Drug-screening costs excessive, audit finds

TRENTON – A state audit released today urges the state Department of Human Services to re-evaluate its reimbursement rates for Medicaid drug screenings because of what the audit terms excessive drug screenings in some cases.

The state reimburses at a rate of $5.20 per drug class, and providers can screen for up to 10 drug classes per recipient per day.

That reimbursement rate seems to be “generous,’’ according to the audit, which said by comparison that New York has a maximum rate of $1.25 per unit. In Pennsylvania, the rate is $3 per unit.

“We estimate that drug screening costs during fiscal year 2010 would have been reduced by $4.9 million had the division reimbursed $5.20 for the first drug class tested and $3 for each additional drug class,’’ the audit stated.

As a result, according to the audit, from July 1, 2008 to March 6 of this year, drug screening claims in New Jersey totaled $20.3 million for 70,000 recipients.

And drug screening claims have risen from $1.5 million for 13,500 recipients in fiscal year 2003 to $8.4 million for 27,000 recipients in fiscal year 2011, the audit found.

The audit found that the Department’s policy concerning the frequency of drug screenings could be better than it is.  In addition, policies vary greatly from facility to facility.

Also, providers consistently bill Medicaid at or near the maximum of 10 drug service units.

Of 452,000 drug screening claims during the period audited, 356,000 were for eight or more drug classes. Nine providers accounted for $16.9 million of $20.3 million in such claims.

Screening for 10 drug classes is reasonable at the beginning of a patient’s treatment, but consistently screening for all 10 is questionable as time goes on, the audit reported.

On-site “instant’’ screening cups as opposed to laboratory testing would also save money, the audit stated. Such cups can test for up to 12 classes of drugs, and only positive results would require follow-up by a lab, according to the audit.

One laboratory, which the report did not identify, accounted for $1 million of the $1.2 million paid for additional drug screening procedures during the period audited.

Acknowledging that not all of the $1 million was billed inappropriately, the audit nevertheless suggested some of the billings were excessive.

In response, the Department of Human Services said that it will institute many of the recommended changes, but said on-site “instant’’ screening is the prerogative of each testing center and can’t be mandated by the state Division of Medical Assistance.

Earlier stories:

State audit raises issues about Medicaid providers who owe money

Medicaid hearing aid services draw auditor’s attention

  Drug-screening costs excessive, audit finds