Despite savings on many lab tests in 2019, total Medicare spending increased slightly because of increased utilization for certain high-priced tests
- Collection:
- Health Policy and Services Research
- Series Title(s):
- Data brief
- 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, December 2020
- Language(s):
- English
- Format:
- Text
- Subject(s):
- Diagnostic Techniques and Procedures -- economics Genetic Testing -- economics Government Regulation Medicare -- economics United States United States. Department of Health and Human Services
- Genre(s):
- Technical Report
- Abstract:
- Why OIG Did This Review. PAMA changed the way the Medicare program sets payment rates for lab tests by aligning Medicare payment rates with private payment rates. Prior to PAMA, the Office of Inspector General (OIG) found that Medicare was paying significantly more than other payers for many lab tests. The Centers for Medicare & Medicaid Services (CMS) calculated new rates that took effect in 2018. As part of PAMA, Congress also mandated that OIG publicly release an annual analysis of the top 25 tests based on Medicare spending and conduct analyses that OIG determines appropriate. This data brief provides an analysis of Medicare payments for lab tests in 2019, the second year of the new payment system. How OIG Did This Review. We analyzed claims data for lab tests performed in 2019 that CMS paid for under the CLFS. 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 identified the top 25 lab tests based on Medicare spending for tests performed in 2019. We also identified key statistics and emerging trends, including Medicare spending by procedure code and test category. What OIG Found. Medicare Part B spent $7.68 billion on lab tests in 2019, a $93 million increase from 2018. For the top 25 tests by Medicare spending, expenditures also increased slightly, to $4.64 billion, up from $4.57 billion in 2018. Analysis of these top 25 tests illustrates 2 trends that led to these spending outcomes. First, for the group of 17 tests (among the top 25) that had payment rate reductions, overall Medicare spending decreased in 2019. Most of these tests had the maximum 10-percent payment rate reduction allowed by the Protecting Access to Medicare Act of 2014 (PAMA). Despite increased utilization for some of these tests, overall Medicare spending decreased by $175 million for the group compared to 2018, demonstrating that—as expected—the PAMA requirements achieved savings for the Medicare program. Second, for the group of eight tests with payment rates that did not change, overall Medicare spending increased in 2019 because of increases in utilization for many of these tests. Payment rates for these tests did not change for one of two reasons: (1) tests with payment rates that had already reached the rate required by PAMA did not require further reductions in 2019, or (2) tests that were new to the Clinical Laboratory Fee Schedule (CLFS) as of 2018 were not affected by PAMA rate reductions.
- Copyright:
- The National Library of Medicine believes this item to be in the public domain. (More information)
- Extent:
- 1 online resource (1 PDF file (11 pages))
- Illustrations:
- Illustrations
- NLM Unique ID:
- 9918283580606676 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/9918283580606676