The CRUSH Initiative and Medicare's Bone-Headed Stupid Payments for 81408 and Other Insane Codes

In June 2023, OIG published that Medicare's highest paid genomic test code, 81408, was likely unbelievable and fraudulent from day 1.   Here.  Practically a billion dollars had gone out from 2018 to 2022, when Medicare payments for 81408 were stopped  The code was never billed in the NGS MAC and MolDx regions, and nearly all payments were in Texas (Novitas MAC) and Florida (FCSO MAC).

Payments look like this:

If you know that 81408 is medically unbelievable in a Medicare population, let's add that these labs billed and were paid 81408 in units of 2 per patient, 81407 in units of 1 per patient, and 81406 in units of 2 per patient.   So patients actually had not 1, but 5 or more unbelievable codes ON EACH CLAIM.

I first referred to 81408 as the "fraudomatic code" in the fall of 2020.  Here.  Over the next 5 years, I published about a dozen follow up blogs.

Four more insights into the MAC insanity here:

NEW INSANITY #1

Some labs in Florida had huge payments under 81408 in 2022.  When that gusher of money stopped in 2023 (bar chart above), the SAME LABS just switched to other costly, unbelievable codes like 81419 (epilepsy gene panel).   Here.  OMG.

 NEW INSANITY #2

More on the codes that were switched to.

Despite seeing the massive risks of uncontrolled, costly genetic codes in Texas and Florida by 2022, and publishing on this in 2023, the same insane explosive growth continued in Texas and Florida in 2024, on the codes 81419 (epilepsy $2449), 81440 (mitochondrial $3324), and 81443 (Ashkenazi Panel $2449).

  Whereas the natural (original) spending on these codes in Medicare should be and is, close to zero, the 2024 spending was $161M.

Puzzle - which is worse, DME fraud or Genetics fraud?  I would argue DME fraud bills for implausible volumes of services, while this genetics fraud bills for impossible types of services, which should be easier to detect.  

NEW INSANITY #3

The older rate for 87798, other pathogen, $35, was significant in 2019, at $100M.  But nothing can explain the skyrocketing value adding $200M from 2022 to 2024.  The extra and sudden $200M was similar to booming rates for inexplicable codes 81408, 81419, 81440, 81443.   

Billing by LabCorp and Quest was about nil.  But in Texas and Florida...watch out.   (MolDx largely cut off 87798 payments by around 2022.)

NEW INSANITY #4

This whole time, the program integrity people at CMS left the "Medically unlikely edit" at N=2 for code 81408.   If it had been reset to "1", which would have taken five minutes, in 2019 or 2020, CMS would have saved $400M.   

Even today, March 2026, the medically reviewed and passable units per claim on 81408 is ... TWO.  Here.  This is a supervised edit.  Someone had to look at this and decide the allowable edits were TWO.  

And even after it was a top fraud investigation - surely, by 2022, based on the 2023 OIG publication - nobody at OIG, or a MAC, or a UPIC, or the big CMS program integrity group, could be bothered to reset the MUE units to 0 or 1, saving hundreds of millions of dollars.  

In March 2026, it's still...medically allowable as TWO units.

So when I'm interviewed about CMS fraud, like the new CRUSH initative, I say you don't need a supercomputer and the idiocy is a mile deep.

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Related:

Ought of curiousity, i asked "Chat GPT" to write an essay about potential adverse events from CRUSH in the 'legit' lab industry.