Study Highlights Tension Between Physician Orders, Utilization Management of Lab Testing

A recent study on “low-value” medical procedures highlights the need for clinical laboratories to work with referring physicians to educate them about appropriate test ordering. Medicare spent as much as $1.9 billion on medical procedures, including laboratory tests, considered “low-value,” according to a study published online May 12 in the JAMA Internal Medicine that examined nearly 1.4 million Medicare beneficiaries’ claims data from 2009. Some of the laboratory services deemed low-value included cervical cancer screening in women over 65 years of age, prostate-specific antigen testing for men 75 years and older, and colorectal cancer screening in older persons of both sexes. In all, 26 services were included in the list of low-value services. Low-value services can be easily considered services that are not medically reasonable and necessary and therefore not payable under the Medicare program. The value of a service was determined using criteria from the American Board of Internal Medicine Foundation’s Choosing Wisely initiative, the U.S. Preventive Services Task Force D recommendations, the National Institute for Health and Care Excellence “do not do” recommendations, the Canadian Agency for Drugs and Technologies in Health Assessments, and peer-reviewed medical literature. The Sensitivity vs. Specificity Trade-Off There were two levels considered in the study, and depending on which level is considered, the amount of overall spending on low-value services varied from 0.6 percent to 2.7 percent of Medicare spending during the year studied. If the more sensitive criteria are used, the number of services and the overall spending increases. If the more specific criteria are used, the spending decreases. The study authors indicate that their study may represent only a small fraction of the actual low-value services paid for by Medicare. Most Common Overutilized Tests Cancer screening and imaging services were the most common overutilized services in terms of the number of claims involved, while cardiovascular testing and procedures accounted for the vast majority of spending. According to the study, 1.9 percent of all Medicare spending was for low-value cardiovascular services when the sensitivity measure is used. There are many somewhat obvious problems and limitations to the analysis of the data because it used claims data and did not include clinically important information on patients. That means that in some cases services are classified as low-value when they were actually appropriate for the individual patient involved. The authors wrote, “Despite their imperfections, claims-based measures of low value care could be useful for tracking overuse and evaluating programs to reduce it. However, many direct claims based measures of overuse may be insufficiently accurate to support targeted coverage or payment policies that have a meaningful [e]ffect on use without resulting in unintended consequences.” In an accompanying editor’s note, JAMA Internal Medicine Deputy Editor Mitchell H. Katz, M.D., and colleagues write, “This article highlights the opportunity for eliminating unnecessary care, and we hope that others will use and improve the methods developed by the authors. Most important, we hope that development of better measures of low-value care will ultimately spur development of interventions to reduce unnecessary care.” What Does This Study Mean for Labs? Many laboratories are involved in efforts to control utilization of laboratory services deemed unnecessary or inappropriate by the laboratories’ medical directors. These efforts create problems when a laboratory deems a test or panel of tests unnecessary or inappropriate but, because its testing services are based on orders from referring physicians, it continues to perform the testing and file claims for it if the ordering physician insists. The auditor could use the lab’s own data to support its assertion that the services were unnecessary or inappropriate. There is the very real potential for “low-value” to be defined as “medically unnecessary” for Medicare claims adjudication processes, particularly in the post-payment audit case. This could be one of the unintended consequences of this study and others like it. The data could be used to support refund demands for services provided that are determined as low-value, especially when a provider continues to provide the services at a higher rate than other similar providers. If the Centers for Medicare and Medicaid Services uses study conclusions to develop rational coverage policies, there are obvious benefits to the Medicare and Medicaid programs in terms of reducing unnecessary spending in their programs. If that is the case, Medicare beneficiaries who want to have these services would likely have to bear the burden of paying for them on their own. The impact on providers would include a likely reduction in the number of these services provided or ordered. In terms of laboratory compliance, labs may find themselves in the middle of conflicts between a physician’s determination of the medical necessity of some tests or services and conclusions by payers about the medical necessity of the tests. Since the laboratory files the claim, it suffers the denials and risks of being seen as abusing the Medicare program. Takeaway: Laboratories need to understand the potential consequences of utilization management efforts and make sure they carefully document their efforts to get their referring physicians to order tests appropriately and only when they are reasonable and necessary as defined by Medicare.