HHS OIG Finds Medicare Paid $1.7B in Suspect Clinical Lab Claims

In 2010, Medicare made at least $1.7 billion in questionable Part B payments for clinical laboratory claims that had at least one red flag, such as an ineligible physician identification number or duplicate tests, according to a report released Wednesday by the HHS Office of Inspector General, the Wall Street Journal reports.

According to the Journal, Medicare is the largest payer of clinical lab services -- such as blood counts, cholesterol screenings and urinalyses -- in the nation. In 2010, the most recent year for which HHS OIG had available data, CMS paid $8.2 billion for lab services under Medicare Part B, which also covers physician office visits and other clinician services.

Some Medicare fraud specialists note that clinical lab services are particularly susceptible to suspect billing partly because physicians order the services, rather than provide them directly, the Journal reports.

OIG Report Details

The OIG report found that more than 1,000 clinical laboratories had submitted claims with five or more measures of questionable billing in 2010.

In addition, the report noted that:

• 3.7% of billers filed claims for beneficiaries with no associated Medicare Part B service with an ordering physician, accounting for $1.18 billion in claims;
• 5.1% of billers filed claims for beneficiaries who lived more than 150 miles from the ordering physician, accounting for $324.5 million in claims;
• 11.1% of billers filed claims for duplicate tests, accounting for $234.6 million in claims; and
• At least 20.7% of billers filed claims associated with a problematic physician, lab provider or beneficiary identification number, accounting for about $210.2 million in claims.

According to the report, 43% of the labs with at least five measures of questionable billing were located in California and Florida, even though only 13% of all clinical laboratories are located in those states. The report did not list the laboratory names, but it singled out several individual examples of questionable billing practices.

CMS Administrator Marilyn Tavenner in a letter accompanying the OIG report said her agency agreed with OIG's recommendation that it order Medicare contractors to investigate labs flagged for questionable billing (Adamy, Wall Street Journal, 7/9).