OIG Releases 2016 Work Plan, Again Targeting Laboratory Billing

Last week the OIG released its 2016 Work Plan that continues to name laboratories as a source of concern with regard to Medicare billing and payment. The OIG's annual Work Plan provides a summary of new and continuing reviews that the agency is undertaking to protect the integrity of, and find opportunities to improve the efficiency of, U.S. Health and Human Services programs.

This year's Work Plan contains a holdover from last year's Work Plan: "Selected independent clinical laboratory billing requirements." The agency is concerned about Medicare payments to independent clinical laboratories— specifically, it's looking for labs that "routinely submit improper claims." The OIG claims that audits and investigations indicate independent clinical laboratories are at risk for noncompliant Medicare billing.

Once again, the OIG also promises to review Medicare payments for clinical diagnostic laboratory tests, including the top 25 clinical diagnostic laboratory tests by Medicare expenditures. This item was added in the OIG's mid-year update to the 2015 Work Plan and is required by the Protecting Access to Medicare Act. The OIG says it has found in the past that Medicare "pays more than other insurers for certain high-volume and high-expenditure laboratory tests." In September, the OIG issued its baseline analysis of the top 25 lab tests according to review of 2014 data. That report indicated that $7 billion was paid to 63,000 labs under Medicare Part B in 2014 for 451 million lab tests performed for 27 million Medicare beneficiaries. Medicare paid $4.2 billion in payments for the top 25 lab tests. Over half of Medicare beneficiaries receive at least one lab test in 2014; the average was 17 tests per beneficiary. One percent of beneficiaries received 95 or more tests. Lab tests generated approximately 3 percent of total Medicare Part B payments and the majority of Medicare payments for the top 25 laboratory tests went to independent labs.

The newest laboratory-related item in the OIG Work Plan indicates the OIG is focusing on the propriety of payments to histocompatibility laboratories, which reported $131 million in reimbursable costs on recent cost reports (covering March 31, 2013 through Sept. 30, 2014).

For all three projects specifically mentioning laboratories, the Work Plan predicts review reports will be issued in fiscal year 2016.

Other projects included in the OIG Work Plan that could impact laboratories directly or indirectly include:

• Enhanced enrollment screening process—the OIG is concerned about the implementation of enhanced enrollment screening procedures which are intended to use site visits, fingerprinting and background checks to prevent fraud and abuse.

• EHRs in ACOs—the OIG will be checking to see if Accountable Care Organization (ACO) participants are using electronic health records (EHRs) to share health information and increase coordination, and identify best practices and barriers concerning interoperability.

• ACO performance—A new item focuses on ACO participation in the Medicare Shared Savings Program. The OIG will review participation with regard to savings achieved and performance measures for the first three years. Examples of ACOs that performed well will be reported as well as difficulties encountered in ACOs. A report is anticipated in 2017.

• ICD-10—A new item also indicates the OIG will examine how well the new ICD-10 codes were implemented, including guidance offered to providers and impact on claims processing. Note that CMS recently added a Frequently Asked Question to its website that indicated CMS won't require that an ordering provider "rewrite the original order with the appropriate ICD-10 code for lab, radiology services or any other services" –so for orders written prior to October 1, 2015, an ICD-9 code might have been used on the order and it will not have to be rewritten. If the order is for a repetitive service that will be continued after October 1, 2015, providers can "use the General Equivalence Mappings (GEMS) posted on the 2016 ICD-10-CM and GEMS web page to translate the ICD-9-CM codes on the original order into ICD-10-CM diagnosis codes."

Takeaway: Laboratories continue to remain a concern for the OIG with regard to appropriateness of Medicare billings, particularly for independent clinical laboratories.