Managed Care Outlook 2023

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Read time: 7 minutes

Managed care companies continue to face increased risk from providers engaging in fraudulent, abusive and wasteful health care services and billing, and 2023 will be no exception. Our team anticipates at least two areas likely to garner new or increased attention in 2023: (1) COVID-19 laboratory testing; and (2) durable medical equipment (DME).

Abusive payment demands for COVID-19 testing

To encourage the widespread availability and public use of COVID-19 testing during the pandemic and to reduce barriers to testing, the federal government enacted speedy but seemingly conflicting guidance regarding coverage of COVID-19 testing services from non-contracted laboratory providers. The guidance increased patient access to testing services and reduced barriers to obtaining testing by encouraging new entrants into the laboratory testing community.

On the flip side, loose federal regulatory guidance led to a number of providers taking advantage of the public health emergency by engaging in abusive billing practices, performing unnecessary services and/or committing fraud. Notably, a number of providers performed unrequested and unnecessary tests and/or submitted excessive billed charges for tests many multiples above Medicare rates.

While a handful of bellwether cases creeping throughout the U.S. court system are highlighting these issues, the full scope and extent of abusive billing by laboratory providers remains unknown. It will take time for claims data to become clearer and more robust and for additional information to be uncovered surrounding the circumstances of the various laboratory tests that were performed and billed.

In the meantime, our team has identified some best practices for preventing and uncovering these abusive billing practices and how to approach litigation in the event that it is necessary.

Tips for uncovering and/or preventing abusive COVID-19 lab billing

  • Robust data analytics. Identification of patterns that may establish testing was done as a part of a general surveillance program, such as workplace or school testing, that is not required to be covered under federal regulatory guidance.
  • Targeted medical record requests. Medical record requests are an important tool for identifying the circumstances in which the testing was performed and who performed the testing. Record review may also assist in identifying trends.
  • Strategic public record requests. Freedom of Information Act requests to the Centers for Medicare and Medicaid Services (CMS) and state licensing agencies can be a goldmine of information. Many of the actors involved in questionable COVID-19 testing and billing practices likely did not comply with state licensing requirements or Commission on Office Laboratory Accreditation (COLA) regulations if they performed testing at unlicensed locations. Information regarding a laboratory’s ownership and affiliation may also reveal fraudulent or abusive practices, such as manipulating the submission of claims for services performed by an in-network entity that were then billed through an out-of-network entity under common ownership to inflate payments.
Key takeaways
  • Update template contracts, credentialing requirements and payment policies to prevent improper payments.
  • Use FOIA requests and provider questionnaires to obtain information about service providers.
  • Enhance claims data analytics to spot troubling billing patterns.

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