Follow-Up Audit of Medicare Clinical Laboratory Tests Performed by Independent Clinical and Physician Laboratories

EXECUTIVE SUMMARY:

A prior audit showed that Medicare carriers overpaid independent clinical and physician laboratories about $50.2 million for chemistry, hematology, and urinalysis tests during the 2-year period ended June 30, 1995. Our follow-up audit showed that while significant improvements have occurred (overpayments decreased to about $31.2 million for such tests for the 2 '-year period ended December 31, 1997), certain carriers still did not have adequate procedures and controls (including edits) to detect and prevent inappropriate payment for laboratory tests. In addition to financial adjustments, we recommended that the Health Care Financing Administration (HCFA) ensure carriers implement controls adequate to preclude such overpayments. The HCFA concurred with our recommendations.

---