Since October, the federal Department of Health and Human Services Office of Inspector General (OIG) has published two versions of its plan of work for 2020. In both versions, the inspectors highlighted OIG’s efforts to review compliance with Medicare Part B billing requirements for clinical laboratory testing.
All clinical labs and pathology groups that bill Medicare should be aware that this area of lab compliance will get scrutiny by the OIG. At the national law firm of McDonald Hopkins in Cleveland, lawyers Arielle Lester, Rick Hindmand, and Courtney Tito issued a client advisory about the OIG’s 2020 plan of work. They advised all clinical labs, physician practices, and companies billing for clinical lab services to be aware that two specific claims are on the OIG’s radar as enforcement priorities.
One involves claims for genetic or urine drug testing and the second involves Medicare lab test claims that use code-pair modifiers. These clinical laboratory services may be at risk for overpayments, they added, which is why the attorneys recommended that those labs and billing companies should consider conducting self-audits on their billing and coding processes to ensure compliance with billing and other requirements. “The OIG has warned that it may use the results of these upcoming reviews to identify laboratories and other institutions that routinely submit improper claims,” they wrote. “Once identified, such labs or other institutions could be subject to educational audits, fraud and abuse audits, overpayment demands or other reviews and sanctions.”
In October, the OIG announced its intent to review Part B payments for urine drug testing (UDT) for Medicare beneficiaries diagnosed with substance-use disorder or a related condition, according to the advisory. “The OIG observed that Medicare fee-for-service data in 2018 showed improper payment rates of almost 30% for laboratory testing, including UDT, and nearly 72% for drug testing involving 22 or more drug classes,” the lawyers wrote.
Update to OIG Plan of Work
The second publication came in January when the OIG updated its work plan for this year to add compliance reviews of Medicare Part B payments related to Part B billing standards for ordering and supervising laboratory and other diagnostic tests. In the January work plan, the OIG highlighted a report it issued in February 2018 showing that Medicare overpaid $66.3 million for specimen validity tests billed in combination with UDTs.
In that report, the OIG said, Medicare improperly paid 4,480 clinical laboratories because providers did not follow Medicare billing rules and CMS’ payment systems did not prevent payment for specimen validity tests billed in combination with UDTs. The OIG said Medicare payments to healthcare providers are precluded unless, on request, the provider furnishes the information necessary to determine the amounts due. It will review Medicare payments for clinical laboratory testing and may use the results of these reviews to identify laboratories or other institutions that routinely submit improper claims, the OIG added.