Inappropriate Laboratory Testing: Significant Waste Quantified by a Large-Scale Year-Long Study of Medicare and Commercial Payer Reimbursement.

ABSTRACT

CONTEXT.­ Laboratory testing, beyond what is essential for managing health, is considered low-value care, posing patient risks and wasting resources. Measuring excess testing on a national level is crucial to identify waste and optimize healthcare resource allocation for maximum impact. OBJECTIVE.­ To measure inappropriate laboratory testing and its cost across Medicare and many US commercial payers. DESIGN.­ A retrospective analysis on 2019 claims data measured the frequency of 4 commonly used laboratory tests among 64 million individuals with Medicare and 168 million with commercial insurance. Tests included 25-hydroxy vitamin D, prostate-specific antigen, lipid panel, and hemoglobin A1c. Clinical guidelines, medical literature, and payer recommendations were used to determine appropriate testing frequencies. Costs of excessive testing were calculated using the 2019 clinical lab fee schedule. A targeted analysis of 2022 data confirmed 2019 trends. RESULTS.­ Analysis of ∼84 million tests from ∼1 billion outpatient test claim records revealed that 7% to 51% of tests exceeded recommended frequencies, with some egregious overuse for example hemoglobin-A1c or prostate-specific antigen every week. The conservative cost estimate for 4 excess tests surpassed $350 million. CONCLUSIONS.­ This extensive study, involving 232 million people, found that 14.4 million of 60.5 million individuals (23.8%) tested had undergone excessive laboratory testing, with likely little benefit and possible harm. Extrapolating findings to all laboratory testing suggests that Medicare alone may have incurred direct excess expenses from $1.95 to $3.28 billion in 2019, without factoring the hidden costs of excessive testing (eg, downstream care). Addressing unnecessary testing is crucial to lowering costs and redirecting resources for greater patient benefit.