According to a recently released report by the HHS Office of Inspector General (OIG), over 1,000 labs had unusually high billing for Medicare Part B Clinical Laboratory Services for dates of service in 2010.  Increased auditing activity for these 1,000 labs, and likely others, can be expected, as CMS concurred with the OIG’s recommendation to review the labs identified as having questionable billing and stated it would direct Zone Program Integrity Contractors (ZPICs) to follow up and investigate the identified laboratories.  Notably, however, the OIG acknowledged that some labs may have legitimate reasons for exceeding certain thresholds analyzed as part of the OIG’s study, and stated that it did not undertake to conduct a medical record review to determine whether any of the billings were inappropriate or fraudulent. 

The OIG’s findings are based on its analysis of a data set including 145.6 million lab claims submitted by 94,609 labs for 23 million beneficiaries, totaling $7.3 billion in Medicare payments.  To conduct the study, the OIG separated the claims data into two separate groups—one for larger, nationwide independent laboratories, and another for smaller, non-independent labs, such as labs located in physician offices—and then compared the claims data to a set of thirteen different measures.  The thirteen tested measures included, for example, (i) high average number of claims per beneficiary or ordering physician, (ii) high percentage of claims for beneficiaries with no associated Part B services with the ordering physician, and (iii) high percentage of claims with invalid or ineligible ordering-physician numbers.  The OIG considered a lab’s billing to be unusually high or questionable for a particular measure if the number or percentage was greater than the 75th percentile plus three times the interquartile range.  The OIG considered any lab that exceeded the thresholds for five or more of the thirteen measures of questionable billing to be an outlier.  In total, 1,032 out of the 94,609 labs exceeded at least five of the thirteen measures, and, thus, were considered outliers.

For a copy of the full report, please click here.