs, despite their paying a predominance of mopath codes overall.   

In all this, I've said that most of the billing went out via Novitas, which has no edits on Tier 2 codes per its public LCD.   (That's about $400M in Tier 2 codes in 2019, almost as much as the entire domain of mopath spending in 2016/2017.)   You may be asking, what about NGS MAC?   

Tier 2 Payments by NGS MACs, CY2018

NGS MAC has 10 states, three in the midwest under Jurisdiction 11 (MN, WI, IL) and 7 in the northeast under Jurisdiction JK.  

Together these are about 20% of fee for service Medicare.  

The cumulative billings for Tier 2 codes in these states for CY2018 are in this table:

NGS MAC has 20% of Medicare Population and 20% of States

RESULT:  NGS MAC has 20% of Medicare population but pays 0.1% of Tier 2 budget.

Take a moment to catch your breath.


So MolDx MACs had 2% of payments in 2018 ($4M/$190M), and NGS MACs had 0.1% of payments ($268K/$190M).   

I suspect the level of payments in MolDx MACs remained more or less similar in 2019 (circa $4M) and in the NGS MACs (circa $300,000) while the national Tier 2 spending (thus, mostly under Novitas and First Coast) grew from $190M to $400M.    Here's what Novitas says about Tier 2 edits:

Novitas LCD re Tier 2 Codes