A Medicare administrative contractor has sent a cease-and-desist letter to a well-known diagnostic reimbursement expert containing lab test pricing and coding information that reveals instances where CMS may be overpaying for certain molecular tests.
Palmetto GBA sent the letter to Bruce Quinn, asking him to delete information from a public blog and his own files. Palmetto's lawyer asserts that the information was included in a document, known as a master edit file (MEF), that is the contractor's intellectual property.
However, according to Quinn and a market analyst's report, the file was obtained through a Freedom of Information Act (FOIA) request to CMS, meaning the agency has already deemed the release of the information to be in the public interest. Quinn asserts that the analysis he has done using the MEF data demonstrates its value to the public. The information is also of competitive interest to labs who often face a difficult reimbursement environment and are under pressure to lower costs.
However, FOIA grants the public the right to request records within federal agencies if the data doesn't fall under one of nine exemptions, for example, information that invades personal privacy or trade secrets obtained outside of the government. Quinn's experience with Palmetto, which CMS has said it is looking into, raises questions about whether a government contractor can legally restrict public access to information obtained under FOIA, particularly a document that contains information about how the government disburses taxpayer funds.
Quinn's exchange with the MAC comes at a time when rapid growth in the genetic testing industry is increasing Medicare spending on laboratory testing. HHS' Office of Inspector General recently reported that Medicare spending on lab tests in 2018 was $7.6 billion, up 6% from $7.1 billion in 2017. The OIG noted that although payment rates decreased for 75% of lab tests, the savings were erased largely by greater spending on genetic tests, which was approximately $1 billion in 2018 compared to around $500 million in 2017.
In step with increasing genetic testing expenditures, the OIG is also ramping up efforts to track fraudulent billing practices in the space. For example, OIG and its law enforcement partners last year brought charges against 35 individuals who had illegally billed Medicare more than $2.1 billion for genetic tests.
Moreover, Palmetto's actions seem out of step with CMS's recognition that greater pricing transparency in the healthcare sector is in the public interest. In January 2014, CMS instituted a new policy where it would determine on a case-by-case basis whether to grant FOIA requests seeking information on Medicare payments to physicians. In making such determinations, CMS said it would weigh whether the privacy interests of individual doctors outweighed the public's interest in having access to this information.
After its FOIA policy took effect in March 2014, CMS received several requests for the release of physician payment data, at which point the agency decided it would benefit the public by regularly publishing Medicare payment for services — including lab tests — furnished by doctors and other healthcare professionals.
"The Department concluded that the data to be released would assist the public's understanding of Medicare fraud, waste, and abuse, as well as shed light on payments to physicians for services furnished to Medicare beneficiaries, which are governed by statutory requirements that CMS must follow," CMS wrote in an April 2014 letter to American Medical Association CEO James Madara informing him of this change.
CMS further explained that the information it would publish would identify service providers by their National Provider Identifier (NPI) and the services they billed Medicare for by Healthcare Common Procedure Coding System codes (i.e. CPT codes), and detail the average submitted charges, average allowed amount, the average Medicare payment, and the number of beneficiaries who received the service.
Quinn maintains that the activities for which he received a cease-and-desist letter from Palmetto are in line with CMS' policies aimed at price transparency and the agency's goals to shed light on Medicare waste and fraud. Furthermore, he noted that most of the information in the document in question is already publicly available, and the information that is not yet public will eventually become so when CMS publishes Medicare payment information for physician and lab services, as it has annually since 2015. (Each year, the released payment data is for two calendar years prior.)
"This makes it nonsensical to say that Palmetto's payment rates to labs are entirely a business secret of Palmetto," Quinn said.