Kentucky Pain Clinic Pays $127K to Settle Specimen Validity Test Billing Claims

Case: The Northern Kentucky Center for Pain Relief agreed to pay the OIG $126,799.90 to settle claims of billing Medicare for specimen validity testing (SVT). Explanation: Under Medicare rules, urine drug testing is deemed medically necessary to detect and quantify the presence of drugs in a patient’s body.  However, SVT, which analyzes the urine specimen to ensure that it hasn’t been tampered with or adulterated, is not deemed medically necessary if its sole purpose is to validate the specimen because the test results aren’t being used to manage the beneficiary’s treatment.

Significance: Last year, the OIG audited $67+ million in Medicare Part B payments for SVTs billed in combination with urine drug tests, i.e., on the same dates of service, from 2014 through 2016. The findings: $66.3 million of the payments were improper. Those payments were received by 4,480 clinical labs and physician offices. (See, National Intelligence Report, March 16, 2018, for more details.) The OIG called on CMS to recover those SVT payments from labs, which apparently included the Kentucky clinic involved in this settlement.