Medicare spending on routine lab work fell 16% in 2020

At the start of the COVID-19 pandemic, Medicare spending on lab tests increased overall, despite spending for non-COVID-19 tests falling for the first time since 2016, according to the Office of the Inspector General at HHS.

Research suggests that delays in diagnostic testing, such as cancer screening, could have long-term effects on beneficiary health and well-being, the inspector general's report stated.

Here are 10 report findings:

1. Overall Medicare spending increased from $7.7 billion in 2019 to $8 billion in 2020, driven by $1.5 billion in new spending on COVID-19 tests.

2. A rapid COVID-19 test was the No. 1 test by spending, at $1 billion. This accounts for more than 10 million rapid tests. It is the first time a new test entered the top 25 as the No. 1 test since the inspector general began monitoring spending on the top 25 tests in 2014.

3. Spending on all other tests decreased by about $1.2 billion in 2020, driven by a sharp decline in non-COVID-19 tests during the early months of the pandemic, as well as further reductions in payment rates for some of these tests, as required by the Protecting Access to Medicare Act of 2014.

4. Spending on non-COVID-19 tests in 2020 was the lowest it has been since 2016. Spending for these tests decreased by 15.9 percent from 2019, to $6.5 billion. 

5. The number of non-COVID-19 tests administered in April 2020 was 53 percent lower than in April 2019. 

6. More than 8.4 million unique Medicare Part B beneficiaries received at least 1 COVID19 test paid under the Clinical Lab Fee Schedule in 2020. On average, each unique beneficiary received two COVID-19 tests paid for by Medicare Part B. This does not include tests that may have been paid through other means, such as community testing programs.

7. Although testing rebounded in the second half of 2020, the number of non-COVID-19 tests paid for by Medicare Part B during the full year declined by 12 percent. The monthly volume of non-COVID-19 tests did not continue to increase during the second half of 2020, suggesting that many Medicare beneficiaries did not make up the tests they may have missed in the spring during the rest of 2020.

8. Spending on 20 of the 21 non-COVID-19 tests in the top 25 tests, including five cancer screening tests, decreased from 2019 to 2020. 

9. Only one non-COVID-19 test in the top 25 increased from 2019 to 2020: a microbiology test that uses nucleic acid to detect an infectious agent. Volume increased by 92 percent, and spending increased by 78 percent. This test was likely used in conjunction with COVID-19 tests, the report said.

10. The No. 2 test in 2020, a comprehensive group of blood chemicals test — procedure code 80053 — had been the top test since new payment rates took effect in 2018. Utilization of this blood chemicals test declined by 10 percent, from 42.2 million in 2019 to 37.8 million in 2020, and payments declined by 18 percent.


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