OIG Monthly Work Plan Review: January 2019

This month, there were six new Work Plan items. The two pertaining to labs are detailed below. The first one has widespread implications for labs; the second may have implications for some labs

1. Medicare Payments for Clinical Diagnostic Laboratory Tests in 2018: New Payment Rates

Issue: Medicare is the largest payer of clinical laboratory services in the nation. Medicare Part B covers most lab tests and pays 100% of allowable charges, with no beneficiary copayment. In 2017, Medicare paid $7.1 billion for lab tests, a total that has changed very little in the four-year period from 2014 through 2017. The Protecting Access to Medicare Act of 2014 (PAMA) requires CMS to set payment rates for lab tests using current charges in the private healthcare market, under Title XVIII of the Social Security Act. On Jan. 1, 2018, CMS began paying for lab tests under the new system mandated by PAMA.

OIG Action: PAMA requires OIG to publicly release an annual analysis of the top 25 laboratory tests by expenditures. In accordance with PAMA, OIG will publicly release this analysis for 2018, the first year of payments made under the new system for setting payment rates.

2. States' Compliance with New Requirements to Prevent Medicaid Payments to Terminated Providers

Issue: To prevent terminated providers from treating Medicaid enrollees or receiving Medicaid payments, the 21st Century Cures Act requires CMS to provide information to all states on Medicaid providers that have been terminated for cause.

OIG Action: A study, mandated by the Cures Act, will examine the extent to which terminated providers included in CMS's terminations database have been terminated from all state Medicaid programs and the amount of Medicaid payments for items/services associated with terminated providers. Additionally, this study will examine the extent to which state contracts with managed care entities include a provision that terminated providers are excluded from all managed care networks.