In December 2021, the United States Department of Health and Human Services Office of Inspector General (HHS OIG) released a data brief that provided insights into trends and areas of possible concern related to the rapid growth of spend on genetic testing over the past few years.
Findings
In conducting the audit, HHS OIG analyzed Medicare Part B genetic-testing data for calendar years 2016 through 2019. HHS OIG did not review the supporting documentation with the data to determine the accuracy of coding or the medical necessity of the genetic tests, nor did they determine the underlying reasons for trends related to genetic tests.
For the audit period, Medicare payments for genetic tests quadrupled, going from $351 million to $1.41 billion (a 302% increase).
Additionally, the number of genetic testing procedure codes covered by Medicare went from 119 to 310, a 161% increase, while the number of genetic tests Medicare paid for increased by 230%, going from roughly 627,000 genetic tests in 2016 to more than 2 million tests in 2019.
Additionally, the average amount Medicare paid per beneficiary who received at least one genetic test increased by 75% (from an average of $889 in 2016 to $1,559 in 2019) and the average number of genetic tests paid per beneficiary increased by 43%.
According to the audit, the twenty laboratories that received the most in Medicare payments accounted for 73% of the total amount paid by Medicare for genetic tests, receiving more than $2.3 billion of the $3.2 billion spent by Medicare on genetic tests during the audit period. The audit also found that the number of laboratories that received more than $1 million in Medicare payments per year for genetic tests almost tripled and the number of providers ordering genetic tests for beneficiaries more than doubled.
What to Expect
While HHS OIG acknowledges that there are some “legitimate reasons” for the increases but say that the increases indicate areas of possible concern, “such as excessive and fraudulent genetic testing, which may negatively affect beneficiaries.” The audit cited to one specific beneficiary, who received 38 different genetic tests in 2018 and 2019, including multiple instances of the same tests being performed six or more times.
HHS OIG noted that oversight by CMS and the Medicare Administrative Contractors (MACs) is “critical to prevent fraud, waste, and abuse related to genetic testing and to protect Medicare beneficiaries.” It’s also important to note that Medicare Part B does not cover genetic tests when used for predictive purposes, but it does cover them if they are used for diagnostic purposes under certain conditions. In order for a genetic test to be covered under Part B, it must be ordered by a physician or qualified non-physician practitioner who is treating a beneficiary for a specific medical problem and who uses the results of the test to manage that problem. The test must also be related to the beneficiary’s illness, injury, symptom, or complaint.
Genetic Testing Fraud
In September 2019, HHS OIG issued a fraud alert about a fraud scheme involving genetic testing in which recruiters offered Medicare beneficiaries “free” screenings or cheek swabs for genetic testing. In turn, the recruiters obtained the beneficiaries’ Medicare information and used it for identity theft or fraudulent billing purposes.
In Summer 2019, the HHS OIG Hotline received between 50-60 complaints each week, with 20-24% of those complaints related to genetic testing.