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CMS to Crack Down on False Billing of COVID-19 Add-on Tests

by | Jan 24, 2023 | News, Open Content

Some labs took advantage of COVID coverage rules to bill Medicare for medically unnecessary RPPs, allergy, and genetic tests.

Labs that billed Medicare for respiratory pathogen panels (RPPs) and other “add-on” tests alongside COVID-19 tests need to be on high alert. Last month, the Department of Health and Human Services Office of Inspector General (OIG) issued a report suggesting that at least some labs might have taken advantage of the loosened coverage rules by billing Medicare Part B “questionably high levels” of expensive add-on tests to secure higher reimbursement. The agency has asked the Centers for Medicare & Medicaid Services (CMS) to go after these suspect labs.

After analyzing paid Medicare Part B COVID-19 tests from February through December 2020, the OIG 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 claims 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.

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. To ensure compliance and meet the potential demands of not just your Medicare Administrative Contractor but also private payors, you’ll need three things:

  • A requisition or test order showing that the treating physician or nonphysician practitioner (NPP) ordered all the tests you performed;
  • The patient record showing that all the tests performed, including both the underlying COVID-19 and any accompanying tests, were medically necessary for that particular patient; and
  • 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.

For more insight into OIG’s focus on COVID-19 add-on test billing, look to our upcoming February 2023 Lab Compliance Advisor.