OIG IDs $216M in Possible Medicare Drug Testing Overpayments; CMS Rejects Claw Back

CMS agrees that enhanced oversight is needed, but says OIG audit 'does not constitute credible information of overpayments.'

Federal watchdogs are recommending that the Centers for Medicare & Medicaid Services claw back as much as $216 million for noncompliant definitive drug testing paid to at-risk Medicare providers.

The Department of Health and Human Services’ Office of the Inspector General audited $3 billion in Medicare Part B payments between 2016 and 2020 and found that CMS had paid $704 million over that period for definitive drug testing services made to more than 5,200 providers.

The audit found that 1,026 at-risk providers in the five-year period routinely billed for a definitive drug testing service with the highest reimbursement amount (procedure code G0483) more than 75% of the time, compared with 4,227 "other providers" who "did not routinely bill this service."

"We determined that presumptive drug testing preceded most definitive drug testing services billed by both the at-risk and other providers," OIG says. "However, the at-risk providers may not have always used presumptive testing to determine the number of drug classes that needed to be tested using definitive drug testing, because they routinely billed for testing 22 or more drug classes using G0483 and the other providers did not."

The up-coded billings from at-risk providers occurred even though their patient mix and testing frequency were not significantly different from that of other providers, OIG says.

"This suggests that the at-risk providers may have been able to bill for definitive drug testing services using primarily procedure codes with lower reimbursement amounts, as the other providers did," OIG says. "If CMS's program safeguards had focused on at-risk payments to at-risk providers for procedure code G0483, Medicare could have saved up to $215.8 million for our audit period."

CMS Responds

While CMS has agreed with OIG’s recommendations for enhanced oversight, the agency disagreed with suggestions that it seek refunds from providers.

"This audit does not constitute credible information of overpayments because no overpayments were identified," CMS Administrator Chiquita Brooks-LaSure writes in a response to the audit. "Therefore, this audit is not sufficient basis upon which CMS can support a 60-day rule notice to identified providers."  

Brooks-LaSure notes that OIG "classified providers as ‘at risk’ for improper payment only due to the frequency at which they billed this code and the amount of Medicare reimbursement they received during the audit period. This analysis alone does not provide findings of improper payment, which would have required medical review."

Instead of using agency resources to track down overpayments from providers with no assurances of collections, Brooks-LaSure says CMS will instead "send a comparative billing report to those providers that IOG identified, alerting them to the fact that their billing is an outlier compared to their peers."