A recent drug-testing settlement negotiation between Medicare and Millennium Health LLC, the largest drug-testing lab in the United States, has caused a host of problems beyond those incurred by Millennium, the defendant in the suit. Medicare alleged that, after a three-year investigation, Millennium billed the federal government for non-essential tests, primarily for Medicare clients undergoing pain management treatment. This unnecessary testing may have contributed to the 2,000% increase in Medicare spending on drug testing over the last six years. Millennium could face paying up to $250 million in damages.
Because of the astronomical increase in federal spending for Medicare clients undergoing pain management treatment, Medicare agencies, health care providers, and drug testing laboratories are scrambling to find a solution that allows patients to get the care they need without allowing labs to take advantage of federal spending.
Drug-testing labs get paid by Medicare for each substance they test. Millennium has been accused of running unnecessary tests to increase their payout and performing unwarranted high-tech testing that is consequently more costly. Labs can screen for substances ordered by the physician, and they can perform further high-tech tests to confirm any abnormal results. Medicare claims that Millennium not only ordered an exorbitant amount of irrelevant tests per substance (i.e. testing senior citizens for party drugs like MDMA), but that they ran high-tech confirmation tests on normal samples that should not have been subjected to further lab testing. Medicare spending for simple tests has not gone up in recent years nearly as much as the exponential increase in high-tech testing.
Since the settlement negotiation between Medicare and Millennium is still in process, solving and preventing recurrence is also up in the air. Medicare has proposed billing caps on certain types of testing. These caps would help taxpayers, but cut into laboratory income. Providers and labs who have acquired expensive equipment in order to perform the high-tech testing would see a decrease in payment as well, in some cases as much as losing around 75% per test. Different parties have considered changing the payment structure to bundling the cost of testing instead of paying per tested substance.
Lab staff are concerned that changes in billing and high-tech testing would limit growth, as Medicare is one of their largest sources of revenue. Health care providers are concerned that their patient care may suffer due to a decrease in available tests. Pain management patients need to be tested for drug abuse, noncompliance (which can indicate they are selling their medications), addiction, and/or overdose, and some of the high-tech testing allows more quantitative analysis that helps providers make informed treatment decisions.
Millennium is working with Medicare to resolve the consequences of their infractions. Hopefully their resolution will evoke a mutually beneficial policy change that will help economic growth and patient care without exhausting federal spending.