U.S. Department of Health and Human Services 
 Office of Inspector General 
 
Data Brief 
 
 December 2020, OEI-09-20-00450 
Despite Savings on Many Lab Tests in 2019, Total Medicare Spending 
Increased Slightly Because of Increased Utilization for Certain 
High-Priced Tests  
What OIG Found 
Key Results 
Medicare Part B spent $7.68 billion on lab tests in 2019, a $93 million 
In the second year of the  increase from 2018.  For the top 25 tests by Medicare spending, 
new payment system,  expenditures also increased slightly, to $4.64 billion, up from $4.57 billion 
reduced payment rates  in 2018.  Analysis of these top 25 tests illustrates 2 trends that led to these 
for many lab tests  spending outcomes.  
resulted in savings for 
the Medicare program.   First, for the group of 17 tests (among the top 25) that had payment rate 
However, total Medicare  reductions, overall Medicare spending decreased in 2019.  Most of these 
spending increased  tests had the maximum 10-percent payment rate reduction allowed by the 
slightly because of  Protecting Access to Medicare Act of 2014 (PAMA).  Despite increased 
increased utilization and 
utilization for some of these tests, overall Medicare spending decreased 
spending on certain    
by $175 million for the group compared to 2018, demonstrating thatas 
high-priced tests, such as 
expectedthe PAMA requirements achieved savings for the Medicare 
genetic tests.  
program. 
Second, for the group of eight tests with payment rates that did not change, overall Medicare spending 
increased in 2019 because of increases in utilization for many of these tests.  Payment rates for these 
tests did not change for one of two reasons: (1) tests with payment rates that had already reached the 
rate required by PAMA did not require further reductions in 2019, or (2) tests that were new to the 
Clinical Laboratory Fee Schedule (CLFS) as of 2018 were not affected by PAMA rate reductions.   
Why OIG Did This Review 
PAMA changed the way the Medicare program sets payment rates for lab tests by aligning Medicare 
payment rates with private payment rates.  Prior to PAMA, the Office of Inspector General (OIG) found 
that Medicare was paying significantly more than other payers for many lab tests.  The Centers for 
Medicare & Medicaid Services (CMS) calculated new rates that took effect in 2018.  As part of PAMA, 
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 brief provides an 
analysis of Medicare payments for lab tests in 2019, the second year of the new payment system. 
How OIG Did This Review 
We analyzed claims data for lab tests performed in 2019 that CMS paid for under the CLFS.  These tests 
are covered under Medicare Part B and do not include tests that Medicare paid for under other 
payment systems, such as the payment system for critical access hospitals or the Hospital Outpatient 
Prospective Payment System.  We identified the top 25 lab tests based on Medicare spending for tests 
performed in 2019.  We also identified key statistics and emerging trends, including Medicare spending 
by procedure code and test category.   
RESULTS 
 
Although payment rates were lower for most Medicare lab tests 
in 2019, total spending increased slightly because of increased 
spending on certain high-priced tests 
Medicare spent a total of $7.68 billion on clinical laboratory (lab) tests in 2019, 
a $93 million increase from 2018.  Based on rate adjustments required by the 
Protecting Access to Medicare Act of 2014 (PAMA), payment rates in 2019 were lower 
for 73 percent of lab tests than they were in 2018.  However, the savings that resulted 
from these lower rates were overtaken by increased spending on genetic tests and 
other high-priced lab tests.  See Exhibit 1 for annual Medicare spending on lab tests 
since 2014, when OIG began this series of reports. 
Exhibit 1: Medicare spending for lab tests continued an upward trend in 
2019. 
$7.68B
$7.59B
$7.13B
$7.00B
$6.96B
$6.77B
2014 2015 2016 2017 2018* 2019*
 
*In 2018 and 2019, lab payment rates were subject to the rate reductions required by PAMA. 
Note: Medicare spending dollar values are rounded.  
Source: OIG analysis of 20142019 spending on lab tests in Medicare Part B, in billions, 2020.   
Medicare spending on genetic tests reached $1.36 billion in 2019  
Medicare spending on genetic tests reached $1.36 billion in 2019, an increase of 
about $390 million from 2018, as shown in Exhibit 2 on the next page.  The spending 
increase was largely driven by an increase in utilization of genetic tests.  Medicare 
paid for about 2.22 million units of genetic tests in 2019, up from about 1.76 million 
units in 2018.  See Appendix A for details about spending on three categories of 
genetic tests: molecular pathology, multianalyte algorithmic assays, and genomic 
sequencing procedures. 
Data Brief: Despite Savings on Many Lab Tests in 2019, Total Medicare Spending Increased Slightly Because of Increased 
Utilization for Certain High-Priced Tests 
OEI-09-20-00450  Results | 2  Exhibit 2: Medicare spending on genetic tests increased for the fourth year 
in a row and reached its highest point of $1.36 billion in 2019.  
$1.36B
$969M
$473M
$466M
$393M
$289M
2014 2015 2016 2017 2018 2019
 
Source: OIG analysis of 20142019 spending on lab tests in Medicare Part B, 2020.  
Total Medicare spending on the top 25 lab tests increased 
slightly in 2019 
Similar to total Medicare Part B spending on lab tests, expenditures on the 
top 25 tests increased slightly in 2019.  Medicare spent $4.64 billion on the 
top 25 tests in 2019, up from $4.57 billion in 2018.  Payment rates were reduced 
for 17 of the top 25 tests, whereas the payment rates for the remaining 8 tests did not 
change in 2019.  Exhibit 3 on the next page displays key statistics for the top 25 lab 
tests by Medicare spending. 
For the group of 17 tests that had reduced payment rates, total 
spending decreased in 2019 
Overall Medicare spending decreased for the group of 17 tests (among the top 25) 
that had reduced payment rates in 2019.1  For all but one of these tests, 
the 2019 rates were reduced by 10 percent, the maximum rate reduction allowed by 
PAMA for tests in 2019 (see the Rate Change from 2018 column in Exhibit 3).2, 3  
Because of these rate changes, total spending for the group of 17 tests decreased 
by $175 million in 2019, illustrating thatas expectedthe lab payment rate changes 
required by PAMA achieved savings for some lab tests.  
Notably, savings for some of these tests occurred despite increased utilization 
in 2019 compared to 2018.  For example, Medicare spending for the comprehensive 
blood chemistry test (line 1 in Exhibit 3) decreased by about $45 million in 2019, 
despite an increase in utilization of about a half-million tests.   
Data Brief: Despite Savings on Many Lab Tests in 2019, Total Medicare Spending Increased Slightly Because of Increased 
Utilization for Certain High-Priced Tests 
OEI-09-20-00450  Results | 3  Exhibit 3: Medicare Part B spending on the top 25 lab tests in 2019 
Spending 
2019  2019 Test  2019 Test  
Rate Change   Change  
Test Description (Procedure Code)  Payment   Volume   Spending  
 From 2018  From 2018  
 Rate  (Millions)  (Millions) 
(Millions) 
1  Blood test, comprehensive group of blood chemicals 
$11.74  -10%  42.17  $491.62  -$45.48 
(80053) 
2  B lood test, lipids (cholesterol and triglycerides) (80061)  $14.88  -10%  28.69  $418.83  -$44.75 
3  B lood test, thyroid stimulating hormone (TSH) (84443)  $18.67  -10%  21.37  $391.45  -$43.26 
4  Complete blood cell count (red cells, white blood cell, 
$8.63  -10%  41.24  $354.14  -$36.95 
platelets), automated test (85025) 
5  Drug test(s), definitive, 22 or more drug class(es), 
$246.92  0%  1.28  $307.06  -$6.38 
including metabolite(s) if performed (G0483) 
6  Genetic Test: Molecular pathology procedure level 9 
$2,000.00  0%  0.15  $290.42  $172.50 
(81408) 
7  V itamin D-3 level (82306)  $32.89  -10%  8.92  $286.13  -$32.81 
8  G  enetic Test: Gene analysis (colorectal cancer) (81528)  $508.87  0%  0.48  $239.40  $71.73 
9  T esting for presence of drug (80307)  $64.65  -10%  3.43  $216.51  -$19.56 
10  Hemoglobin A1C level (83036)  $10.79  -10%  20.11  $213.78  -$18.54 
11  Drug test(s), definitive, per day; 1521 drug class(es), 
$198.74  0%  0.82  $158.19  -$1.13 
including metabolite(s) if performed (G0482) 
12  Genetic Test: Gene analysis (breast cancer 1 and 2) full 
$2,027.64  -10%  0.06  $119.55  $70.02 
sequence and duplication or deletion variants (81162)  
13  Blood test, basic group of blood chemicals (80048)  $9.40  -10%  12.54  $118.44  -$14.08 
14  Drug test(s), definitive, per day; 17 drug class(es), 
$114.43  0%  1.07  $116.95  $3.00 
including metabolite(s) if performed (G0480) 
15  Parathormone (parathyroid hormone) level (83970)  $45.86  -10%  2.47  $110.42  -$5.48 
16  Detection test for organism (87798)  $38.99  -10%  2.72  $102.98  $50.89 
17  Cyanocobalamin (vitamin B-12) level (82607)  $16.75  -10%  5.84  $95.68  -$6.85 
18  Drug test(s), definitive, per day; 814 drug class(es),  $156.59  0%  0.63  $95.31  -$1.28 
including metabolite(s) if performed (G0481) 
19  PSA (prostate specific antigen) measurement (84153)  $20.44  -10%  4.38  $87.75  -$7.83 
20  Genetic Test: Test for detecting genes associated with 
$3,873.00  0%  0.02  $83.24  $6.62 
breast cancer (81519)  
21  ADLT: Targeted genomic sequence analysis, solid 
$3,500.00  0%  0.02  $78.18  $45.40 
organ neoplasm, DNA analysis of 324 genes (0037U)   
22  Thyroxine (thyroid chemical) measurement (84439)  $10.02  -10%  7.39  $72.91  -$6.51 
23  Bacterial colony count, urine (87086)  $8.97  -10%  7.34  $65.72  -$7.59 
24  Natriuretic peptide (heart and blood vessel protein)  $39.26  -6%  1.58  $61.91  -$2.88 
level (83880) 
25  Ferritin (blood protein) level (82728)  $15.15  -10%  4.14  $61.65  -$3.47 
 
                                               Total Medicare spending on the top 25 tests: $4.64 billion 
Note: Tests 81162 (line 12 in Exhibit 3) and 0037U (line 21 in Exhibit 3) entered the top 25 lab tests in 2019.  Test 0037U is an Advanced 
Diagnostic Lab Test (ADLT).  
Sources:  OIG analysis of 20182019 spending on lab tests in Medicare Part B, 2020.  Payment rates are from the 2019 Clinical Laboratory Fee 
Schedule (CLFS).  See endnote 4 for the American Medical Association (AMA) copyright notice.  
Data Brief: Despite Savings on Many Lab Tests in 2019, Total Medicare Spending Increased Slightly Because of Increased 
Utilization for Certain High-Priced Tests 
OEI-09-20-00450  Results | 4  For the group of eight tests with payment rates that did not 
change, total spending increased in 2019 
Overall Medicare spending increased for the group of 8 tests (among the top 25) with 
payment rates that did not change in 2019.  The reason that payment rates for six 
tests in the group did not change is because they had already reached the rate 
required by PAMAi.e., the volume-weighted median of lab-reported data.5  The 
remaining two tests (lines 6 and 21 in Exhibit 3) entered the CLFS in 2018 (after  
Round 1 of the PAMA-required rate calculations), and their payment rates will not 
change until CMS establishes new rates based on more recent data from private 
payers. 
Four of the eight tests (lines 6, 8, 14, and 20 in Exhibit 3) had higher Medicare 
spending as a result of an increase in utilization.  Because each of these tests had 
relatively high payment rates, ranging from $114.43 to $3,783, even a small increase 
in utilization could result in a dramatic increase in spending.  Three of the eight tests 
(lines 5, 11, and 18 in Exhibit 3) saw lower Medicare spending as a result of a decrease 
in the utilization.  
The remaining test (line 21 in Exhibit 3) was not in the top 25 in 2018 and had total 
spending of over $78 million in 2019.  The organ neoplasm DNA sequencing test is an 
ADLT that CMS recognized as a covered service effective May 18, 2018.6, 7, 8, 9  The 
payment rate for this test is $3,500, and Medicare paid for 22,822 units of the test.  
See the box below for details on ADLTs. 
Establishing Advanced Diagnostic Laboratory Tests 
PAMA established a new class of tests: Advanced Diagnostic Laboratory Tests (ADLTs).  
ADLTs are subject to a distinct method of temporary pricing, and labs that perform these 
tests are required to submit data from private payers annually.  
To be considered an ADLT, a test must be offered and furnished by a single lab and either:  
  be cleared or approved by the Food and Drug Administration, or  
  be a test that  
o  is an analysis of multiple biomarkers of DNA, RNA, or proteins;  
o  provides new clinical diagnostic information that cannot be obtained from any 
other test or combination of tests; 
o  when combined with an empirically derived algorithm, yields a result that predicts 
the probability a specific patient will develop a certain condition(s) or respond to a 
particular therapy(ies); and 
o  may include other assays. 
 
   
Data Brief: Despite Savings on Many Lab Tests in 2019, Total Medicare Spending Increased Slightly Because of Increased 
Utilization for Certain High-Priced Tests 
OEI-09-20-00450  Results | 5   
CONCLUSION 
 
 
Our analysis of Medicare Part B spending on lab tests demonstrates thatas 
expectedthe payment rate adjustments required by PAMA achieved savings for 
some lab tests that had payment rate reductions in 2019.  Prior to PAMA, OIG reports 
and other research showed that Medicare was paying significantly more than private 
payers for many lab tests.10  The new payment system implemented under PAMA 
more closely aligns Medicare payment rates with private payer rates.  In the coming 
years, payment rate reductions for many lab tests that are on the CLFS are expected 
to result in further savings for the Medicare program. 
However, not all tests on the CLFS had payment rate reductions in 2019.  This 
occurred for one of two reasons: (1) tests with payment rates that had already 
reached the rate required by PAMA did not require further reductions, or (2) tests that 
were new to the CLFS as of 2018 were not affected by the 2019 rate reductions 
required by PAMA.  Medicare spending increased for some of these tests that did not 
have payment rate reductions, including certain high-priced genetic tests, because of 
increased utilization of these tests.  Further, because this group of tests had relatively 
high payment rates, the increased spending for this group overtook the savings 
achieved by the PAMA rate reductions in 2019.   
Looking ahead, we anticipate that Medicare spending for lab tests in 2020 will be 
significantly affected by the COVID-19 pandemic, especially diagnostic testing for the 
novel coronavirus and other respiratory illnesses.  OIG has a body of oversight 
activities underway regarding COVID-19-related lab testing.  Additionally, OIG will 
continue to monitor the effect of the PAMA changes on Medicare spending.   
Data Brief: Despite Savings on Many Lab Tests in 2019, Total Medicare Spending Increased Slightly Because of Increased 
Utilization for Certain High-Priced Tests 
OEI-09-20-00450  Conclusion | 6  METHODOLOGY 
 
Data Analysis: We based this report on our analysis of Medicare claims data for lab 
tests performed in 2019 and reimbursed under the CLFS.  Through our analysis, we 
identified key statistics and emerging 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 2019 and compared that to the results from 2014 to 2018.  
  Top 25 lab tests.  We identified the top 25 lab tests (based on total spending 
for each procedure code) in 2019 and calculated total spending for these tests. 
We calculated the differences in Medicare spending from 2018 to 2019 for 
tests within the top 25.  We also examined spending patterns among two 
groups of tests: those that had PAMA-required reductions in payment rates 
and those that did not have payment rate reductions.  For each group, we 
calculated overall Medicare spending in 2019. 
  Analysis by test category.  We used Current Procedural Terminology (CPT) 
categories for all tests on the CLFS.  For Healthcare Common Procedure 
Coding System (HCPCS) Level II codes that are unique to the CLFS, we had 
CMS assign CPT categories to those codes.  We used CPT category definitions 
to identify genetic tests, which includes molecular pathology, multianalyte 
algorithmic assays (MAAAs), and genomic sequencing procedures (GSPs). 
Data Source: The claims data were 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.  
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.11  We did not include claims for physician interpretation of tests. 
Limitations: In 2014, 2015, 2018, and 2019, we analyzed the 16-month file, and in 
2016 and 2017, we analyzed the 17-month file.  As a result, analysis for 2016 and 
2017 used a set of claims that was marginally more complete than sets used for other 
reports and thus the totals for 2016 and 2017 are marginally higher than those 
reported for other years.  
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. 
 
Data Brief: Despite Savings on Many Lab Tests in 2019, Total Medicare Spending Increased Slightly Because of Increased 
Utilization for Certain High-Priced Tests 
OEI-09-20-00450  Methodology | 7   
APPENDIX A 
 
Medicare lab spending on genetic tests in 2019, by category  
Molecular Pathology  
Molecular pathology tests detect variants in genetic material and help doctors determine how patients will respond to certain 
treatments.  This category entered the CLFS in 2014 and has the greatest number of tests compared to other categories of 
genetic tests. 
 
Molecular pathology tests accounted for 62 percent  Spending on molecular pathology tests reached its highest 
of total Medicare spending on genetic tests in 2019.  point in 2019. 
 
  Spending increased by 74 percent in 2019, a  $849M
$360 million increase from 2018. 
  Volume increased by 345,000 units, from  $466M $488M
1.2 million in 2018 to about 1.6 million in 2019. 
$260M
  The number of test codes that Medicare paid for  $165M $162M
increased from 149 in 2018 to 174 in 2019.  
  Two tests (lines 6 and 12 in Exhibit 3) were among 
the top 25 lab tests in 2019.   2014 2015 2016 2017 2018 2019  
Multianalyte Algorithmic Assays  
Multianalyte algorithmic assays (MAAAs) combine multiple test results with patient information to yield a predictive score, such 
as recurrence of a cancer or a treatment response.  MAAAs entered the CLFS in 2015.   
Medicare saw a slight increase in spending on  Total spending on MAAAs continued to increase in 2019.  
MAAAs in 2019.  $463M
   $422M
  Spending increased by 10 percent in 2019, a 
$291M
$41 million increase from 2018. 
$216M
  Volume increased by 108,000 units, from 
484,000 units in 2018 to 592,000 units in 2019. 
  The number of test codes that Medicare paid for  $28M
increased from 24 in 2018 to 30 in 2019.  
  Two tests (lines 8 and 20 in Exhibit 2) were among  2015 2016 2017 2018 2019  
the top 25 lab tests in 2019.  
Genomic Sequencing Procedures 
Genomic sequencing procedures (GSPs) identify structural changes in genetic material and are often used to diagnose or 
manage inherited diseases.  GSPs entered the CLFS in 2015.  
Medicare spending on GSPs decreased in 2019.  Total spending on GSPs decreased for the first time in 2019.  
 
  Spending decreased by 20 percent in 2019, a  $59M
$12 million decrease from 2018.  $47M
  Volume increased by about 8,800 units, from 
61,000 units in 2018 to 70,000 units in 2019.    $20M
  Medicare paid for 26 test codes in 2019, as it did in  $13M
$1M
2018. 
  GSPs did not appear in the top 25 lab tests in 2019.  
2015 2016 2017 2018 2019
 
Source: OIG analysis of 20142019 spending on lab tests in Medicare Part B, 2020.
Data Brief: Despite Savings on Many Lab Tests in 2019, Total Medicare Spending Increased Slightly Because of Increased 
Utilization for Certain High-Priced Tests 
OEI-09-20-00450  Appendix A | 8  APPENDIX B 
   
Prior Office of Inspector General Reports on Medicare Spending and 
Payment Rates for Lab 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  OEI-09-18-00410  September 2018 
in 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  OEI-09-17-00140  September 2017 
in 2016:  Year 3 of Baseline Data 
Changing How Medicare Pays for Clinical Diagnostic  OEI-09-16-00100  September 2016 
Laboratory Tests:  An Update on CMS's Progress 
 
Medicare Payments for Clinical Diagnostic Laboratory Tests  OEI-09-16-00040  September 2016 
in 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  OEI-07-11-00010  June 2013 
Achieve Substantial Savings 
 
Variation in the Clinical Laboratory Fee Schedule   OEI-05-08-00400  July 2009 
Data Brief: Despite Savings on Many Lab Tests in 2019, Total Medicare Spending Increased Slightly Because of Increased 
Utilization for Certain High-Priced Tests 
OEI-09-20-00450  Appendix B | 9   
ACKNOWLEDGMENTS AND CONTACT 
 
 
Acknowledgments 
Kira Evsanaa served as the project leader for this study.  Others in the Office of 
Evaluation and Inspections who conducted the study include Chelsea Samuel and 
China Tantameng.  OIG staff who provided support include Mandy Brooks, 
Christine Moritz, and Michael Novello. 
This report was prepared under the direction of Blaine Collins, Regional Inspector 
General for Evaluation and Inspections in the San Francisco regional office, and 
Abby Amoroso and Michael Henry, Deputy Regional Inspectors General. 
Contact 
To obtain additional information concerning this report, contact the Office of Public 
Affairs at Public.Affairs@oig.hhs.gov.  OIG reports and other information can be found 
on the OIG website at oig.hhs.gov. 
Office of Inspector General 
U.S. Department of Health and Human Services 
330 Independence Avenue, SW 
Washington, DC 20201 
Data Brief: Despite Savings on Many Lab Tests in 2019, Total Medicare Spending Increased Slightly Because of Increased 
Utilization for Certain High-Priced Tests 
OEI-09-20-00450  Acknowledgments and Contact | 10  ENDNOTES 
 
 
1 Of the 17 tests with payment rate reductions, 16 tests were among the top 25 lab tests in 2018.  The remaining test is a 
high-priced genetic test (line 12 in Exhibit 3) that entered the top 25 lab tests in 2019.   
 
2 Originally, SSA  1834A(b)(3)(A) and (B), 42 U.S.C. 1395m-1(b)(3)(A) and (B), as set forth in PAMA, P.L. No. 113-93,  216(a)), 
provided that clinical diagnostic laboratory test payment shall not result in payment reduction greater than the applicable 
percent within the first 6 years.  See also 81 Fed. Reg. 41036, 4107980, and 41100 (June 23, 2016) (changing the phasing in of 
the payment reductions timetable to reflect the revised January 1, 2018, implementation date and memorializing the change at 
42 CFR 414.507(d)).  
3 Since 2018, Congress amended SSA 1834A(b)(3), 42 U.S.C. 1395m-1(b)(3), twice to delay the limits to payment rate 
reductionsmost recently by Coronavirus Aid, Relief, and Economic Security Act, P.L. No. 116-136,  3718(b), and earlier by 
Further Consolidated Appropriations Act, 2020, P.L. No. 116-94, Division N,  105(a)(2). 
4 Labs bill for each test on the CLFS using an HCPCS code, which we refer to as a procedure code.  The HCPCS is divided into 
two subsystems, referred to as Level I and Level II.  Level I HCPCS codes are composed of CPT codes.  The five character 
codes and descriptions included in this study are obtained from Current Procedural Terminology (CPT), copyright 
2018 by the American Medical Association (AMA).  CPT is developed by the AMA as a listing of descriptive terms and 
five character identifying codes and modifiers for reporting medical services and procedures.  Any use of CPT outside 
of this study should refer to the most current version of the Current Procedural Terminology available from AMA.  
Applicable FARS/DFARS apply.  Level II HCPCS codes are established by CMS primarily for items, supplies, and nonphysician 
services not covered by CPT codes. 
5 Payment rates for these tests did not change in 2019 because the rates were equal to the volume-weighted median.  The 
volume-weighed median is calculated by taking the median value of all private payer rates, weighted by test volume.  
See 81 Fed. Reg. 4107677.  
 
6 This ADLT is a genomic sequencing analysis test that performs a comprehensive gene analysis on solid tumors and provides 
clinically actionable information for medical providers and beneficiaries.  Foundation Medicine, FoundationOne CDX, 
https://www.foundationmedicine.com/test/foundationone-cdx.  Accessed on September 7, 2020. 
7 Foundation Medicines test (0037U) was approved under Criterion B, FDA cleared and approved, as stated in 
Section 1834A(d)(5)(B).  Additionally, this test is covered under the National Coverage Determination (NCD) for Next 
Generation Sequencing (NGS).  CMS Manual System, Pub 100-3 Medicare National Coverage Determinations, 
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2019Downloads/R215NCD.pdf.  Accessed on 
December 2, 2020. 
 
8 This test is part of a new category of tests known as the proprietary lab analyses (PLAs) tests, which includes a range of lab 
tests, including but not limited to genetic tests and some ADLTs.  This category of test codes was established by the American 
Medical Association (AMA) in response to PAMA.  
9 CMS, Advanced Diagnostic Laboratory Tests Under the Medicare CLFS.  Accessed at 
https://www.cms.gov/files/document/advanced-diagnostic-laboratory-tests-under-medicare-clfs.pdf on October 6, 2020. 
10 OIG, Comparing Lab Test Payment Rates: Medicare Could Achieve Substantial Savings (OEI-07-11-00010), June 2013.  See also 
OIG, Variation in The Clinical Laboratory Fee Schedule (OEI-05-08-00400), July 2009. 
 
11 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.  As we have noted, our analysis included only lab tests paid for 
under Medicares CLFS. 
 
Data Brief: Despite Savings on Many Lab Tests in 2019, Total Medicare Spending Increased Slightly Because of Increased 
Utilization for Certain High-Priced Tests 
OEI-09-20-00450  Endnotes | 11