Total Medicare Part B Spending on Lab Tests Decreased in 2023, Driven in Part by Less Spending on COVID-19 Tests, OEI-09-24-00350
- Document type
- PDF source document
- Date
- 2024-12-20
Summary
A data snapshot issued by the Department of Health and Human Services Office of Inspector General in December 2024, numbered OEI-09-24-00350, analysing Medicare Part B spending on clinical diagnostic laboratory tests in 2023. It reports that Part B spent $8.0 billion on lab tests in 2023, a 5.4 percent decrease from 2022, and that spending on COVID-19 tests fell 56 percent, from $1.7B to $751M, accounting for 9 percent of Medicare Part B spending in 2023. It reports that the volume of COVID-19 tests fell 55 percent and the number of enrollees receiving them fell 48 percent, while spending on genetic tests rose 32 percent and volume rose 41 percent. Spending on the top 25 lab tests decreased 16 percent, from $4.8 billion in 2022 to $4.0 billion in 2023. The snapshot lists the top 25 tests with procedure codes and sets out its methodology and limitations.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
DATA SNAPSHOT
December 2024 | OEI-09-24-00350
Total Medicare Part B Spending
on Lab Tests Decreased in 2023,
Driven in Part by Less Spending on
COVID-19 Tests
OIG.HHS.GOV
December 2024 | OEI-09-24-00350
DATA SNAPSHOT
Total Medicare Part B Spending on Lab Tests Decreased in 2023,
Driven in Part by Less Spending on COVID-19 Tests
Key Takeaways
Spending on COVID-19 tests
• In 2023, total Medicare Part B spending on clinical decreased significantly in 2023
diagnostic laboratory tests (lab tests) decreased by
5.4 percent from total lab test spending in 2022. $1.7B 56%
decrease
• Spending on COVID-19 tests decreased
significantly in 2023 due to several factors,
including the widespread availability of over-the- $751M
counter COVID-19 tests.
• Medicare Part B spending on genetic tests has 2022 2023
steadily increased over the last 10 years. Source: OIG analysis of 2022-2023 Medicare
Part B claims data, 2024.
Why OIG Did This Review
• This review is part of an effort to help control Medicare lab test spending. The Protecting Access to
Medicare Act of 2014 (PAMA) required that Medicare Part B payment rates align with rates paid by private
payors.1 To provide oversight that these efforts were helping to control lab test spending, Congress also
mandated that OIG publicly release an annual analysis of the top 25 tests based on Medicare spending
and conduct analyses that OIG determines appropriate. This data snapshot provides an analysis of
Medicare Part B payments for lab tests in 2023, including an analysis of the top 25 tests.
• From 2018 through 2020, CMS implemented new Medicare Part B lab test payment rates. In 2021, new
payment rates were to go into effect; however, changes in legislation have delayed any rate changes. The
next payment rate changes are scheduled for January 1, 2027.2
What OIG Did
We analyzed Medicare Part B claims data for lab tests paid for under the Medicare Clinical Laboratory Fee
Schedule (CLFS) in 2023. We identified key statistics and trends for total Medicare Part B spending on lab
tests, including the top 25 lab tests on the basis of total spending. Totals and percentages are calculated
with source data and may not reflect rounding of annual figures presented in the charts.
CPT copyright 2023 American Medical Association. All rights reserved. Fee schedules, relative value units, conversion factors and/or
related components are not assigned by the AMA, are not part of CPT, and the AMA is not recommending their use. The AMA does not
directly or indirectly practice medicine or dispense medical services. The AMA assumes no liability for data contained or not contained
herein. CPT is a registered trademark of the American Medical Association.
OIG.HHS.GOV
Total Medicare Part B Laboratory Spending in 2023
Medicare Part B spent $8.0 billion on lab tests in 2023, a 5.4 percent decrease from 2022. Over the
last 10 years, lab test spending showed growth between 2014 and 2021, with peak spending during the
COVID-19 public health emergency.
2018
New payment rates $9.3B
take effect
$8.4B
$8.0B $8.0B
$7.6B $7.7B
$7.0B $7.0B $7.1B
$6.8B
COVID-19 public health
emergency
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Source: OIG analysis of 2014-2023 Medicare Part B claims data, 2024. On January 31, 2020, the Secretary of Health and Human
Services declared COVID-19 a public health emergency. The COVID-19 public health emergency declaration expired on May 11, 2023.
Total Medicare Part B Laboratory Spending by Category
After peaking in 2021, Medicare Part B spending on COVID-19 tests continued to decline, showing
a sharp drop in spending in 2023. Chemistry and other tests, such as blood tests and drug tests, have
accounted for the largest share of Medicare Part B’s total spending on lab tests consistently since 2018
when new payment rates went into effect.3 In addition, total spending on genetic tests has fluctuated
over the last 5 years.
$2.0B
$1.7B $750M COVID-19
$969M $1.5B
$1.5B
$1.9B $1.8B Genetic
$1.2B $1.4B
Chemistry
$6.6B $6.2B $5.3B and other
$5.3B $5.5B $5.3B tests
2018 2019 2020 2021 2022 2023
Source: OIG analysis of 2018-2023 Medicare Part B claims data, 2024.
Because of rounding, spending in the lab test categories may not sum to the total spending for the year.
2
Medicare Part B COVID-19 Tests: Spending and Utilization
Total Medicare Part B spending on COVID-19 tests decreased in 2023 due to factors such as Medicare
no longer paying for five COVID-19 testing related payments when the public health emergency ended
on May 11, 2023, a decline in the number of COVID-19 cases in the United States, and widespread
availability of over-the-counter COVID-19 tests.4,5,6 During the COVID-19 public health emergency, Part
B spending and volume on COVID-19 tests peaked in 2021.
Spending on COVID-19 tests decreased by Share of spending on COVID-19 tests
56 percent in 2023. accounted for 9 percent of Medicare Part B
spending in 2023.
$2.0B
2020 19%
$1.7B
$1.5B 56% 2021 21%
decrease
2022 20%
$751M
2023 9%
0% 100%
2020 2021 2022 2023
Source: OIG analysis of 2020-2023 Medicare Part B Source: OIG analysis of 2020-2023 Medicare Part B
claims data, 2024. claims data, 2024.
Volume of COVID-19 tests decreased by Number of enrollees who received COVID-19
55 percent.7 tests decreased by 48 percent.
25.8M
23.3M 55% 10.1M
8.5M 48%
18.8M decrease 8.5M
decrease
10.4M 4.4M
2020 2021 2022 2023 2020 2021 2022 2023
Source: OIG analysis of 2020-2023 Medicare Part B Source: OIG analysis of 2020-2023 Medicare Part B
claims data, 2024. claims data, 2024.
3
Medicare Part B Genetic Tests: Spending and Utilization
Total Medicare Part B spending on genetic tests increased by 32 percent from 2022 to 2023. Although
spending on genetic tests has fluctuated year-to-year over the last 10 years, overall it has been steadily
increasing between 2014 and 2023. In 2023, spending on genetic tests was nearly a quarter of total
Medicare Part B spending.
$1.9B $1.8B
$1.4B Spending on
$1.4B genetic tests has
$969M $1.2B nearly quadrupled
since 2014.
$466M
$289M
$473M
$393M
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Source: OIG analysis of 2014-2023 Medicare Part B claims data, 2024.
Volume of genetic tests increased by 41 percent from 2022 to 2023.
41%
increase
2.8M
2.3M 2.4M
2M
1.8M 1.8M
1.7M
1.3M
0.8M 0.9M
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Source: OIG analysis of 2014-2023 Medicare Part B claims data, 2024.
Number of genetic test procedure codes listed on the CLFS has steadily increased over the decade,
reaching 415 codes in 2023.
382 415
365
334
266
204
78 103 110
66
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Source: OIG analysis of 2014-2023 Medicare Part B claims data, 2024.
4
Top 25 Lab Tests by Medicare Part B Spending
Total Medicare Part B spending for the top 25 lab tests decreased by 16 percent, from
$4.8 billion in 2022 to $4.0 billion in 2023.
The next page displays spending and volume for the top 25 lab tests. Most notably:
The top three tests by spending were under the category of chemistry and other tests, which totaled $1.1 billion dollars in
Medicare Part B spending.8 These three tests – specifically blood tests with procedure codes 80053, 80061, and 84443
(lines 1 to 3) – are among the most common tests that providers routinely use to monitor a person’s health. These three
codes have been three of the top four tests since new payment rates took effect in 2018.
Procedure code 80053 returned as the top test by Medicare Part B spending, since the COVID-19 pandemic began in
2020.
Most COVID-19 tests in the top 25 saw drops in volume and spending; the exception was the COVID-19 test with
procedure code 87637 (line 15), which was new to the top 25 in 2023. Notably, the COVID-19 test with procedure code
U0003 (line 12) had an 83 percent decrease in volume in 2023, partly due to CMS ending payments for the test and ending
use of the procedure code in May 2023.9 In 2022, U0003 was the lab test with the largest Medicare Part B spending.
All genetic tests in the top 25 saw increases in volume and spending. In particular, volume for a genetic test for detecting
genes associated with cancer (line 9) grew 59 percent. Genetic tests, as a category in the top 25, had the highest payment
rates – ranging from $508.87 to $5,000.00.
CPT copyright 2023 American Medical Association. All rights reserved.
5
Top 25 Lab Tests by Medicare Part B Spending
2023 2023 Volume 2023
payment volume change spending
Test Description (Procedure Code) rate (millions) from 2022 (millions)
1 Blood test, comprehensive group of blood chemicals (80053 ) $10.56 38.6 0% $405.1
2 Blood test, lipids (cholesterol and triglycerides) (80061) $13.39 25.3 -1% $332.3
3 Blood test, thyroid stimulating hormone (TSH) (84443) $16.80 19.2 0% $316.0
4 Genetic test: Gene analysis (colorectal cancer) (81528) $508.87 0.6 13% $301.0
Detection test by nucleic acid for organism, amplified probe technique
5 $35.09 8.5 32% $292.4
(87798)
Complete blood cell count (red cells, white blood cells, platelets), automated
6 $7.77 36.5 -1% $282.3
(85025)
7 Vitamin D-3 level (82306) $29.60 8.7 -2% $250.9
8 Hemoglobin A1C level (83036) $9.71 18.4 0% $176.0
9 Genetic test: Test for detecting genes associated with cancer (81455) $2,919.60 0.05 59% $145.2
10 Drug test(s), definitive, 22 or more drug class(es) (G0483) $246.92 0.6 -13% $145.1
11 Testing for presence of drug, by chemistry analyzers (80307) $62.14 2.1 -8% $129.1
COVID-19 test: Infectious agent detection by nucleic acid (DNA or RNA);
12 $75.00 1.6 -83% $115.0
severe acute (U0003)
13 Drug test(s), definitive, 15-21 drug class(es) (G0482) $198.74 0.6 -9% $110.5
Genetic test: Gene analysis of 55-74 genes associated with solid organ cancer
14 $5,000.00 0.02 31% $104.8
in cell-free (0242U)
COVID-19 test: Detection test by multiplex amplified probe technique for
15 $142.63 0.7 New to top 25 $103.6
severe acute (87637)
16 Parathormone (parathyroid hormone) level (83970) $41.28 2.6 1% $103.1
Genetic test: Test for detecting genes associated with breast cancer
17 $3,873.00 0.03 2% $94.7
(81519)
18 Cyanocobalamin (vitamin B-12) level (82607) $15.08 6.2 5% $91.9
COVID-19 test: Respiratory infectious agent detection by RNA for severe
19 $142.63 0.6 -1% $79.9
acute respiratory (0241U)
20 Blood test, basic group of blood chemicals (calcium, total) (80048) $8.46 9.3 -4% $79.4
21 Drug test(s), definitive, 1-7 drug class(es) (G0480) $114.43 0.7 -4% $77.8
COVID-19 test: Amplified DNA or RNA probe detection of severe acute
22 $51.31 1.5 -17% $76.4
respiratory syndrome (87635)
23 PSA (prostate specific antigen) measurement, total (84153) $18.39 4.2 0% $76.2
Genetic test: mRNA gene expression analysis of 22 genes in prostate tumor
24 $3,873.00 0.02 New to top 25 $71.7
tissue (81542)
25 Drug test(s), definitive, 8-14 drug class(es) (G0481) $156.59 0.5 New to top 25 $70.5
Total Medicare Part B spending on the top 25 lab tests in 2023: $4.0 billion
Sources: OIG analysis of 2022–2023 spending on lab tests in Medicare Part B, 2024. Payment rates are from the 2023 CLFS. CPT copyright
2023 American Medical Association. All rights reserved.
6
Methodology
Analysis: We based this report on our analysis of Medicare Part B claims data for lab tests performed in
2023 and reimbursed under the CLFS payment system. Through our analysis, we identified key statistics and
trends for Medicare spending on lab tests. We analyzed Medicare spending and test volume by procedure
code and category. Test volume is based on the number of units for which labs billed Medicare. We calculated
total spending for 2023 and compared that to the results from previous years. In previous years, we presented
spending on “chemistry tests” separate from the “other tests” category. Because spending in each of these two
categories has remained relatively stable over the years, we combined “chemistry tests” spending with “other
tests” spending for 2014-2023.
We did not include tests paid for under other payment systems, such as the payment system for critical access
hospitals or the Hospital Outpatient Prospective Payment System. Many of the lab tests performed in
outpatient settings (such as hospitals, skilled nursing facilities, and dialysis facilities) are paid for under
Medicare payment systems other than the CLFS. We did not include claims for physician interpretation of tests.
At-home and over-the-counter tests are paid for under Medicare payment systems other than the CLFS and
were also not included in this analysis.
Labs bill for each test on the CLFS using a Healthcare Common Procedure Coding System (HCPCS) code, which
we refer to as a “procedure code.” The HCPCS is divided into two systems, referred to as Level I and Level II.
Level I HCPCS codes are composed of Current Procedural Terminology (CPT) codes. Level II HCPCS codes are
established by CMS primarily for items, supplies, and non-physician services not covered by CPT codes. We
used CPT categories for all tests on the CLFS, except tests used to diagnose COVID-19, which were analyzed as
a group. For HCPCS Level II codes that are unique to the CLFS, we used categories previously assigned by CMS.
COVID-19 tests. We used CPT test codes and HCPCS codes to identify 25 COVID-19 tests that were
authorized for payment in 2023. This set of codes includes viral tests, antibody tests, and respiratory panel
tests that include COVID-19 in the panel. We included in our analysis only tests paid for by Medicare Part B
from 2020 to 2023. Tests that Medicare Part B enrollees received through other programs, such as
community testing efforts, were not included unless they were paid for by Medicare Part B. For analysis by
Medicare enrollee, we identified enrollees by using the Health Insurance Claim Numbers on the claims.
Genetic tests. We used CPT test codes and HCPCS codes to identify 415 genetic tests that were authorized
for payment in 2023. This set of codes includes molecular pathology tests, multianalyte algorithmic assays,
genomic sequencing procedures, and proprietary lab analysis tests. We also analyzed the change in
spending and volume on genetic tests from 2014 to 2023.
Top 25 lab tests. We identified the top 25 lab tests on the basis of total spending in 2023 for each
procedure code and calculated total spending for these tests. For this group of tests, we calculated the
change in the volume of test units paid for by Medicare from 2022 to 2023.
Data Source: In July 2024, we extracted claims data from CMS’s Integrated Data Repository. We used claims
data from the National Claims History Physician/Supplier Part B claim files and National Claims History
Outpatient files. The Physician/Supplier Part B files primarily include claims from independent labs and
physician office labs. The Outpatient files primarily include claims from hospital labs.
Limitations: We did not verify the accuracy or completeness of the claims data. The data are updated daily
and are therefore subject to change.
Standards: We conducted this study in accordance with the Quality Standards for Inspection and Evaluation
issued by the Council of the Inspectors General on Integrity and Efficiency.
CPT copyright 2023 American Medical Association. All rights reserved.
7
Related Reports
Medicare Part Spending on Clinical Diagnostic Laboratory Tests
OEI-19-23-00350 December 2023
in 2022
Medicare Part B Spending on Lab Tests Increased in 2021, Driven
By Higher Volume of COVID-19 Tests, Genetic Tests, and OEI-09-22-00400 December 2022
Chemistry Tests
COVID-19 Tests Drove an Increase in Total Medicare Part B
Spending on Lab Tests in 2020, While Use of Non-COVID-19 OEI-09-21-00240 December 2021
Tests Decreased Significantly
Federal COVID-19 Testing Report: Data Insights from Six Federal PRAC Health Care
January 2021
Health Care Programs* Subgroup
Despite Savings on Many Lab Tests in 2019, Total Medicare
Spending Increased Slightly Because of Increased Utilization for OEI-09-20-00450 December 2020
Certain High-Priced Tests
Medicare Laboratory Test Expenditures Increased in 2018,
OEI-09-19-00100 August 2020
Despite New Rate Reductions
Medicare Payments for Clinical Diagnostic Laboratory Tests in
OEI-09-18-00410 September 2018
2017: Year 4 of Baseline Data
Setting Medicare Payment Rates for Clinical Diagnostic
OEI-09-17-00050 July 2018
Laboratory Tests: Strategies To Ensure Data Quality
Medicare Payments for Clinical Diagnostic Laboratory Tests in
OEI-09-17-00140 September 2017
2016: Year 3 of Baseline Data
Changing How Medicare Pays for Clinical Diagnostic Laboratory
OEI-09-16-00100 September 2016
Tests: An Update on CMS’s Progress
Medicare Payments for Clinical Diagnostic Laboratory Tests in
OEI-09-16-00040 September 2016
2015: Year 2 of Baseline Data
Medicare Payments for Clinical Laboratory Tests in 2014:
OEI-09-15-00210 September 2015
Baseline Data
Comparing Lab Test Payment Rates: Medicare Could Achieve
OEI-07-11-00010 June 2013
Substantial Savings
Variation in the Clinical Laboratory Fee Schedule OEI-05-08-00400 July 2009
*This report was released by the Pandemic Response Accountability Committee Health Care Subgroup and included analysis
of Medicare Part B claims for COVID-19 tests performed between February 1, 2020, and August 31, 2020.
8
Endnotes
1 PAMA, P.L. No. 113-93 (April 2014), § 216(a). See also 42 CFR 414.507(a).
2 CMS, CLFS Reporting. Accessed at CLFS Reporting | CMS on November 28, 2024.
3 The “other test” category includes a variety of tests such as drug assay procedure tests, organ or
disease-oriented panel tests, hematology and coagulation tests, and reproductive medicine
procedure tests.
4 On May 12, 2023, the end of the COVID-19 public health emergency, CMS ended five procedure
codes related to COVID-19 (G2023, G2024, U0003, U0004, and U0005). CMS, Quarterly Update for
Clinical Laboratory Fee Schedule (CLFS) and Laboratory Services Subject to Reasonable Charge
Payment. Accessed at https://www.cms.gov/files/document/r12021cp.pdf on December 17, 2024.
5 CDC, Trends in United States COVID-19 Hospitalizations, Deaths, Emergency Department (ED)
Visits, and Test Positivity by Geographic Area. Accessed at CDC COVID Data Tracker: Trends by
Geographic Area on November 18, 2024.
6 Medicare Part B covered up to eight over-the-counter COVID-19 tests from
April 4, 2022, to May 11, 2023. CMS, COVID-19 Over-the-Counter Tests. Accessed at COVID-19
Over-the-Counter Tests on August 29, 2024.
7 We excluded procedure code U0005 from this analysis. This code is an add-on code and can
only be included on claims with procedure codes U0003 and U0004. CMS Ruling 2020-1-R2.
Accessed at https://www.cms.gov/files/document/cms-ruling-2020-1-r2.pdf on August 28, 2024.
8 The top three tests include a chemistry test (procedure code 84443) and two organ or
disease-oriented panel tests (procedure codes 80053 and 80061).
9 On May 12, 2023, the end of the COVID-19 public health emergency, CMS ended payments and
use of the procedure code U0003. CMS, Laboratories: CMS Flexibilities to Fight
COVID-19. Accessed at https://www.cms.gov/files/document/laboratories-cms-flexibilities-fight-
covid-19.pdf on October 7, 2023.
9
Report Fraud, Waste,
and Abuse
OIG Hotline Operations accepts tips and complaints from all sources about
potential fraud, waste, abuse, and mismanagement in HHS programs. Hotline
tips are incredibly valuable, and we appreciate your efforts to help us stamp
out fraud, waste, and abuse.
TIPS.HHS.GOV
Phone: 1-800-447-8477
TTY: 1-800-377-4950
Who Can Report?
Anyone who suspects fraud, waste, and abuse should report their concerns
to the OIG Hotline. OIG addresses complaints about misconduct and
mismanagement in HHS programs, fraudulent claims submitted to Federal
health care programs such as Medicare, abuse or neglect in nursing homes,
and many more. Learn more about complaints OIG investigates.
How Does It Help?
Every complaint helps OIG carry out its mission of overseeing HHS programs
and protecting the individuals they serve. By reporting your concerns to the
OIG Hotline, you help us safeguard taxpayer dollars and ensure the success of
our oversight efforts.
Who Is Protected?
Anyone may request confidentiality. The Privacy Act, the Inspector General
Act of 1978, and other applicable laws protect complainants. The Inspector
General Act states that the Inspector General shall not disclose the identity of
an HHS employee who reports an allegation or provides information without
the employee’s consent, unless the Inspector General determines that
disclosure is unavoidable during the investigation. By law, Federal employees
may not take or threaten to take a personnel action because of
whistleblowing or the exercise of a lawful appeal, complaint, or grievance
right. Non-HHS employees who report allegations may also specifically
request confidentiality.
1
Stay In Touch
Follow HHS-OIG for up to date news and publications.
OIGatHHS
HHS Office of Inspector General
Subscribe To Our Newsletter
OIG.HHS.GOV
Contact Us
For specific contact information, please visit us online.
U.S. Department of Health and Human Services
Office of Inspector General
Public Affairs
330 Independence Ave., SW
Washington, DC 20201
Email: Public.Affairs@oig.hhs.gov
1
File and source
- File
- OEI-09-24-00350-total-medicare-part-b-spending-on-lab-tests-decreased-in-2023-driven-in-part-by.pdf
- Size
- 1,077,090 bytes
- SHA-256
- 0d5c1d7fa40d51d481b34eea09c56a14abc71f21bbfd8f61ff7c549a74bc8602
- Our copy
- OEI-09-24-00350-total-medicare-part-b-spending-on-lab-tests-decreased-in-2023-driven-in-part-by.pdf
- Original
- oig.hhs.gov