Medicare Threw 157 Labs Out of the Program and Blocked $1.6 Billion in Billing

Medicare announced on August 28 that it blocked $1.6 billion in laboratory billing it identified as potentially fraudulent. Part of that money was for tests on patients the labs had never seen.

Where the $1.6 Billion Breaks Down

CMS revoked 157 laboratory providers from the program, accounting for $732 million. It issued 185 payment suspensions covering roughly $500 million, after investigating 600 labs.

It recovered $276 million across 442 overpayments already paid out, and referred 85 cases to law enforcement covering another $127 million.

What the Labs Were Billing For

The schemes ran across pathogen detection panels, high complexity drug testing and genetic testing. CMS describes four patterns.

Labs billed for medically unnecessary services where no established relationship existed between the provider and the beneficiary. They billed for services never rendered. They up-coded services to a higher paying category. And they submitted claims that were fraudulent outright.

Why a Beneficiary Would Never Notice

In most of these patterns nothing happens to the patient. No one calls, no sample is taken, and no result arrives. The only trace is a line on a statement most people never open.

CMS Administrator Dr. Mehmet Oz said that when laboratories bill Medicare for tests they never performed, it drains the Medicare Trust Fund. That is the program level cost. At the individual level, the cost is that a beneficiary’s number was used without their knowledge.

The One Thing Worth Doing Tonight

Medicare Summary Notices and MyMedicare accounts list every service billed under a beneficiary’s number. A lab test that appears there without a matching doctor visit or sample is worth a call to 1-800-MEDICARE.

CMS did not say how many beneficiaries had their numbers used, and that figure has not been released.

The enforcement actions announced on August 28 are complete, and the $1.6 billion is money the program will not pay out. Whether a particular statement carries a test that never happened is something only the person holding it can check.

References: CMS Prevents $1.6 Billion in Fraudulent Medicare Laboratory Payments