Preventing Genetic Testing Fraud: 5 Actions for Health Plans

The following is a guest article by Erin Rutzler, Vice President of Fraud, Waste, and Abuse at Cotiviti

In Delaware, more than 250 Medicare patients underwent unnecessary genetic testing based on telehealth consultations that often lasted less than two minutes—costing Medicare thousands of dollars per patient. Meanwhile, an emerging scheme for fraudulent and unnecessary cardiovascular and cancer genetic testing allegedly resulted in $174 million in false and fraudulent Medicare claims.

These are just two examples of what the Healthcare Fraud Prevention Partnership describes as a surge in fraud, waste and abuse associated with genetic testing claims. Such scenarios demand vigilance from health plans and new approaches to preventing inappropriate billing before it starts.

Genetic Testing Schemes Put Dollars and Health at Risk

Globally, the genetic testing market is expected to reach $17.6 billion by 2026, driven in part by direct-to-consumer testing for health risks such as breast cancer and physician orders for prenatal testing, tumor molecular profiling and sequencing to diagnose rare disease. In this environment, “hybrid labs”—those that perform both direct-to-consumer genetic testing and traditional, medical-grade testing—are proliferating.

Now, as new genetic tests unlock advancements that can improve health and well-being—even for those suffering from the rarest of genetic conditions—the risk for fraud, waste and abuse in genetic testing is high. In 2021, a U.S. Department of Health and Human Services (HHS) analysis showed Medicare payments for genetic testing quadrupled from 2016 to 2019. During the same time period, genetic testing procedure codes covered by Medicare rose 161 percent, the number of genetic tests paid for by Medicare leapt 230 percent, and the number of providers ordering genetic tests for Medicare beneficiaries more than doubled, according to HHS.

The surge in genetic testing claims comes with a rise in fraud, waste and abuse across government and commercial payers. Common schemes include:

  • Code stacking. This occurs when multiple CPT codes are used to delineate different phases in the genetic testing process—a process often rife with error. Codes most commonly associated with fraud, waste and abuse include Tier 2 codes 81403–81408, which are used to report procedures not listed in the Tier 1 molecular pathology codes, and CPT code 81479, or “unlisted molecular pathology.” In 2022, a review by Cotiviti’s special investigations unit detected $400,000 in suspicious stacked billing behavior over three years for one client. A similar review conducted for three additional clients uncovered suspected instances of stacked billing for each organization.
  • Medically unnecessary testing. In addition to expensive genetic tests for cardiovascular diseases and cancer, unnecessary prenatal testing—or genetic tests that are not tailored to the woman’s needs or risk factors—is also a common culprit. So are scenarios where individuals who seek COVID-19 testing are also persuaded to submit to a cheek swab for genetic tests related to Parkinson’s disease, Alzheimer’s disease, diabetes, obesity, dementia and more.
  • A “catchall” code used to bypass claim edits. Modifier 59 enables providers and laboratories to identify procedures and services outside of evaluation-and-management services that are not typically reported together, but apply to the patient’s unique circumstances. This modifier should only be used when any other modifier is not specific or appropriate enough to depict the reason for the service or procedure. However, in genetic testing, some bad actors use Modifier 59 to bypass claim edits that might otherwise flag or deny a claim.
  • Unnecessary volume of same-test orders. Based on Cotiviti’s experience, one emerging scheme occurs when genetic tests that are allowed once in a patient’s lifetime are billed multiple times over the course of a year. Another scheme that investigators have long encountered takes place when laboratories bill for multiple units of the same test when only one unit is needed.
  • An unlisted code. When an analyte, or substance, that is being tested is not accurately represented with an established code, CPT code 81478—unlisted molecular pathology—may be used. It’s a useful code for an area as complex as genetic testing, as it can be used for services that are hyper-specific. However, due to its nonspecific nature, this code can be abused by bad actors to request payment for services not covered, not performed or not FDA-approved. 

These schemes are challenging to investigate—and they may involve more than one player. For example, HHS has seen cases where a laboratory has provided a kickback to physicians to sign off on these tests or where telemarketing is used to target members who may be vulnerable to genetic testing fraud. Such schemes can directly hurt vulnerable health plan members, such as when a Medicare beneficiary who is on a fixed income receives a large bill for clinical genetic testing that should never have been ordered.

Developing Robust Mechanisms for Protection

How can health plans protect themselves and ultimately their members from genetic testing fraud, waste and abuse? Five actions to consider, both before and after claims are paid, include the following.

  1. Look for a spike in prior authorization requests. When requests for genetic testing from a specific lab or provider—in total or by type of test—rise substantially, this presents an opportunity for health plans to uncover the “why.” In some cases, there might be a chance to educate physicians and labs on when specific genetic tests are appropriate. In others, such actions could help stop an emerging scheme in its early stages.
  2. Conduct a data deep-dive for repeat billers. Search claims data to identify providers that repeatedly bill the same series of genetic tests. Then, calculate the percentage of members cared for by the provider who receives these tests. For instance, if a provider bills for cancer genetic tests for 100 percent of the patients covered by the plan—such as tests for colorectal, prostate, lung and breast cancer (BRCA) genes—it would be worth reviewing whether medical documentation supports these tests.
  3. Look for providers that bill for tests outside their specialty. For example, instances where a podiatrist bills for CPT code 81162—genetic testing analysis for the hereditary breast and ovarian cancer genes, BRCA1 and BRCA2—should raise a red flag for investigators.
  4. Identify providers that bill for codes 81400-81408 on the same day. This could be an example of code stacking. Each of these codes represents a molecular pathology procedure for a rare disease. It’s rare that these codes should be used; however, there are cases when this type of billing could be allowed. Additional scrutiny is key.
  5. Assess which providers bill for an unlisted code at a high rate compared with their peers. A provider that bills for CPT code 81478 90 percent of the time, when peers bill for this code 30 percent of the time, should be flagged by investigators for review.

By taking a proactive, data-driven approach to genetic testing fraud, waste and abuse, health plans can protect members from unnecessary testing, prevent inappropriate claims from being paid, and improve their chances of recovery when an overpayment occurs. This not only protects the member’s annual plan benefits, but also helps to educate providers on appropriate billing practices to improve communication and reduce friction moving forward.

About Erin Rutzler

As vice president of fraud, waste, and abuse (FWA), Erin is responsible for the oversight and strategic direction of Cotiviti’s FWA solution suite. In her role, Erin has been integral in the development of Cotiviti’s FWA solutions over the past eight years. Serving as the company’s primary subject matter expert in investigations and FWA for compliance, client training, sales, and marketing activities, she regularly represents the company at industry conferences such as the National Health Care Anti-Fraud Association’s (NHCAA) Annual Training Conference (ATC).

   

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