OIG to Focus Audits on COVID Add-On Payments

May 25, 2022

By: Dyana Williams, Client Manager

Lighthouse Laboratory Services has been raising awareness about the risk of fraud and abuse within the lab industry for months as newly developed labs began addressing the need for COVID-19 Clinical Diagnostic Laboratory Tests (CDLTs).

This month, the OIG (Office of Inspector General) published an update to their annual work plan, which is indicative of how serious the government is taking these risks. The OIG has announced its intention to audit add-on payments for high-throughput technology made by Medicare for COVID-19 CDLTs. These audits are expected to begin in 2023. They will review providers’ supporting documentation for the COVID-19 CDLT add-on payments to determine whether the documentation complied with Medicare requirements.

In January 2021, CMS amended a previous ruling to incentivize laboratories to support faster (“high throughput”) COVID-19 diagnostic testing. They did this by lowering the base payment Medicare would allow for such testing from $100 to $75 and establishing a $25 add-on reimbursement amount (via CPT code U0005) for labs that completed the majority (51% or greater) of such testing within two (2) calendar days for the month in question.

In short, labs that complete most of their COVID-19 CDLTs within two calendar days or less on high throughput technology for any given month are now reimbursed $100 per test from Medicare. Labs unable to meet those requirements instead receive $75 per test. It has ultimately been the lab’s responsibility to track and bill for this add-on payment in a compliant manner.

The OIG is the nation’s largest resource fighting against fraud, waste and abuse within Department of Health and Human Services (HHS) programs that include Medicare and Medicaid. Each month, they publish updates to their annual work plan which reflect their priorities concerning emerging issues and areas of risk within healthcare.

Lighthouse will continue to monitor this situation and provide applicable updates as audits progress.

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