Wednesday, December 7, 2022

OIG Reports on Pathogen Labs With Too Much Add-on Testing - But It Began Before COVID

OIG has issued a report that some labs have billed Medicare for dubious amounts of add-on testing for pathogens.  See the new 19-page OIG report here.  See coverage at Genomeweb here.  

The OIG provides an excellent public analysis of the abusive schemes and templates; having a background in this kind of thing, I really enjoyed it.

Previously, there have been some commercial insurer lawsuits against labs that billed for federally covered COVID testing during the pandemic, while adding on thousands of dollars of other pathogen testing.


Some Prior Data

In my recent analysis of 2021 Medicare Part B spending, I noted that COVID testing was about $1B, and other molecular testing about $2.8B (total, $3.8B).  

Much dubious spending occurs, around $1.5B over several years.  Highly dubious Tier 2 code spending ran about $500M in 2021 alone (that much in excess of base year 2017, and from little-known labs in a very limited geography, a number of which were indicted by DOJ.)   By "highly dubious" I mean patterns like billing 2 units of every Tier 2 code for every patient, or some some labs, as many as 4 units.  Statistically there may not be even 1 patient in the US that requires that billing pattern, let alone...every patient the lab sees.

Meanwhile, spending for "other pathogen 87798" was only around $20M in base years like 2016, 2017, but began rising sharply from 2018 forward.  

87798 was already skyrocketing in 2019, before the existence of COVID.   In COVID years 2020, 2021, 87798 spending was about $200M a year, up from the base of around $20M.   Interestingly, most 87798 spending in Part B was in "MolDx States" whereas other abusive codes were primarily in Novitas/FCSO MACs.   (The third MAC system, NGS MAC, had minimal spending for either tier 2 codes nor 87798, in any year.)  By 2022, MolDx MACs have far more restrictive policies on 87798 and pathogen panel codes than prior (here).