Total Medicare spending for lab tests performed in 2015 was $7
billion, the same amount as in 2014.
Total Medicare spending for the top 25 lab tests performed in
2015 was $4.1 billion, slightly less than the $4.2 billion spent in
Payments for drug tests (which test for the presence or level
of drugs in a person's body) – increased significantly
from $910 million in 2014 to $1.1 billion in 2015 (a 19 percent
increase). Similarly, drug tests comprised a larger share of the
top 25 lab tests performed in 2015 (six tests) as compared with
2014 (four tests). OIG believes the increase in payment for and
prevalence of drug tests may reflect efforts to monitor the growing
prescription drug abuse epidemic. It notes that while the increase
in drug testing may be legitimate, it may also signal medically
unnecessary drug testing.
Payments for molecular pathology tests (which analyze genetic
material) – decreased significantly from $466 million in 2014
to $259 million in 2015 (a 44 percent decrease). OIG concludes
that this decrease is the result of efforts by CMS, among others,
to prevent medically unnecessary testing.
Issuance of the Final Rule and Related Guidance
Documents: OIG found this task "largely
completed." The final rule was issued in June 2016, and
guidance from CMS is forthcoming.
Establishment and Consultation with the Advisory
Panel: OIG found this task to be "completed."
The Advisory Panel was established in 2015, and it continues to
meet and provide recommendations to CMS.
Collection of Private Payer Data Reported by Applicable
Labs: OIG found that CMS has made "significant
progress" toward this task, noting that CMS has built the
system that labs will use to report data beginning in early
Ensuring the Completeness and Accuracy of Data
Reports: OIG found this task to be "in
progress," noting that CMS has developed preliminary plans to
conduct checks for data completeness and accuracy. However, OIG
emphasizes that while CMS has some safeguards in place to mitigate
incomplete or inaccurate reporting, it does not plan to
independently verify labs' data, which may result in inaccurate
Medicare payment rates for lab tests.
Determining and Publishing New Medicare Payment
Rates: OIG found this task to be "in progress,"
noting that CMS has begun to plan how it will determine and publish
new payment rates once labs start submitting data in early
Identifying Advanced Diagnostic Laboratory Tests
(ADLTs): OIG found this task to be "in
progress," noting that while PAMA created this new category of
tests, CMS plans to release supplementary guidance in late 2016.OIG
will continue to monitor CMS' implementation of the new payment
system required by PAMA, as well as its effects on Medicare
OIG will continue to monitor CMS' implementation of the new
payment system required by PAMA, as well as its effects on Medicare
This article is presented for informational purposes only
and is not intended to constitute legal advice.
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