OIG reviews MCOs process for verifying laboratories carry proper certification

The OIG recently inspected 16 managed care organizations (MCOs) to review their process for verifying a laboratory service provider’s Clinical Laboratory Improvement Amendments (CLIA) certification.

Inspectors determined that of the 16 reviewed MCOs, 13 had developed a process for obtaining a provider’s CLIA certificate during the facility’s inclusion in the MCOs provider network and a method to reverify proper certification every two years. Additionally, a majority of the MCOs showed a process in place to verify credentials, but concern remains that insurers do not follow a consistent process to:

  • Obtain and maintain current provider CLIA certificates.
  • Deny claims from laboratories with expired CLIA certificates.
  • Deny claims from providers that billed for procedures not covered by their CLIA certificate.

The OIG Inspections team recommended best practices to each MCO’s management team to help them maintain the appropriate records. As a result, each insurer has indicated they are in the process of implementing the following:

  • Ensuring they obtain and maintain the current CLIA certificate for each laboratory in its provider network billing CLIA procedure codes.
  • Using the information provided by HHSC to develop processes to ensure the lab certification codes listed on providers’ CLIA certificates correspond to procedure codes in their claims payer system.
  • Ensuring their claims payer system denies claims for procedure codes that do not correspond to the laboratory certificate codes listed on a provider’s CLIA certificate.

CLIA certification verifies that laboratory services providers involved in health care treatment or medical diagnosis understand the federal regulations related to their services. Facilities that are not correctly certified are not eligible for reimbursement from Medicaid and should have submitted claims denied. To ensure the use of certified laboratories, MCOs are responsible for establishing a procedure that verifies that facilities carry the proper certification.

This inspection was prompted by the OIG’s discovery that laboratories had incorrectly billed Medicaid and received payment for procedure codes not covered by the laboratory’s CLIA certificate. With this information, the OIG determined that the payment of incorrect claims indicated a possible systemic issue among MCOs.

For the complete series of four inspection reports, visit the OIG website.