Reimbursement Trends: OIG Report Shows Slight Uptick in 2017 Medicare Part B Lab Payments

On Jan. 1, 2018, the new Medicare Part B PAMA Clinical Laboratory Fee Schedule (CLFS) in which lab test reimbursements are based on a single national fee lab schedule for lab tests rather than 57 separate local fee schedules took effect. To gather baseline pricing data, the PAMA law requires the OIG to analyze Medicare payments for the top 25 lab tests under the previous system. On Sept. 25, OIG released the results for 2017, the fourth and final year of baseline data.

2017 Medicare Lab Payments by the Numbers
In 2017, CLFS payments for lab tests totaled $7.1 billion, up slightly from the $6.8 billion Medicare paid in 2016 but little changed over the entire four years of the baseline period. The table below shows where that money went.

How Medicare Spent Its $7.1 Billion for Lab Tests in 2017

Tests Beneficiaries Labs Providers

433 million: total tests billed

3.4: average number of tests received by beneficiaries per day

17: average number of tests per day for top 1% of beneficiaries

28 million: beneficiaries that received at least one test

16: average number of tests per beneficiary

86: average number of tests per beneficiary among top 1% of beneficiaries

56,859: labs that received Medicare payments

$125,388: average payments per lab

$1.1 billion: payments to top 3 labs

655,771: providers that ordered lab tests

466: average tests ordered per provider

5,964: average tests ordered by top 1% of providers

Source: OIG, “Medicare Payments for Clinical Diagnostic Laboratory Tests in 2017
* Note: For a comparison to 2016 data, see NIR, Oct. 2017, page 1

What Medicare Paid for Top 25 Lab Tests
As required by PAMA, the OIG report includes detailed analysis of the 25 most frequently ordered lab tests. While the top 25 tests always generate the lion’s share of payments, that trend was even more pronounced in 2017:

Payments for Top 25 Lab Tests 2014-2017

Year Total Percentage of All CLFS Payments
2017 $4.5 billion 64%
2016 $4.3 billion 63%
2015 $4.1 billion 58%
2014 $4.2 billion 59%

Other Report findings for the top 25:

  • 17 of the top 25 tests have been in the top 25 for all four years of the review;
  • The top five tests accounted for $2.2 billion, or 30% of all payments for lab tests in 2017;
  • The rankings of the top five tests haven’t changed in four years;
  • One percent of labs (272 out of 27,171 labs) received 55% of all Medicare payments for the top 25 lab tests in 2017.

Top 10 Lab Tests Based on Medicare Part B Payments in 2017

Rank Test Description and Procedure Code National Limitation Amount Number of Tests (in millions) 2017 Medicare Payments (in millions) Changes from 2016 Payments (in millions)
1 Blood test, thyroid-stimulating hormone (TSH) (84443) $23.05 21.5 $484 +$1.6
2 Blood test, comprehensive group of blood chemicals (80053) $14.49 41.6 $473 +$3.0
3 Complete blood cell count (red blood cells, white blood cells, platelets) and automated differential white blood cell count (85025) $10.66 41.5 $432 -$1.3
4 Blood test, lipids (cholesterol and triglycerides) (80061) 28.9 $415 +$4.4
5 Vitamin D-3 level (82306) $40.61 8.9 $348 -$1.9
6 Drug test(s), definitive, 22 or more drug class(es), including metabolite(s) if performed (G0483) $253.87 1.3 $307 +65.3
7 Hemoglobin A1C level (83036) $13.32 19.7 $257 +$6.2
8 Testing for presence of drug (80307) $79.81 3.3 $240 New code in 2017
9 Drug test(s), definitive, per day, 15-21 drug class(es), including metabolite(s) if performed (G0482) $204.34 0.8 $162 +$35.8
10 Blood test, basic group of blood chemicals (80048) $11.60 13.2 $130 -$3.7

Source: OIG, “Medicare Payments for Clinical Diagnostic Laboratory Tests in 2017


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