ACLA Responds to OIG Report on Clinical Labs Billing Practices: Lab Industry Committed to Appropriate Use, Cautions Report's Methodologies Are Questionable

WASHINGTON, July 9, 2014 /PRNewswire-USNewswire/ -- In response to the Department of Health and Human Services Office of Inspector General report released today on Questionable Billing for Medicare Part B Clinical Laboratory Services, the American Clinical Laboratory Association (ACLA) reiterated its commitment to appropriate utilization of laboratory services, which includes preventing fraudulent or abusive billing practices, but cautioned the report's methodology does not present a clear picture of industry billing practices.

"It is critical that providers of clinical services across the healthcare sector remain committed to appropriate utilization and prevent fraudulent or abusive billing practices," said Alan Mertz, President of the ACLA.  "That said, the methodology used in the OIG report on questionable billing practices must be further examined to ensure a clear picture is presented and accurate conclusions are reached."

The OIG report reviewed 94,609 labs and found that 1,032 labs had "exceeded the thresholds for at least 5 of 13 measures of questionable billing."  The vast majority of these labs were not independent laboratories.   The report also claims that "…In 2010, Medicare allowed $1.7 billion for questionable claims across all labs."

Mertz went on to note the report's own admission that a number of its 13 "metrics" could represent completely legitimate and clinically appropriate utilization of clinical laboratory services, a fact that must not be lost and has to be considered in the report's final analysis of potential "questionable" billing practices within the clinical lab industry before jumping to conclusions about actual fraud.

"While lab services represent less than two percent of Medicare spending as noted in the OIG report, it remains important that clinical labs take seriously their responsibility as stewards of taxpayer dollars used to cover the expense of caring for Medicare beneficiaries," said Mertz.  "It is just as important when studies are released that are aimed at identifying questionable, fraudulent and even criminal activity with regard to Medicare billing, that they utilize appropriate methodologies and include all information necessary to provide a clear picture for policymakers and taxpayers alike."

Mertz expressed concern with the OIG measure that billing is "questionable" if there was no physician office visit in the 6 months prior to the lab service ordered.  This measure accounted for more than two thirds of the $1.7 billion the OIG identifies as "questionable."

In many cases lab testing is ordered the same day as a physician visit, or in anticipation of a physician office visit, such as an annual check-up.  Furthermore, for patients with chronic conditions such as diabetes, lab tests are part of routine monitoring and not always associated with a physician visit. 

The lab services utilized most in Medicare are routine monitoring services that are critical to keeping patients healthy.  The top ten lab services by Medicare spending or volume include the diagnostics that measure blood sugar control for diabetes, the tests that monitor kidney, liver and thyroid function, the tests that identify anemia and infections, and the tests that keep patients stable on blood thinners to avoid strokes and heart attacks.  Lab services help keep patients healthy and avoid more costly Medicare services, such as hospital visits.

Mertz also raised concerns about the OIG suggesting questionable billing for 5.3 million claims where the beneficiary's mailing address was more than 150 miles from the ordering physician.     In fact, in 2009, there were 214 million Medicare lab claims, thus, 5.3 million claims represents just 2.5% of the lab bills.   Given the large numbers of Medicare beneficiaries who travel, spend winters in warmer climates, visit family and friends, and seek out specialists and centers of excellence away from home, this figure is not surprising nor does it necessarily suggest "questionable billing" by laboratories.

Finally, Mertz noted that the OIG included in the questionable billing figures from 2010 almost $100 million for claims with ineligible or invalid physician numbers.  However, as CMS pointed out in their response to the report, regulations were issued as part of the Affordable Care Act which require the ordering providers' valid number, and beginning in January of 2014 is denying claims for lab services that don't meet these requirements.

"Clinical laboratory testing guides 70 percent of physician decision-making by facilitating the early detection of chronic and often life threatening diseases. Lab researchers and clinicians across the country are game changers in the ability of physicians to provide quality care and effective treatments to patients," said Mertz. "ACLA stands ready to work with OIG, the Centers for Medicare and Medicaid Services and Congress to enforce the practice of accurate Medicare billing and to ensure access to critical lab services for Medicare beneficiaries."

The ACLA is a not-for-profit association representing the nation's leading national, regional and esoteric clinical laboratories on key issues of common concern, including federal and state government reimbursement and regulatory policies. 

SOURCE American Clinical Laboratory Association