Drug Testing in the OTP Bundle: How Separate Lab Claims Can Pay Twice

In opioid treatment program urine drug testing billing, a laboratory can make Medicare pay twice by separately billing for tests already covered by the program’s bundled payment. The treatment program receives payment for the episode, including toxicology, while the lab submits another claim for the covered testing. For someone inside the laboratory or treatment program, the telling connection is between the patient’s treatment week, the test performed and the money Medicare paid.

Pacific Toxicology Laboratories, known as PacTox, agreed to pay $1 million in July 2024 to resolve allegations of false Medicare claims for urine drug testing. The Justice Department alleged that separate lab billing made taxpayers pay again for certain patients’ tests the treatment program had already been paid to provide. The settlement resolved claims brought by a whistleblower.

How Should Laboratory Tests Be Bundled for Medicare?

For an opioid treatment program, Medicare includes toxicology testing in its payment for a treatment episode. The Medicare opioid treatment program benefit began on January 1, 2020. Its weekly payment combines the treatment medication with services such as dispensing and administration, substance use counseling, individual and group therapy, and drug testing.

Program enrollment and the patient’s treatment record establish which care falls within this benefit. Office-based opioid-use-disorder treatment has its own billing arrangements. The Centers for Medicare & Medicaid Services reserves the OTP codes for enrolled programs.

The episode lasts seven consecutive days and can begin on any day of the week. At least one qualifying drug or non-drug treatment service must be furnished during that period. The agency’s billing guidance identifies G2067 as the methadone weekly bundle and G2068 as the oral buprenorphine weekly bundle. G2074 covers the weekly bundle without the drug. Counseling, therapy and toxicology can therefore remain bundled during a week when the program administers no medication.

Medicare generally limits a patient’s weekly bundle to one payment for the period.

Both presumptive screening and definitive testing belong in the bundle when furnished as part of the opioid treatment program’s care. The Medicare Benefit Policy Manual expressly includes both. Sending that specimen out for confirmation does not take it out of the bundle.

Medicare OTP Bundled Drug Testing and the Separate Reference Lab Claim

When a methadone weekly payment and an outside laboratory drug screen claim cover testing already included in the program’s payment, Medicare can pay for the same test twice.

We line up the program’s weekly claim against the lab’s claim for the same patient. The performing laboratory, billing provider, test method and service date show what each business did and what it asked Medicare to pay.

On professional opioid treatment program claims, place of service code 58 identifies a nonresidential opioid treatment facility. An outside lab’s claim may identify presumptive testing with codes 80305 through 80307, or definitive testing with G0480 through G0483. Those lab codes describe the testing billed separately from the program’s weekly bundle.

The dates need particular attention. An opioid treatment program claim can use the first day of its standard weekly billing cycle as its service date. A laboratory test generally uses the specimen collection date. A comparison limited to identical dates can therefore miss a test that falls inside the paid treatment week. We follow the specimen into the episode it belongs to.

The payment record completes the comparison. A remittance shows how Medicare processed the claim, what it paid and what it adjusted.

What PacTox Admitted About Confirmatory Testing

PacTox admitted that it separately billed Medicare for confirmatory urine drug testing from January 1, 2020, through March 14, 2023, despite the bundled payment rule, according to the Justice Department’s settlement announcement. The government alleged that this billing resulted in duplicate payments for certain opioid-use-disorder patients.

An outside laboratory may have the confirmatory result and its own payment record. The treatment program holds the other side of the comparison: the patient’s care and the episode billed. We bring those accounts together.

The Earlier PacTox Complaint Followed a Different Money Trail

An earlier whistleblower complaint alleged that discounted testing bought referrals of patients covered by government health care programs. In that alleged arrangement, laboratories sold tests to physicians below commercial reimbursement rates. The physicians billed commercial insurers as though they had performed the testing themselves and kept the difference. In exchange, they referred government-insured patients to the laboratories, which billed those plans directly.

The complaint alleged that PacTox helped make the claim describe work at the physician’s office:

The complaint also alleged that those physicians lacked the equipment needed for the testing they billed. The later opioid treatment program settlement addressed separate confirmatory-test billing after the Medicare bundle began. Each account identifies a different decision inside the business: where to send the patient, who performed the test, or who billed for care already covered.

When Are Toxicology Tests Unnecessary?

Toxicology tests are unnecessary when they lack a patient-specific medical reason. That can include broad panels and repeat testing ordered through a routine disconnected from the patient’s care. Medicare’s laboratory documentation guidance requires evidence of the treating provider’s intent to order and the medical necessity of the tests, including services ordered through a standing protocol.

The earlier PacTox complaint alleged a standing-order practice:

In the complaint’s account, a negative screen became the instruction for more testing. The clinical reason for that additional work is what we examine with the insider who knows how the orders were set up.

A 2021 review in The Journal of Family Practice, Urine Drug Screening: A Guide to Monitoring Tx With Controlled Substances, describes how financial interests can drive broad panels, excessive frequency and unnecessary confirmation. It also explains the clinical difference between rapid immunoassay screening and confirmatory chromatography with mass spectrometry.

Immunoassays can produce false-positive and false-negative results. The patient’s circumstances and the test’s limitations give a result its meaning. Patient-specific testing decisions and payment for the treatment episode are separate questions that both belong in the examination.

Can Specimen Validity Testing Be Billed Separately?

Medicare treats testing performed to establish a urine specimen’s validity as included in the drug-testing service. That work checks whether the sample was diluted or adulterated.

Bluewater Toxicology’s 2021 settlement addressed allegations that it separately billed Medicare for specimen validity testing despite guidance against doing so. The government also alleged that Bluewater billed for definitive testing of 22 or more drug classes, the level described by code G0483, when it tested fewer. Other claims lacked adequate documentation of the treating physician’s intent to order, the government alleged.

Those allegations identify different ways a laboratory claim can outrun the work it supports: a quality-control task billed separately, a code claiming more drug classes, or an order the treatment record cannot support. The opioid treatment program comparison adds another question: whether the treatment program’s payment already covered the toxicology service.

The Records That Connect the Test to the Money

We work with you to connect the patient’s treatment week, the laboratory’s orders and results, and the claims and payments behind them.

The documentation problem reaches well beyond opioid treatment programs. An HHS inspector general audit covering 2016 through 2020 described approximately $3 billion in Medicare Part B payments for 17.1 million definitive drug-testing services, mostly for patients undergoing pain management. It reported that reviews by the Centers for Medicare & Medicaid Services found overpayments tied to missing or inadequate risk assessments, support for testing frequency and medical necessity, and evidence of a physician’s order. Those are concrete gaps for a laboratory or treatment insider to recognize.

We examine how the testing and billing instructions worked alongside those records. Your knowledge of who chose the testing, who handled the claims and how the business responded to billing questions can connect the transactions to decisions inside the company. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

When Your Lab Bills for the Program’s Tests

If you work in laboratory billing, opioid treatment program operations or healthcare compliance and know how covered tests became separate Medicare claims, speak to our whistleblower experts about building your strongest laboratory whistleblower case. We connect the treatment episode, the laboratory’s claims and the decisions behind them, bring in laboratory fraud whistleblower lawyers who understand bundled payments, and stay beside you through the case.