Medicare laboratory test expenditures increased in 2018, despite new rate reductions
- Collection:
- Health Policy and Services Research
- Series Title(s):
- Report in brief (United States. Department of Health and Human Services. Office of Inspector General)
- Contributor(s):
- United States. Department of Health and Human Services. Office of Inspector General. Office of Evaluation and Inspections. issuing body.
- Publication:
- [Washington, D.C.] : U.S. Department of Health and Human Services, Office of Inspector General, August 2020
- Language(s):
- English
- Format:
- Text
- Subject(s):
- Clinical Laboratory Services -- economics Government Regulation Medicare Part B -- organization & administration United States United States. Department of Health and Human Services
- Genre(s):
- Technical Report
- Abstract:
- Why OIG Did This Review. Effective in 2018, the Medicare program changed the way it sets payment rates for lab tests. CMS replaced the previous payment rates with new rates based on payments made by private insurers. This is the first reform in 3 decades to Medicare’s payment system for lab tests. As part of the same legislation reforming Medicare’s payment system, Congress mandated that the Office of Inspector General (OIG) monitor Medicare payments for lab tests and the implementation and effect of the new payment system for those tests. This report also provides the fifth annual analysis of the top 25 lab tests by Medicare spending. How OIG Did This Review. We analyzed claims data for lab tests that CMS paid for under the Medicare CLFS in 2018. These tests are covered under Medicare Part B and do not include tests that Medicare paid for under other payment systems, such as the payment system for critical access hospitals or the Hospital Outpatient Prospective Payment System. We examined Medicare Part B spending for lab tests in 2018 as compared to 2017 and identified key factors that contributed to increased spending. We identified notable changes to test payment rates and categories and examined factors that affected Medicare spending in certain geographic areas of the lab test marketplace. Additionally, we identified the top 25 tests based on total spending in 2018 for each lab test procedure code. What OIG Found. Total Medicare spending for clinical diagnostic laboratory (lab) tests increased in 2018, despite lower payment rates for most tests. Medicare spent $7.6 billion for lab tests in 2018, a $459 million increase from $7.1 billion in 2017. Although payment rates for 75 percent of tests decreased in 2018 under the new payment system, savings that resulted from lower rates were overtaken by increased spending on other tests, including genetic tests and certain chemistry tests. Spending on genetic tests increased from $473 million in 2017 to $969 million in 2018 because of new and expensive tests entering the Clinical Laboratory Fee Schedule (CLFS), as well as an increase in the volume of existing genetic tests. Spending on certain chemistry tests also increased by $82 million in 2018 following the end of a discount on these tests. Finally, a one-time spending increase on some tests occurred in cases in which the national rate was higher than the local payment rates that it replaced.
- Copyright:
- The National Library of Medicine believes this item to be in the public domain. (More information)
- Extent:
- 1 online resource (1 PDF file (22 pages))
- Illustrations:
- Illustrations
- NLM Unique ID:
- 9918282381306676 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/9918282381306676