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Department of Health and Human Services

Office of Inspector General -- AUDIT

Review of Clinical Laboratory Tests Performed by Independent Laboratories and Physicians, (A-01-96-00509)

November 21, 1997

Complete Text of Report is available in PDF format (1.8 MB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This final audit report points out that Medicare carriers did not always have adequate controls to detect and prevent inappropriate payment for laboratory tests. Contrary to applicable laws, regulations and local carrier reimbursement policies, carriers reimbursed providers for claims involving (1) unbundled and/or duplicate chemistry, hematology, and urinalysis tests that should have been grouped together and paid at a lesser amount, and (2) additional indices that were not ordered, received or needed by a physician. As a result, we estimate carriers overpaid independent and physician laboratories about $50.2 million for chemistry, hematology, and urinalysis tests during the period July 1, 1993 through June 30, 1995. We recommended that the Health Care Financing Administration (HCFA) direct Medicare carriers to implement procedures and controls to ensure that clinical laboratory tests are appropriately grouped together, not duplicated for payment purposes, and are actually ordered by physicians. We also recommended that HCFA consider eliminating separate reimbursement for additional indices and that overpayments be recovered. The HCFA concurred with our findings and recommendations and has agreed to take corrective action.