[Author: Lindsey Greenblatt]

OIG issued a report last week examining alleged billing irregularities relating to COVID-19 tests (the Report). The Report explains that in response to increased Medicare Part B spending on COVID-19 tests in 2020, OIG performed a review of clinical diagnostic laboratories that billed other diagnostic tests—including individual respiratory tests (IRTs), respiratory pathogen panels (RPPs), genetic tests, and allergy tests—in conjunction with COVID-19 tests. While OIG acknowledged in the Report that these “add-on tests” were not unusual, OIG focused on labs with a high volume or high payments for these add-on tests. OIG’s review identified 378 labs that they allege billed Medicare Part B for add-on tests at “questionably high levels” of either volume or payment amounts. OIG suggested that further scrutiny of the identified labs’ billing patterns was warranted to determine whether there was potential waste or fraud and referred the labs to CMS for further review.

In 2020, Congress expanded Medicare Part B coverage to include testing for COVID-19. Additionally, because respiratory illnesses can cause symptoms associated with COVID-19, CMS also expanded coverage to include certain respiratory tests. However, preliminary OIG analysis of Medicare B claims data raised concerns that some labs may be billing for allegedly unnecessary add-on diagnostic tests alongside COVID-19 tests that significantly increased Medicare payments.

In response to this concern, OIG attempted to identify labs that billed Medicare Part B for allegedly “questionably high levels of add-on tests.” The measures OIG used “identified (1) labs for which add-on tests constituted a high proportion of each lab’s total number of tests, and (2) labs for which add-on tests constituted a high proportion of each lab’s total payments for tests.”

Out of the total 19,577 labs that billed Medicare Part B for COVID-19 tests, OIG performed an outlier analysis of 5,588 labs that billed Medicare for add-on tests on claims for COVID-19 tests. These labs all billed Medicare for over 100 total COVID-19 and add-on tests. OIG determined which of these labs were statistical outliers based on a high proportion of add-on tests or a high proportion of payments for add-on tests.

In total, the analysis identified 378 labs that OIG alleges have questionable billing patterns. Of those, 276 labs were identified for allegedly high volumes of add-on tests, 263 labs were identified for allegedly high payment amounts for add-on tests, and 161 labs were identified as having both allegedly high volume of and payment amounts for add-on tests. Additionally, OIG identified eight outlier labs that allegedly billed Medicare “for the same tests for the same enrollee on the same day as another lab” and admitted that although this may be legitimate, this may indicate a fraud scheme. The 378 labs that OIG identified have been referred to CMS for further review.

The Report, including a detailed breakdown of the analysis, is available here.