OIG: Medicare improperly paid $66.3 million for specimen validity tests

An audit of Medicare Part B payments from 2014 through 2016 revealed that CMS improperly paid providers more than $66.3 million for specimen validity tests billed in combination with urine drug tests, according to a report by the OIG.

Specimen validity testing analyzes urine for evidence of tampering by examining urinary pH and specific gravity. It is rare for one beneficiary to require a medically necessary specimen validity test on the same day as a urine drug test. A specimen validity test may be medically necessary if it is used to diagnose conditions such as urinary tract infections or kidney stones. However, using such a test to determine whether urine was tampered with is unrelated to clinical diagnoses and therefore is not separately billable.

The improper payments were the result of providers’ failure to follow Medicare guidance for billing the tests as well as CMS’ systems failing to adequately identify instances when the two tests were billed together. In April 2016, near the end of the audit period, CMS implemented new controls to prevent this type of improper payment. However, CMS systems still processed $1.8 million in payments for specimen validity tests billed in combination with urine drug tests from April through December 2016.

The OIG recommends that CMS recover the $66.3 million in improper payments and strengthen its internal controls. CMS agreed with both recommendations and requested that the OIG provide the agency with the data it needs to follow-up on the status of improper payments.