01-108 OIG Genetic Testing Findings of Medical Review

Noridian Healthcare Solutions, LLC, (Noridian), as the Supplemental Medical Review Contractor (SMRC) for the Centers for Medicare and Medicaid (CMS), has conducted post-payment review of claims for Medicare Genetic Testing Current Procedural Terminology (CPT) code, 81408, billed on dates of service from January 1, 2021, through December 31, 2021. Below are the review results:

Project ID Project Title Error Rate for Reviewed Claims No Response to ADR Denials
01-108 OIG Genetic Testing 100% 67%


Genetic testing uses molecular pathology technology that identifies changes in genes, chromosomes, or proteins. The gene specific coding system was updated after January 1, 2013, to include the test, analytic services and processes performed to reduce or eliminate stacking of codes in billing. This resulted in five subgroups of Current Procedural Terminology (CPT) codes which includes Tier 1-Analyte Specific code; a single test or procedure corresponds to a single CPT code and Tier 2-Rare disease and low volume molecular pathology services. Tier 2 includes CPT code 81408, “molecular pathology procedure, Level 9.” An example of a level 9 molecular pathology procedure includes analysis of >50 exons in a single gene by DNA sequence analysis. An Exon is a segment of DNA or RNA containing information coding for a protein or peptide sequence.

The Office of Inspector General (OIG), published a report (A-09-22-03010) titled, CMS’s Oversight of Medicare Payments for The Highest Paid Molecular Pathology Genetic Test Was Not Adequate to Reduce the Risk of Up To $888 Million In Improper Payments. The OIG analyzed 450,000 Medicare Part B claims billed with CPT code 81408. Based on the results, up to $888.2 million Medicare payments were at risk for improper payment.

Reason for Review

The SMRC was tasked to perform data analysis and conduct a coding review for claims billed with the Genetic Testing code 81408 “molecular pathology procedure, Level 9” with DOS January 1, 2021, through December 31, 2021.

The SMRC conducted medical record reviews in accordance with applicable waivers/flexibilities/statutory, regulatory, sub-regulatory, and coding guidance.

Common Reasons for Denial

  • Non-Response to the ADR
    • Refer to Internet-Only Manual Publication (Pub.) 100-08, Chapter 3, Section, 42 CFR 424.5(a)(6) and Social Security Act Title XVIII, Sections 1815(a), 1833(e), and 1862(a)(1)(A). No medical record documentation was received. The Medicare Program Integrity Manual (PIM) Pub. 100-08, Chapter 3, Section requires providers to respond to requests for documentation within 45 calendar days of the additional documentation request for the dates of service under review. The documentation was not submitted from the provider to support the claim as requested by the additional documentation request (ADR).
  • Incomplete and/or Insufficient Documentation
    • 42 CFR 424.5(a)(6), Social Security Act 1862(a)(1)(A), Social Security Act 1833(e). The documentation was insufficient to support a diagnosis code as indicated in the CPT code description for the genes tested. The documentation submitted was insufficient to determine the molecular testing related to CPT code 81408.


Social Security Act (SSA), Title XVIII

  • §1815(a) Payment to Providers of Services
  • §1833(e) Payment of Benefits
  • §1861(s)(1) Physician Services
  • §1861(s)(3) Medical and Other Health Services
  • §1862(a)(1)(A) Exclusions from Coverage and Medicare as Secondary Payer
  • §1879(a)(1) Limitation on Liability of Beneficiary where Medicare Claims are Disallowed

42 Code of Federal Regulations (CFR)

  • §411.15(k)(1) Any services that are not reasonable and necessary
  • §414.502(1) Definitions.
  • §424.5(a)(6) Conditions for Medicare Payment-Basic Conditions, Sufficient Information

IOM, Medicare Benefit Policy Manual (MBPM), Pub. 100-02

  • Ch. 16 General Exclusion from Coverage

IOM, Medicare Claims Processing Manual (MCPM), Pub.100-04

  • Ch. 1 General Billing Requirements
  • Ch. 12, §60 Payment for Pathology Services
  • Ch. 23, §20.9 National Correct Coding Initiative (NCCI)
  • Ch. 23, § Instructions for Codes with Modifiers (A/B MACs (B) Only)
  • Ch. 26, §10.5 Place of Service Codes (POS) and Definitions

IOM, Medicare Program Integrity Manual (MPIM), Pub. 100-08

  • Ch. 3 Verifying Potential Errors and Taking Corrective Actions
  • Ch. 3, § Requested Records Not Received
  • Ch. 3, § Review Timeliness Requirements
  • Ch. 3, § Signature Requirements
  • Ch. 3 § Coding Determinations

Local Coverage Article (LCA)

  • A58918 Billing and Coding: Molecular Pathology and Genetic Testing
  • A58917 Billing and Coding: Molecular Pathology and Genetic Testing
  • A58812 Billing and Coding: Pharmacogenomics Testing
  • A58801 Billing and Coding: Pharmacogenomics Testing
  • A57451 Billing and Coding: Molecular Pathology Procedures


Last Updated Jun 7, 2024