Medicare keeps spending more on COVID-19 testing
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As the COVID-19 pandemic continues to churn, Medicare spending on testing for the virus continued to increase in 2022 and was outpacing the two prior years.
Through
That compares to
Fraud and overspending are contributing to the increases, experts say, because federal money for COVID-19 testing is not subject to some of the same financial and regulatory constraints as other tests covered by Medicare, the government insurance program for people 65 and older and the disabled.
The growing costs concern some of these experts, who say the need for financial incentives to expand the availability of testing has passed.
Early in the pandemic, testing was both critical to slowing the spread of the virus and in short supply. So the federal government enacted measures to make it more profitable to get in the COVID-19 testing business. Good for the duration of the public health emergency, which has not yet expired, the measures include a generous Medicare reimbursement rate, requirements for private insurance to cover testing — even compelling insurance plans to pay whatever cash price is demanded by out-of-network labs — and a hefty fund for testing those people who didn't have insurance.
The measures succeeded in drawing new and existing labs into the COVID-19 business and helped ensure most people had access to testing, even if some faced excessive waits to get their results. But the incentives also attracted price-gougers, fraudsters and people with no experience in the laboratory business. The result was a chaotic approach that ranged from bungled testing programs and confusion over new requirements to outright fraud.
"It was an unprecedented wave of fraud," said
ProPublica detailed how one
The company submitted 600 pages of documentation to state regulators to support its claim that it fixed deficiencies noted by inspectors, but it ultimately asked the state to close its license and pulled out of
The OIG, which had been investigating Northshore in
Cohen said OIG investigators have faced challenges responding to the onslaught of suspected fraud — from a lack of additional resources to constantly evolving policies.
In April, the
Attorneys general in a handful of states have taken action against labs for forging results, charging fees for "expedited results" that arrived days later and deceptive marketing practices.
Programs to pay for COVID-19 testing aren't the only pandemic assistance funds that have attracted people seeking to profit. Paycheck Protection Program loans went to fake businesses or were spent on luxury goods instead of keeping people employed, ProPublica and other news outlets have reported. Expanded state unemployment programs also saw unprecedented fraud that a partial accounting estimates is
Tolerating some fraud is a necessary trade-off to attain legitimate public policy goals, said
"We were in a very different world in
According to the data provided by CareSet, more than 2,300 new labs have enrolled as Medicare providers since the pandemic began and have been billing for COVID-19 testing, evidence of the increased capacity generated by the federal measures.
Total Medicare spending on COVID-19 testing is a small fraction of the
Still, testing — as funded by Medicare, private insurance and other federal assistance programs — was a lucrative corner of the pandemic response for many providers.
Labs with troubled operations reaped millions from Medicare, the CareSet data shows.
Northshore Clinical, for example, submitted
"During the pandemic, Curative provided millions of Americans with a safe, accessible and reliable way to test for the virus, including when it was extremely difficult to obtain a COVID-19 test," a Curative spokesperson said. "Our teams deployed tests in an efficient manner, helping to prevent the spread of outbreaks in communities across the state of
The spokesperson also pointed to a
"
Walker said Nomi continues to provide free tests for uninsured individuals despite the end of the federal program that paid for those tests. "We still feel strongly that open and easy access is an important part of keeping our communities safe and helping to drive our economy forward."
The OIG's Cohen said the most common crime investigated by his agency was identity theft. Nefarious labs would snag Medicare beneficiaries' information and use it to bill for services not provided or expensive and unnecessary add-on tests.
"They would take it all. 'We need your Medicare number. We need your
Medicare wasn't the only government program targeted for laboratory fraud.
Health care providers found quick access to money in the federal fund for testing people without insurance. The program, run by another federal agency, the
The program was initially funded by
An HHS official said safeguards against fraud were put in place and any providers caught abusing the program could be subject to enforcement measures.
"The COVID-19 Uninsured Program was designed to ensure that every person in
As the pandemic has evolved, how people test for the virus has changed too. Now, instead of getting lab tests, many patients opt to use at-home rapid tests. And that has opened up another opportunity for fraud, experts say.
While the public health emergency is underway, Medicare is covering up to eight over-the-counter COVID-19 tests per member each month. Some providers are trying to design "subscription" services in which they mail eight tests every month whether the beneficiary needs them or not, Cohen said.
Indeed, the CareSet data shows a dramatic shift in spending for over-the-counter tests and away from PCR laboratory tests beginning in April.
And as investigators try to stay atop new scams, they're busy investigating the old ones.
"We are still finding entities that defrauded us of just enormous amounts of money," Cohen said.
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