Opportunities Exist for CMS and Its Medicare Contractors To Strengthen Program Safeguards To Prevent and Detect Improper Payments for Drug Testing Services

Patients in active treatment for substance use disorder may also be treated for a variety of medical conditions. Medicare Part B covers these patients’ drug testing services when reasonable and necessary. For 2019, Medicare paid $180 million for such services provided to 274,000 beneficiaries with substance use disorders nationwide. Although the 2019 Medicare fee-for-service improper payment rate was 7.3 percent, the improper payment rate was 58.9 percent for the drug test with the highest Medicare fee schedule amount. We conducted this audit to evaluate how the Centers for Medicare & Medicaid Services (CMS) and its Medicare contractors addressed the risk for improper payments for drug testing services. Our objective was to assess the Medicare contractors’ program safeguards for ensuring that Medicare claims for drug testing services for beneficiaries with substance use disorders comply with Medicare requirements.Our audit covered Medicare Part B claims for drug testing services provided in 2019 for beneficiaries with substance use disorders. We interviewed CMS officials and reviewed requirements for drug testing services in all seven Medicare contractors’ Local Coverage Determinations (LCDs). We also interviewed staff from seven selected laboratories and analyzed claims data to determine the potential impact of weaknesses we identified.