From 2016 through 2020, Medicare Part B paid roughly $3 billion for 17.1 million definitive drug testing services to 3.3 million beneficiaries. The Department of Health and Human Services Office of Inspector General (HHS OIG) recently looked at those payments and found that Medicare Part B payments for definitive drug testing services were at risk for noncompliance with Medicare requirements.
Medicare covers drug testing services when they are both reasonable and necessary for the diagnosis or treatment of the beneficiary’s illness. The drug testing services must generally be ordered and testing results used by the treating physician (or non-physician practitioner).
CMS and Medicare contractors do have program safeguards in place to prevent and detect improper payments and to promote compliance, including coverage determinations for specific items and services, claims processing edits, oversight activities, and targeted provider-specific reviews.
In conducting the audit, HHS OIG found that Medicare paid $760.8 million on behalf of 805,080 beneficiaries for 3.4 million definitive drug testing services, of which $704.2 million was for definitive drug testing services that were at risk for noncompliance with Medicare requirements from 2016 through 2020. Those payments were not only for the definitive drug testing service with the highest reimbursement amount – definitive drug testing for 22 or more drug classes – but they were also made to 1,062 at-risk providers that routinely billed the procedure code (even in instances where it may not have been reasonable and necessary). These providers billed the procedure code for definitive drug testing for 22 or more drug classes (G0483) for 75% or more of their definitive drug testing services.
HHS OIG also reviewed payments made to 4,227 “other providers,” or non-at-risk providers, who did not routinely bill for the service and compared the characteristics of the two groups. Medicare Part B paid “other providers” a total of $2.2 billion on behalf of 2.9 million beneficiaries for 13.7 million definitive drug testing services, of which $676 million were for procedure code G0483.
While the Centers for Medicare and Medicaid Services (CMS) did identify overpayments for procedure codes through oversight activities, those program safeguards were not enough to prevent (or even detect) payments made to at-risk providers for the procedure codes that were at risk for noncompliance with Medicare requirements.
HHS OIG concluded that Medicare could have saved up to $215.8 million if program safeguards focused on at-risk payments that were at risk for noncompliance with Medicare requirements. Therefore, the agency recommends putting in place adequate program safeguards to detect at-risk payments to at-risk providers is critical to preventing future overpayments and saving taxpayer dollars.
HHS OIG Recommendations
As noted above HHS OIG recommends that CMS expand program safeguards to prevent and detect at-risk payments to at-risk providers for procedure code G0483. The agency also recommends that CMS reviews at-risk payments made to at-risk providers during and after the audit period (January 2016 through December 2020) and recover any overpayments and notify appropriate providers to exercise reasonable diligence to identify, report, and return any overpayments. Finally, HHS OIG recommended that CMS educate providers that received payments that were not in compliance with Medicare requirements.
CMS concurred with the first recommendation and even provided corrective actions it had already taken or planned to take. CMS did not concur with the second or third recommendation, and seemed to have no comment on the fourth recommendation but did provide information on corrective actions it had taken or planned to take. HHS OIG stated that “after reviewing CMS’s comments, we maintain that our second and third recommendations are valid.”