OIG continues crackdown on genetic testing fraud as Medicare spending spikes

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, OIG continues crackdown on genetic testing fraud as Medicare spending spikes

Consistent with rising Medicare spending on genetic testing, the US Division of Well being and Human Providers’ Workplace of Inspector Basic can be monitoring will increase in fraudulent billing practices. 

The OIG reported in August that spending by the Facilities for Medicare & Medicaid Providers on laboratory testing elevated 6 p.c in 2018 to $7.6 billion in comparison with $7.1 billion in 2017, regardless of price reductions stipulated below the Defending Entry to Medicare Act. Whereas cost charges decreased for 75 p.c of lab exams from 2017 to 2018, spending on genetic exams doubled yr over yr to roughly $1 billion. Though 2018 had the biggest lab check spending improve for CMS for the reason that passage of PAMA in 2014, among the spending will increase had been the results of adjustments in check volumes and the transfer to a nationwide charge schedule, OIG stated.

In the meantime, OIG attributed spending will increase for genetic exams – which comprised 13 p.c of Medicare spending on lab exams in 2018 in comparison with 7 p.c in 2017 – to new and costly exams getting into the charge schedule and larger utilization.

Elevated spending and utilization factors to the necessity for larger oversight of genetic testing utilization, OIG stated in its report, as a result of “even a small variety of inappropriate exams may expose Medicare to extraordinarily excessive spending.” 

Widespread fraud additionally accounts for at the very least a portion of the upper spending seen within the genetic testing sector.

In line with Mike Cohen, an operations officer at OIG’s workplace of investigations, fraud within the genetic testing house has been escalating since 2013, starting within the pharmacogenetics house and most cancers screening as a result of the funds are larger and “criminals are likely to migrate towards the very best space of reimbursement.”

Final yr, a laboratory proprietor in Pennsylvania was charged with fraud after allegedly paying kickbacks to entrepreneurs to accumulate samples from Medicare sufferers throughout the US and to a telemedicine firm that paid medical doctors for writing corresponding prescriptions wanted to invoice Medicare for most cancers genomic testing and pharmacogenetic testing. The lab proprietor allegedly paid physicians to authorize genetic testing with out conducting correct telemedicine visits, and people physicians weren’t certified to interpret the outcomes and didn’t use the outcomes to deal with the Medicare sufferers.

Genetic testing has been an space of elevated focus at OIG over the previous few years because the genetic testing trade has expanded and coding and cost frameworks have advanced. When new analyte- and procedure-specific codes went into impact for molecular diagnostic exams in 2013, OIG had a clearer view of not solely which exams had been being ordered extra and paid for at larger charges, it may additionally extra precisely monitor fraudulent billing practices.

One frequent type of fraud in genetic testing that Cohen famous includes hiring recruiting corporations to assemble giant numbers of sufferers through well being festivals and social media after which having medical doctors use telehealth to log out on testing with out truly inspecting sufferers or following up with them about their check outcomes. Fraudsters have additionally “descended upon assisted residing areas,” Cohen stated, going “door to door soliciting sufferers,” testing them, and submitting claims no matter whether or not the testing met CMS’ medical necessity standards. “They may swab tons of and tons of of individuals whether or not they wanted the check or not after which exit and seek for what check they wish to invoice for that,” he continued. Cohen even famous that one scheme concerned entrepreneurs going to an assisted residing residence’s bingo evening and taking sufferers out to be swabbed.

OIG introduced in September 2019 that it will be cracking down on genetic testing fraud and lots of of those schemes had been picked up in a joint operation final yr between OIG, the US Division of Justice, and the Federal Bureau of Investigation. The operation ended up charging 35 individuals with allegedly billing $2.1 billion for pointless most cancers genetic exams.

Not all the elevated spending within the genetic testing house are essentially fraudulent, Cohen defined. “It is a mixture of reputable care together with fraud,” he stated. It is also not simply prevalent in genetic testing. In all areas of healthcare, fraud “weaves out and in of reputable care. … The truth is, the extra they’ll disguise contained in the reputable care, the simpler it’s for them to function.”

Differentiating between reputable and fraudulent billing and deciding when to take enforcement motion can usually be difficult for CMS, Cohen stated, as a result of the company does not wish to “impinge upon [tests with] reputable medical necessity.” CMS has “a decent rope to stroll,” he acknowledged.

Since CMS does not wish to shut down reputable genetic testing that sufferers really want, it might even be simpler for fraud schemes to slide by means of the cracks.

These fraud schemes permeate extra areas than most cancers genetic screening and pharmacogenomic testing. Cohen stated he is additionally seen unlawful testing schemes wherein aged individuals have been examined for noninvasive prenatal testing supposed for pregnant girls, in addition to genetic testing for illnesses outstanding in particular teams in sufferers exterior of these teams. 

A part of the problem with catching these dangerous actors, nevertheless, is that their fraudulent exercise is usually reliant on a posh internet unfold throughout a number of states. Many labs will see sufferers throughout a number of states and submit claims in states the laboratory is not primarily based in to keep away from scrutiny. Some labs even attempt to register in sure areas the place they really feel they may get extra favorable reimbursement, Cohen stated.

A latest evaluation of state billing and cost patterns counsel that jurisdictions coated by Medicare Administrative Contractors Novitas and First Coast Service Choices, that are collectively held by Guidewell, a subsidiary of Florida Blue Cross, could also be significantly worthwhile reimbursement jurisdictions for sure forms of genetic exams. Novitas covers Arkansas, Colorado, Louisiana, Mississippi, New Mexico, Oklahoma, and Texas, whereas First Coast covers Florida. 

In an evaluation of 2018 Medicare claims information by reimbursement professional Bruce Quinn and revealed on his weblog, two CPT codes for genetic testing coated by Medicare noticed important overpayments in jurisdictions coated by these two MACs. These codes had been 81408, a nonspecific code for genetic testing that’s primarily used for genes related to uncommon illnesses, and 81162 for evaluation of BRCA1/2 genes. 81408 — a degree 9, tier two molecular pathology CPT code that describes evaluation of greater than 50 exons in a single gene by DNA sequence evaluation — is not payable on the 5 different MACs or at many industrial payors, equivalent to Aetna, Quinn stated. 

These two codes which have seen “explosive development” since 2018 are significantly ripe for exploitation, Quinn stated. Code 81162 for BRCA1/2 testing is “nicely acknowledged” and certain would not spark investigation since it’s a frequent code possible assumed to be medically vital in sufferers with breast most cancers. “In case you have that code and you place down a prognosis of breast most cancers, that code can pay,” Quinn stated.

Cohen additionally famous that usually fashionable exams and codes are simpler for fraudsters to govern, since if it is a code nobody’s utilizing they’d “stick out like a sore thumb.”

In the meantime, CPT code 81408 has no edits below Novitas and First Coast, permitting for auto-payment of the code. If a code has no edits, the MAC does not must overview the declare earlier than reimbursing for the declare, which Quinn in comparison with “swiping a bank card and it robotically pays.”

Twenty p.c of all funds from the MACs, roughly $290 million, had been for CPT code 81408 in 2019, Quinn stated, and about $120 million was paid for code 81162.

Within the information Quinn compiled, lots of the laboratories submitting claims for CPT code 81408 below the 2 MACs had no internet presence and had been “pop-up labs” that disappeared the following yr, he stated. “Each lab you would see doing 81408 regarded suspicious and none of them had been any of the main labs,” he continued.

Quinn often conducts this sort of evaluation and publishes them on his weblog aiming to make clear Medicare spending patterns on genetic exams. Earlier this yr, certainly one of Quinn’s investigations into inappropriate billing exercise primarily based on doc procured from CMS through the Freedom of Info Act garnered a cease-and-desist letter from Palmetto. The incident raised questions concerning the extent to which a authorities contractor can legally prohibit public entry to info obtained below FOIA, in addition to to details about how the federal government disburses taxpayer funds. 

CMS, in the meantime, has made some efforts to curtail billing abuse within the genetic testing house because it has change into extra of a difficulty, with the company’s Facilities for Program Integrity constantly conducting medical billing critiques and audits. The company’s Unified Program Integrity Contractors particularly monitor genetic testing codes for spikes in extreme billing and sufferers who obtain a number of genetic exams. 

In 2019, a CMS overview discovered “a excessive degree [of] claims” inside the MolDx program, however the excessive variety of claims have since tapered off in 2020, and there have been decreases in funds for CPT codes 81408 and 81162 inside Novitas and First Coast. Nonetheless, billing “continues to be occurring in a way the place there are nonetheless some issues in instances that embody billing for a number of molecular diagnostic exams and billing with out demonstrating medical necessity, particularly molecular pathology degree 9” codes, a CMS spokesperson stated. Stage 9 codes, which have the very best billing charges, symbolize a 3rd of claims for all genetic testing to date this yr.

Finally, Quinn stated, there must be stronger controls carried out to detect fraud when it is taking place, or on the newest, inside just a few months, fairly than having to attend years for billing information to find out areas of curiosity. “CMS ought to have primary controls to select up sudden explosions in genetic code use inside a pair months, not a pair years,” he stated.

This story first appeared in our sister publication 360Dx, which gives in-depth protection of in vitro diagnostics and the scientific lab market.


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