Enforcement Trends: Labs Getting Swept into the Opioid Crackdown Vortex

Best known for its employment applications, urine drug testing is also medical protocol for patients prescribed opioid drugs. Urine tests are used to ensure patients are not developing addictions and confirm they are actually taking the meds rather than selling them on the black market. Accordingly, such testing figures prominently in what is rapidly becoming Public Enemy Number 1 for federal health care enforcers: prescription opioid abuse.

Old Problem, New Urgency
Urine drug testing has been on the government’s radar for years. Increases in opioid prescriptions have coincided with increases in utilization. But the real red flag has been the rising prices of such tests. Once a simple and inexpensive procedure involving a test cup and strip, many labs have upped the ante by installing high tech testing machines. In addition to being pricier, machine tests have offered another financial advantage: Under Medicare rules, each individual drug tested for could be billed individually.

All of this has caused urine testing reimbursements to skyrocket. Thus from 2011 to 2014, Medicare and private insurer spending on urine screens and related genetic tests quadrupled to roughly $8.5 billion per year, according to Kaiser Health News and Mayo Clinic analysis. In 2014, the federal government paid more in urine drug tests than for the four most recommended cancer screenings combined.

This additional spending has proven a windfall for some physicians, especially those that operate their own testing labs, typically as part of a pain management, drug screening or other clinic. Bloomberg reports that in 2014-2015, Medicare paid over 50 different pain management practices at least $1 million for drug-related urine tests. According to Bloomberg, 31 pain practitioners derived at least 80% of their Medicare income from urine testing.

Suspicion Grows
Of course, none of this has been lost on the feds. Back in 2010, CMS tightened up on billing for simple urine screens. But the new rules did not cover machine testing. Prosecutors, too, began taking note of the spike in reimbursements and the incongruously high rates for what were thought to be simple tests. The remark of a Jacksonville, Florida assistant U.S. attorney reportedly quoted in Bloomberg sums up the attitude: “We’re focused on the fact that many physicians are making more money on testing than treating patients. It is troubling to see providers test everyone for every class of drugs every time they come in.”

The Millennium Case
The enforcement breakthrough came in 2011 when one of the country’s leading billers of urine drug tests, Millennium Health LLC, faced an onslaught of whistleblower suits for allegedly billing Medicare and Medicaid for millions in unnecessary urine drug and genetic tests and providing freebies to physicians in exchange for referrals. The Justice Department picked up the case and in October 2015, Millennium agreed to fork over $256 million to settle the claims. Faced with such a liability, Millennium soon filed for bankruptcy.

Enter the Opioid Epidemic
The seeds for a crackdown on urine drug testing sowed earlier have been brought into full bloom by the opioid epidemic.

The issue has morphed from financial rip-off to full blown national health crisis. What is being questioned now is not simply the billing or even ordering of the tests but the underlying decision to prescribe opioids in the first place. Accordingly, during the recent explosion of opioid abuse cases, physicians and not labs have been the primary target.

Takeaway: First the Doctors, Then the Labs
While testing labs are not the prime concern, they are still an integral part of the case. In the early cases labs have come into play only to the extent they were part of the ordering physician’s “pill mill” operation. Accordingly, labs owned or operated by physicians currently have the most to fear. But that is bound to change. The opioid crackdown is just starting and it is only a matter of time before hospital and independent labs come under scrutiny.

In fact, the OIG may have just fired the first warning shot across the bow. On Feb. 20, the agency published a new report stating that between 2014 and 2016, Medicare made $66.3 million worth of improper specimen validity tests billed in combination with urine drug tests to 4,480 clinical labs and physician offices. (See the story on page X for more details.)

Bottom Line: Any and every lab that is involved in urine drug testing of opioid patients, whether physician-owned or independent, has to be on high alert.