OIG Workplan 2009

These are some of the focus areas in the 2009 OIG Work plan that laboratories should be aware of:

Medicare Payments for Unlisted Procedure Codes
OIG will review the accuracy of Medicare payments for services billed using unlisted procedure codes. Unlisted procedure codes are not paid under the fee schedule. The Medicare contractors that process such claims suspend them for individual review and manual pricing. OIG will examine provider usage of procedure codes for services not listed in the HCPCS.

Laboratory Test Unbundling by Clinical Laboratories
OIG will review the extent to which clinical laboratories have inappropriately unbundled laboratory profile or panel tests by utilizing different dates of service to maximize Medicare payments. They will determine whether clinical laboratories have unbundled profile or panel tests by submitting claims for multiple dates of service or by drawing specimens on sequential days. They will also determine the extent to which the Medicare carriers have controls in place to detect and prevent inappropriate payments for laboratory tests.

Variation of Laboratory Pricing
OIG will review the extent of variation in laboratory test payment rates among Medicare contractors and other insurers. The Social Security Act, – 1833(h), requires the Secretary to establish a payment fee schedule for clinical diagnostic laboratory tests. In 2007, Medicare payments for laboratory services exceeded $6 billion. Prior OIG work found that Medicare had paid significantly higher prices than other payers for certain laboratory tests. OIG will analyze claims data to determine pricing variances among Medicare contractors for the most commonly performed tests.

Medicare Billings With Modifier GY
OIG will review the appropriateness of providers’ use of modifier GY on claims for services that are not covered by Medicare. CMS’s “Medicare Carriers Manual,” Pub. No. 14-3, pt. 3, – 4508.1, states that modifier GY is to be used for coding services that are statutorily excluded or do not meet the definition of a covered service. Beneficiaries are liable, either personally or through other insurance, for all charges associated with the provision of these services. Pursuant to CMS’s “Medicare Claims Processing Manual,” Pub. No. 100-04, ch. 1, – 60.1.1, providers are not required to provide beneficiaries with advance notice of charges for services that are excluded from Medicare by statute. As a result, beneficiaries may unknowingly acquire large medical bills that they are responsible for paying. In FY 2006, Medicare received over 53 million claims with a modifier GY and denied claims totaling over $400 million. The OIG will examine patterns and trends for physicians’ and suppliers’ use of modifier GY.

Separately Billable Laboratory Services Under the End Stage Renal Disease Program
OIG will review providers’ compliance with the current payment policies for automated multichannel chemistry (AMCC) tests furnished to ESRD beneficiaries. Section 623(f) of the MMA requires the Secretary to develop a report on a bundled PPS for ESRD services. A bundled PPS could include certain clinical laboratory tests that are currently separately billable to Medicare. The current facility payment, the composite rate, includes payments for certain AMCC tests provided routinely at specified frequencies. CMS’s “Medicare Benefit Policy Manual,” Pub. No. 100-02, ch. 11, – 30.2, contains the conditions for coverage and laboratory tests that are included in the composite rate. Any AMCC tests performed in excess of specified frequencies or not included in the composite rate payment are to be billed separately, provided that medical necessity is documented. CMS’s “Medicare Claims Processing Manual,” Pub. No. 100-04, ch. 16, – 40.6, outlines the billing requirements for ESRD-related laboratory tests. Prior OIG reviews found that providers were paid separately for AMCC tests included in the composite rate. To ensure that the bundled PPS rate is based on valid data, the OIG will review providers’ compliance with the current payment policies for AMCC tests furnished to ESRD beneficiaries. They will also identify separately billed clinical laboratory tests that are regularly provided to ESRD beneficiaries in addition to the clinical laboratory tests included in the composite rate.

Recovery Audit Contractors: Reducing Medicare Improper Payments
OIG will review CMS’s oversight and monitoring of recovery audit contractors (RAC) to determine whether they meet contractual requirements outlined in the RAC Task Orders. The RAC program, authorized in section 306 of the MMA, is designed to reduce Medicare improper payments through the detection and collection of overpayments, the identification of underpayments, and the implementation of actions that will prevent future improper payments.