Medicare Part B spending on lab tests slightly increased to $8 billion in 2020, fueled by $1.5 billion in new reimbursements for COVID-19 diagnostics.
But the report (PDF), released Dec. 30 from the Department of Health and Human Services’ Office of Inspector General (OIG), found Medicare Part B lab spending on other types of tests declined in 2020, especially in the early months of the COVID-19 pandemic.
“The COVID-19 pandemic will continue to have an impact on Medicare Part B spending on lab tests as the pandemic continues,” the report said. “Testing strategy will continue to evolve as test technology and availability adjust to emerging variants.”
OIG looked at claims the Centers for Medicare & Medicaid Services paid out under the Clinical Laboratory Fee Schedule. This includes payments for Part B tests and not for other community testing payment systems like those for hospitals. Researchers looked at 25 lab tests performed in 2020.
Overall, lab test spending increased by 4.2% in 2020 from $7.7 billion to $8 billion, driven by new reimbursements in $1.5 billion given out for COVID-19 tests.
However, testing for all other tests declined by $1.2 billion from 2019 to 2020 to $6.5 billion in total. A major reason was the onset of the pandemic in March 2020 that caused doctors’ offices to close temporarily.
“Non-COVID-19 diagnostic test volume declined dramatically in spring 2020, before returning to more typical utilization patterns in the summer,” the report said.
But while test volumes did rebound in June, the monthly volumes of non-COVID-19 tests didn’t continue to increase as the year went on. This likely means that “many Medicare beneficiaries did not make up the tests they may have missed in the spring during the rest of 2020,” OIG said. “Research suggests that delays in diagnostic testing, such as cancer screening, could have long-term effects on beneficiary health and well-being.”
Part B’s payment rates for COVID-19 ranged from $18 a test to $100 for high-throughput testing, according to the report.
Medicare spent most of its money in 2020 on rapid tests, shelling out $1.02 billion for more than 10 million of the diagnostic tools.