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HHS OIG Finds Sharp Rise in Medicare Payments for Genetic Tests

NEW YORK – An analysis by the US Department of Health and Human Services' Office of the Inspector General has found a sharp uptick in payments made by Medicare Part B for genetic tests and the number of genetic tests performed, raising concerns about excessive ordering of such tests by providers and possible fraud.

The analysis also found similar significant increases in the number of laboratories that received more than $1 million per year in payments from Medicare Part B for performing genetic tests, and the number of ordering providers for genetic tests, HHS OIG said.

Medicare Part B covers medical services such as doctors' services, outpatient care, and durable medical equipment.

"The information in this data brief may help CMS and other stakeholders to identify changes in the Medicare program that could prevent fraud, waste, and abuse, and protect Medicare beneficiaries," HHS OIG said in its data brief released on Tuesday.

Among the key findings of the analysis are that Medicare payments for genetic tests performed by labs quadrupled between 2016 and 2019 from $351 million to $1.41 billion; the number of genetic testing procedure codes covered by Medicare increased during that time frame to 310 from 119, a 161 percent rise; the number of genetic tests Medicare paid labs for grew to 2.1 million tests in 2019 from 627,000 in 2016, a 235 percent increase; and the average amount paid by Medicare per beneficiary who received at least one genetic test grew from $889 in 2016 to $1,559 in 2019, a 75 percent increase.

Also, HHS OIG found that between 2016 and 2019, the number of labs that received more than $1 million in Medicare payments per year for genetic tests rose from 26 to 72.

Meanwhile, 153,000 providers ordered genetic tests in 2019, up from 73,000 in 2016.

The data brief noted that fraud in genetic testing is "prevalent" and is a situation that has been exacerbated by the COVID-19 pandemic. For example, labs can add on non-COVID-19 tests, such as genetic tests, to tests for the coronavirus to try to get additional reimbursements, HHS OIG said.

"The information in this data brief may help CMS and other stakeholders to identify changes in the Medicare program, such as increased oversight, that could prevent fraud, waste, and abuse and protect Medicare beneficiaries," HHS OIG said in the data brief.

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