Three unrecommended preventive services cost Medicare $325 million annually

May 13, 2021
by Robin Lasky, Contributing Reporter
Payments for seven medically unsupported services account for up to $478 million in Medicare spending a year, and of those services, the bulk of it could be attributed to just three.

The new findings come from a study conducted by researchers at UCLA and published this month in the Journal of General Internal Medicine. Their objective was to shed some light on the degree to which Medicare waste results from payments for unrecommended low-value or otherwise harmful services.

To do this, they looked at seven patient-specific services that could be sufficiently identified using the information compiled by National Ambulatory Medical Care Survey (NAMCS) in which the U.S. Preventive Services Task Force (USPSTF) has assigned a D rating.

“The Grade D designation for a particular service requires sound evidence that the service either offers net harm or offers no net benefit to asymptomatic patients," the authors wrote. "Grade D services, therefore, are among the most rigorously developed lists of low-value services to target for reduction."

Of the $478 million the researchers concluded could be saved by excluding coverage for these seven services, just three of them accounted for $325 million in annual Medicare payments. The three services that had the greatest impact on spending included: Screening for asymptomatic bacteriuria in non-pregnant women, Vitamin D supplementation for fracture prevention in postmenopausal women, and screening via colonoscopy or sigmoidoscopy for colon cancer in adults 85 years and older.

Information on indicates that two out of these three procedures, asymptomatic bacteriuria screening and Vitamin D supplementation, may already fall under explicit coverage exclusions or otherwise be subject to strict coverage limitations.

“We did not examine whether these services were explicitly excluded from Medicare coverage," study author, Dr. Carlos Oronce, told HCB News. "Therefore one of the limitations is that we were unable to determine if spending on these services fell onto patients as a full out-of-pocket expense or was covered by Medicare."

This may raise questions as to what extent the authors of the study have identified services that ought to be excluded from coverage as a cost-saving measure, rather than having identified improper payments by Medicare for uncovered services, or out-of-pocket payments by individuals or private commercial carriers.

For the year 2020, total improper payments by Medicare are estimated to have exceeded $42 billion.

The issue of waste, and specifically payments for low-value medical services, is by no means limited to government provided healthcare programs. For instance, a 2020 survey similarly found that more than $5.5 billion is wasted annually by commercial insurance providers arising from payments for low-value services.

Roughly 25% of overall U.S. healthcare spending is wasted according to some estimates. Waste falls into a variety of categories within healthcare, and given how consolidated, interconnected, and complex the U.S. healthcare system is, attempts to ameliorate waste in one area may potentially produce more of it in another.

As to what the $478 million ultimately represents, in light of the uncertainty surrounding payment and Medicare reimbursement, the authors believe there is more work to be done.

“It is possible that Medicare or supplemental commercial insurers did not pay for a portion of these services, and that some may have led to higher out-of-pocket spending by the patient," said Oronce. "Our work should serve as an important starting point, but future studies should use alternate sources of data (such as claims data) to confirm our spending estimates.”