Friday, June 23, 2023


New news.  I've reported in great detail for several full years on the massive and insane spending on Tier 2 codes at Novitas and FCSO MACs, the only MACs that pay in any real amounts for the high level Tier 2 codes like 81408.  I've called 81408 the "fraudomatic' code," with hundreds and hundreds of millions of dollars in visible payments in CMS database.   This extends from 2018 to 2021, at the least.

81408 fraud is different than, say, wheelchair fraud.  A given beneficiary, or 50 of them, MIGHT need electric wheelchairs.  But no elderly Medicare beneficiary has ever never 2 each of all 9 Tier 2 codes, on one day.  Codes, for example, for genes that cause epilepsy in babies.  The gusher of colossal funds wastage continued rampant, despite my public blogs, several major public trade journal articles, also here, and multiple DOJ prosecuted cases.   And it was hardly rocket science to avoid this billion dollars wasted: NGS MACs and MolDx MACs were able to avoid the problem easily and completely.  

Here at last is the scathing OIG report.

Novitas' new LCD for oncology allows a range of payable circumstances of 81408 (incuding at least one for pediatric disease), so fraudulent providers could happily comply and submit claims that were autopaid, unless stopped for records, something Novitas hasn't done in the past.

Similarly, CMS responded (page 19) they would try to audit some sample claims to see if the claims were payable.  Ahh, nice.  Everyone knows the claims are literally impossible.  CMS was part of the worst of the problem, deliberately and officially setting the payable limit for $2000 81408 claims at 2 per day.  Had it been set at 1 per day (like all other genetic tests), a half-billion dollars would have been saved.  

The report focuses laser like on 81408, not emphasizing the key feature, that if a lab billed 81408, and usually billed a stack of ALL THE TIER 2 CODES, in nearly every case.  This enormously adds a greater level of lunacy to an already preposterous claim (for 81408 itself). 

It also adds to the financial damage.  If the labs billing $888M of 81408 were looked at fully, they also billed around another $400M on top of that for other nonsensical Tier 2 codes.

CMS notes that it informed its contractors of problems with 81408, but the fact it took two MACs (not named, but OBVIOUSLY Novitas and FCSO) several years to stop a billion dollars in blatant erroneous payments, is appalling.

Despite this years of awareness, CMS left the "medically unlikely edit" for tests per day for 81408 at "2" not "1" like most all other genetic codes.  Had CMS taken a few seconds to set the test-per-day edit at "1", $500M would have been saved.  I guess no one in Baltimore had the necessary 30 seconds to do so.   

CMS periodically talks about its bold and advanced anti-fraud efforts, e.g. artificial intelligence, but this billiion dollar fraud could be detected by a ten year old with five minutes' training.  

The OIG report has interesting studies of the "ordering providers" who generally had no relationship with the tested patients (duh, surprise).  But it's also noted that one such provide referred to 28 labs (?!?).   It's also noted that several of the biggest ordering providers were already guilty of fraud charges by the time of the report.

It's not possible to easily look up the ordering providers, but the names of labs paid for 81408 and other high tier 2 codes are easily searched in a few seconds on a CMS database.

OIG notes that the labs could remit overpayments voluntarily.  Surprise, honey, how much of this money is already in the Cayman Islands or Macedonia?

OIG notes multiple times that the payments were absurd on their face (e.g. opinions of doctors regarding these codes, like Joubert syndrome.)   I can't tell why this couldn't have been given to recovery audit contractors in 2018, if MACs were too busy, which would have wholly prevented the over-billion-dollar loss.