The Centers for Medicare and Medicaid Services could have spent $1 billion less in 2011 by negotiating lower rates for lab tests in the same way that state Medicaid plans and private insurers did. This is the finding of the most recent inspector general’s report.
According to The Wall Street Journal today, a review of rates for the twenty most common lab tests discovered that CMS paid 18 to 44 percent more than state Medicaid plans and private insurers, soaking taxpayer for at least $910 million in unnecessary expenses. The figure is likely to be much higher once all 1,100 lab test fees are reviewed. A CMS spokesperson claimed that the department may not have the authority to revise payments, a claim that hardly seem feasible considering all of the cuts made my CMS in recent months.
Medicare is the largest consumer of clinical lab services in the USA, spending over $8 billion on tests in 2010. The IG suggested Medicare could cut costs by requiring fee-for-service beneficiaries to contribute with a co-pay or deductible for lab services. This is the norm with most private insurers. Eleven states also require lab fee co-payments in their Medicaid programs.