Pathology/Lab Coding Alert

Document 3 key items for clean claims.

Ballooning lab utilization and questionable “add on” testing has recently put labs under the Department of Health and Human Services (HHS) Office of Inspector General’s (OIG) microscope.

Read on to see how two reports and enforcement action from 2022 offer a cautionary tale for your lab this year.

Beware False Billing of COVID-19 Add-On Tests

Your lab may utilize additional testing in tandem with COVID-19 tests, but the documentation must ensure the medical necessity of those extra labs, according to a 2022 year-end OIG report.

Details: Last December, OIG released a new report that showed labs billed Medicare Part B for “high levels of add-on tests alongside COVID-19 tests in 2020.” Furthermore, “this significantly increased the payments they received for claims that included COVID-19 tests,” OIG found.

Though it’s not unusual for labs to bill for COVID tests and add-on tests, the preponderance of billing for “other diagnostic tests — such as individual respiratory tests (IRTs), respiratory pathogen panels (RPPs), genetic tests, and allergy tests —” alongside the COVID-19 tests repeatedly was surprising, especially since 378 labs billed at “questionably high levels,” OIG says.

Many of the labs billed Medicare for the same tests with little to no variation per beneficiary. “For example, one outlier lab regularly billed for a combination of five add-on respiratory tests on almost all of its claims for COVID-19 tests,” OIG notes. “As a result, the average per-claim Medicare payment to this outlier lab was $666, covering both COVID-19 and add-on tests, compared to an average payment of $89 to all other labs that billed for COVID-19 tests and any add-on tests.”

Caveat: Because IRTs and RPPs also assess respiratory conditions, physicians may legitimately order these add-on tests to rule out or confirm respiratory illness other than COVID-19 for patients exhibiting respiratory symptoms.

Do this: If clinicians order and your lab bills add-on testing with COVID-19 tests, you need to take the following three steps to ensure that your lab claims are audit proof:

• Make sure you have a requisition or test order showing that the treating physician or nonphysician practitioner (NPP) ordered all the tests you performed;
• Ensure that the patient record shows that all the tests performed, including both the underlying COVID-19 and any accompanying tests, were medically necessary for that particular patient;
• Establish an ordering or reflex testing protocol demonstrating that the clinician must consider the results of each test performed for diagnosing and treating the particular patient before proceeding to additional tests.

Watch for: The OIG has referred the outliers to the Centers for Medicare & Medicaid Services (CMS) for review, so enforcement action may be in the wings. Also, the OIG plans to continue to monitor COVID-19 lab testing with additional tests, so make sure your lab stays on the straight and narrow.

Read the report at oig.hhs.gov/oei/reports/OEI-09-20-00510. pdf.

See If Increased Lab Utilization is Legit

A second year-end OIG report focused on the fact that labs reported the biggest increase in Medicare Part B lab spending since data tracking began in 2014.

Context: As part of The Protecting Access to Medicare Act of 2014 (PAMA), Congress mandated that the OIG publicly release an annual analysis of the top 25 [lab] tests based on Medicare spending, and that it conduct analyses that OIG determines appropriate.

Count the cost: From 2020 to 2021, Part B lab test spending skyrocketed from $8.0 billion to $9.3 billion, a whopping 17 percent increase, according to the report.

COVID-19: Unsurprisingly, one big factor in the increase was COVID-19 testing, which rose from $1.5 billion in 2020 to $2.0 billion in 2021. That included antibody tests, panel tests, and high-throughput tests involving 26 procedure codes.

One code stood out as contributing $305 million to COVID testing costs in 2021; add-on code U0005 (…coronavirus 2 (sars-cov-2) (coronavirus disease [covid-19]), amplified probe technique, cdc or non-cdc, making use of high throughput technologies, completed within 2 calendar days from date of specimen collection (list separately in addition to either HCPCS code u0003 or u0004) as described by cms-2020-01-r2) that CMS introduced in 2021 to incentivize faster test turnaround times.

Genetic tests: Spending on genetic tests increased from $1.2 billion in 2020 to $1.9 billion in 2021. The OIG attributed the growth to both an increase in volume and an increase in the number of procedure codes eligible for payment, including molecular pathology tests, multianalyte algorithmic assays, genomic sequencing procedures, and proprietary lab analyses.

Chemistry tests: After a decrease in utilization in 2020 ($1.9 billion), Part B spending on chemistry tests increased to $2.1 billion in 2021, driven by an increase in volume. The OIG concludes that Medicare beneficiaries may have resumed some medical care in 2021 that had been postponed in 2020.

Resource: Review the OIG’s findings in the report at oig.hhs. gov/oei/reports/OEI-09-22-00400.pdf.

Keep Your Eyes on Enforcement Action

CMS worked with the Department of Justice (DOJ) last year to enforce compliance. “[CMS] continues to aggressively investigate fraud, waste and abuse and has taken action to protect patients, critical health care resources and to prevent losses to the Medicare Trust Fund,” said CMS Administrator Chiquita Brooks-LaSure in a statement.

Much of a 2022 Medicare fraud enforcement action from DOJ had to do with schemes involving improper laboratory testing.

Specifically, some lab owners and operators were charged with paying kickbacks and bribes to medical professionals working with fraudulent telemedicine companies in exchange for patient referrals for genetic and cardiovascular testing that was not medically necessary and was not used by the physician for patient care.

“The Department of Justice is committed to prosecuting people who abuse our health care system and exploit telemedicine technologies in fraud and bribery schemes,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division.

Bottom line: Your lab should ramp up compliance vigilance knowing that CMS and OIG oversight and DOJ prosecutions continue to have lab testing in the spotlight.