COVID-19 Tests Drive Increased Medicare Part B Spending on Lab Tests in 2020

A new report on Medicare spending for laboratory tests, released by the U.S. Department of Health and Human Services Office of the Inspector General (OIG), has found that Medicare Part B spending on laboratory tests in 2020 increased significantly due to spending on COVID-19 tests. Overall spending increased from $7.7 billion in 2019 to $8.0 billion in 2020, a 4-percent increase. 

Ordinarily, spending increases of this size could complicate efforts to reform the way Medicare prices laboratory tests, a reform ASCP supports. But $1.5 billion of the overall spending was on COVID-19 tests, including $1 billion on high-throughput COVID-19 tests--the Number 1 by spending.

Aside from COVID-19 tests, spending for all other tests decreased by $1.2 billion in 2020. This decline in spending was driven by a sharp decline in non-COVID-19 tests during the early months of the pandemic. The OIG noted in the report that non-COVID testing was 53-percent lower in April 2020 than in April 2019. The OIG also stated that reductions in payment rates for certain laboratory tests, as required by the Protecting Access to Medicare Act, also was responsible to the reduced spending in non-COVID testing.  
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