CMS to Crack Down on Unnecessary COVID-19 Add-on Tests
Recent OIG report suggests some labs might have gamed Medicare coverage rules in 2020 by billing for unusually high numbers of such tests.
COVID-19 lab testing fraud and abuse is emerging as a priority for future federal enforcement efforts. The latest rumbling comes from a December 6, 2022, U.S. Department of Health and Human Services Office of Inspector General (OIG) report suggesting that some labs might have gamed the Medicare Part B coverage rules in 2020 by billing for “questionably high levels of add-on tests alongside COVID-19 tests” to get higher reimbursements. In an ominous note, the OIG warns that the high volume of billing for add-on respiratory, genetic, and/or allergy tests raises not just Medicare program costs but also “concern about potential waste or fraud, suggesting a need for further scrutiny of billing by these labs.”1
Why Add-On Tests Are Problematic
When the COVID-19 pandemic struck in 2020, the Centers for Medicare & Medicaid Services (CMS) expanded Medicare coverage for tests to diagnose the virus and created a new Healthcare Common Procedure Coding System (HCPCS) code (U0001) that labs could use to bill for those tests.2 Soon thereafter, the US Centers for Disease Control and Prevention (CDC) issued guidance encouraging practitioners ordering COVID-19 tests to consider also testing for influenza and other respiratory illnesses with symptoms similar to COVID-19 so as to rule out or confirm a diagnosis other than COVID-19.3 To align with these recommendations, CMS extended coverage to certain other respiratory tests deemed medically necessary, including via allowing nonphysician practitioners (NPPs) to order those tests. As the pandemic deepened, the list of covered tests expanded.
While necessitated by the public health emergency, relaxation of Medicare billing and coverage rules for COVID-19 testing didn’t sit well with the OIG. Even before the pandemic, the OIG had worked with law enforcers to investigate fraudulent physician ordering of medically unnecessary high-reimbursing genetic tests in exchange for kickbacks. In June 2020, it added billing of add-on tests in conjunction with COVID-19 tests to its Work Plan (Item OEI-09-20-00450, accessible at https://oig.hhs.gov/reports-and-publications/archives/workplan/index.asp).4 The agency expressed “program integrity concerns” about the potential for fraudulent billing for associated respiratory pathogen panel (RPP) tests, along with high-reimbursing genetic and allergy tests.
The New OIG Report Findings
To confirm these suspicions, the OIG analyzed paid Medicare Part B COVID-19 tests from February through December 2020. The agency found that of the 19,577 labs that received payments, 378 billed Medicare on the same claim for add-on tests, i.e., immunoreactive trypsinogen tests (IRTs), RPPs, genetic tests, and allergy tests, “at questionably high levels.” During the 11-month period, those 378 outlier labs received over $67 million for add-on tests, an average of $227 per claim, as opposed to $89 per claim for the 19,199 other labs without questionably high levels of add-ons. One lab actually averaged about $1,000 per claim, the OIG notes. Among the 378 outliers:
- 276 labs billed for high volumes of add-on tests on claims for COVID-19 tests;
- 263 labs billed for high payment amounts from add-on tests on COVID-19 test claims; and
- 161 labs billed for both high volumes and payment amounts from add-on tests.
IRTs and RPPs were the most commonly billed types of add-on tests responsible for driving up Medicare Part B COVID-19 test payments, according to the OIG. To the extent these tests also assess respiratory conditions, these add-ons might have been ordered legitimately to rule out or confirm respiratory illnesses other than COVID-19 for patients with respiratory symptoms, the OIG explains. What it doesn’t say but implies is that the allergy and genetic tests billed alongside COVID-19 will be less easy to justify.
Add-on tests increased Medicare Part B payments to outlier labs by amounts
ranging from $66 to $237 per test on average
| Add-On Test Category | Average Payment per Test | Total Payment | Number of Tests | Number of Labs |
|---|---|---|---|---|
| IRTs | $66 | $48,299,294 | 728,203 | 373 |
| RPPs | $237 | $18,611,493 | 78,672 | 178 |
| Allergy Tests | $155 | $178,124 | 1,150 | 18 |
| Genetic Tests | $198 | $36,123 | 182 | 16 |
Source: OIG analysis of Medicare Part B claims data from February through December 2020 from “Labs With Questionably High Billing for Additional Tests Alongside COVID-19 Tests Warrant Further Scrutiny” OIG report. December 2022.1
The OIG also found other red flags of potential fraud and abuse. A few labs had at least 10 claims where two labs had billed for the same enrollee for the same tests on the same day, which could suggest a fraud scheme involving the sharing of enrollee information. Some of the outlier labs billed for add-on tests in combinations that varied little from patient to patient, suggesting that the tests weren’t specific to each patient’s individual needs.
The Takeaway
Citing the need for further scrutiny, the OIG referred the 378 outlier labs to CMS for further billing practices review. If your lab is among that group, it must be on the very highest of alerts. But any labs that have received Medicare Part B for add-on tests billed alongside COVID-19 tests must ensure that they have clear and complete records documenting compliance with Medicare coverage and medical necessity requirements.
The starting point is to identify the add-on tests that the OIG, CMS, Medicare Administrative Contractors (MACs), and even private payors are targeting in the context of COVID-19 testing. The OIG report lists the following HCPCS codes as add-on tests under potential scrutiny when billed alongside COVID-19 tests:
| Potentially Problematic COVID-19 Add-On Tests The OIG reviewed HCPCS codes associated with four categories of COVID-19 add-on tests. The list isn’t exhaustive and other HCPCS codes may be problematic when billed alongside COVID-19 tests: Individual Respiratory HCPCS codes (47 tests) 87265, 87275, 87276, 87278, 87279, 87280, 87281, 87299, 87300, 87305, 87385, 87400, 87420, 87430, 87449, 87483, 87485, 87486, 87487, 87501, 87502, 87503, 87540, 87541, 87542, 87555, 87556, 87557, 87580, 87581, 87582, 87634, 87650, 87651, 87652, 87653, 87797, 87798, 87799, 87800, 87801, 87802, 87804, 87807, 87880, 87899, 87999 RPP HCPCS codes (8 tests) 87631, 87632, 87633, 0098U, 0099U,0100U, 0115U, 0151U Allergy HCPCS codes (35 tests) 95004, 95012, 95017, 95018, 95024, 95027, 95028, 95044, 95052, 95056, 95060, 95065, 95070, 95076, 95079, 95115, 95117, 95120, 95125, 95130, 95131, 95144, 95145, 95146, 95147, 95148, 95149, 95165, 95170, 95180, 95199, 86001, 86003, 86005, 86008 Genetic HCPCS codes (456 tests) 81105-81112, 81120, 81121, 81161-81168, 81170-81194, 81200-81279, 81283-81337, 81340-81348, 81350-81353, 81355, 81357, 81360-81364, 81370-81383, 81400-81408, 81410-81417, 81420, 81422, 81425-81427, 81430-81440, 81442-81443, 81445, 81448, 81450, 81455, 81460, 81465, 81470, 81471, 81479, 81490, 81493, 81500, 81503-81504, 81506-81512, 81518-81522, 81525, 81528, 81529, 81535, 81536, 81538-81542, 81545, 81546, 81551, 81552, 81595, 81596, 87153, 0001M, 0001U, 0002M, 0002U, 0003M, 0003U, 0004M, 0005U, 0006M, 0006U, 0007M, 0007U, 0008M, 0008U, 0009M, 0009U, 0010U, 0011M, 0011U, 0012M, 0012U, 0013M, 0013U, 0014M, 0014U, 0015M, 0016M, 0016U, 0017U, 0018U, 0019U, 0021U-0027U, 0029U-0056U, 0058U-0061U, 0067U, 0069U, 0080U, 0083U, 0084U, 0087U0092U, 0101U-0103U, 0110U, 0111U, 0113U, 0120U, 0129U-0138U, 0153U, 0156U-0162U, 0168U-0171U, 0175U, 0177U, 0179U-0201U, 0203U-0205U, 0208U, 0209U, 0211U-0219U, G9143, S3800, S3840-S3842, S3844-S3846, S3849, S3850, S3852-S3854, S3861, S3865, S3866, S3870 |
Implement 4-Step Documentation Strategy
To ensure compliance and meet the potential demands of not just your Medicare Administrative Contractor but also private payors, you’ll need documentation of four things:
1. The Test Order
First, you’ll need documentation showing that the patient’s treating physician or NPP ordered all of the tests you performed for the purposes of diagnosing or treating a specific medical problem. Specifically, you must have:
- A signed requisition or order that lists the specific tests;
- An unsigned requisition or order listing the specific tests; and
- An authenticated medical record supporting the physician or NPP’s intent to order the test.
Each test performed must be listed on the order. Vague notations like “run labs” or “check respiratory” aren’t adequate to demonstrate the intent to order a specific test.
2. The Medical Need for the COVID-19 Test
The patient’s medical record must contain information indicating why the COVID-19 tests performed are medically necessary. That determination must be made by the attending provider based on an individualized clinical assessment that meets current accepted standards of medical practice.
3. The Medical Need for the Add-On Test
You must also document the medical necessity of any test you perform alongside the COVID-19 test. That’s true even if the add-on tests were respiratory assays recommended by the CDC. Simply relying on CDC and other guidelines recommending other respiratory tests be performed alongside COVID-19 testing for patients with respiratory symptoms won’t be enough to document the medical necessity of RPPs. Labs must show that the test orderer made the determination that the add-on tests were medically necessary for that particular patient.
Caveat: Add-on tests should not be bundled or incorporated into prepackaged panels unless each panel test is clearly listed in such a way as to enable the physician or NPP to select or not select it. Simply putting a statement on your requisition forms that declares that the physician/NPP agrees that by ordering the COVID-19 test, he/she considers the additional tests as medically necessary won’t work, either. Remember, it’s not the recitation of the sentence that’s important but the reason why it’s medically necessary.
4. Use of Test Results
Last but not least, you need documentation showing that the results of each test performed were actually used by the ordering physician or NPP for diagnosing and treating the particular patient.
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