01-004 Specimen Validity Findings of Medical Review

Noridian Healthcare Solutions, LLC, as the Supplemental Medical Review Contractor (SMRC) for the CMS, has conducted post-payment review of claims for Medicare Specimen Validity services billed on dates of service from January 1, 2017 through December 31, 2017. Below are the review results:

Project Title Error
01-004 Specimen Validity 78%


The Office of Inspector General (OIG), under report A-09-16-02034 dated February 2018, found that payments made to providers for specimen validity tests did not comply with Medicare billing requirements. The report outlined that providers did not follow existing Medicare guidance, and the CMS system edits were not adequate to prevent payment for specimen validity tests billed in combination with urine drug tests. The recommendations from the OIG included, (1) Direct the Medicare contractors to recover the $66.3 million in identified improper payments and (2) Strengthen its system edits to prevent improper payments for specimen validity tests, and instruct the Medicare contractors to educate providers on proper billing for specimen validity and urine drug tests, which could result in savings of an estimated $12.1 million over a five-year period.

Reason for Review

In response to the OIG report, the CMS tasked Noridian, as the SMRC, to perform data analysis and conduct medical review.

The SMRC will perform data analysis and medically review claims to determine if the specimen validity testing, when billed with urine drug tests, was medically reasonable and necessary. Medicare does not pay for separately billed specimen validity tests when billed with associated urine drug tests.

Noridian is reviewing claims for identified beneficiaries selected providers, and the review cannot be completed without additional information. The request for documentation will be sent to the provider that submitted the claim for the laboratory test. If the provider submitting the claim was an independent laboratory and, the documentation returned was insufficient, per the Internet Only Manual (IOM) Publication 100-08, Chapter 3, Section, the SMRC will solicit information from the ordering/referring provider.

Common Reasons for Denial

  • No Response to the Documentation Request
    • CMS Internet-Only Manual (IOM), Medicare Program Integrity Manual, Chapter 3, Section (B) requires providers/suppliers to respond to requests for documentation within 45 calendar days of the additional documentation request. The documentation was not submitted or not submitted timely.
  • Insufficient Response to the Documentation Request
    • CMS IOM, Medicare Program Integrity Manual, Chapter 3, Section (C) indicates that when, “the submitted documentation lacks evidence that the benefit category requirements were met, the reviewer shall issue a benefit category denial.”
  • Bundled Service
    • CMS IOM, Medicare Claims Processing Manual, Chapter 12, Section 20.3, relays that, “There are a number of services/supplies that are covered under Medicare and that have HCPCS codes, but they are services for which Medicare bundles payment into the payment for other related services.” The provider can not bill separately for those services.
  • Physician Order
    • Code of Federal Regulations Title 42, Section 410.32(a) mandates “All diagnostic x-ray tests, diagnostic laboratory tests, and other diagnostic tests must be ordered by the physician who is treating the beneficiary…”
  • Medical Necessity
    • The Social Security Act (SSA) Title XVIII, Section 1862(a)(1)(a) provides the guidance that, “no payment may be made under part A or part B for any expenses incurred for items or services which, are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”


Last Updated Jan 28, 2022