Doctors Charging Seniors for Unnecessary Drug Tests, According to Study

By Paul Gaita 11/12/14

The Wall Street Journal and the New York Times showed how doctors are making millions while forcing seniors to take drug tests for cocaine and PCP.

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That's not the PCP I remember.

The Wall Street Journal has found that pain management doctors are reaping millions of dollars by charging Medicare for warrantless drug tests on senior patients for substances like PCP and cocaine.

Analysis of payment data conducted in 2012 found that Medicare has spent $445 million on tests for such drugs, which marks an increase of 1,423% since 2007. One company, the San Diego-based Millennium Laboratories, received $190 million from Medicare that year, including $4.5 million for PCP tests alone, the largest number of such tests conducted by any other California company.

The Journal report comes on the heels of similar findings by the New York Times this year, which showed that of the 880,000 doctors who accept Medicare coverage, only 2% account for about a quarter of all total payments, which is estimated at $15 billion. This does not include an additional $13.5 billion received by clinical laboratories and ambulance services.

As with the Journal report, the Times story found that high-priced tests, often conducted in lieu of lower-cost options, were the primary source of the windfall. In the case of the drug tests, doctors appear to be conducting these more expensive tests instead of simple urine tests, which Medicare capped four years ago for charges of overbilling.

However, these tests are designed to determine the presence of illegal drugs including marijuana, heroin, and cocaine. A 2012 survey from the Substance Abuse and Mental Health Services Administration found that about 1 in 1,000 seniors use such substances, however, prescription drug abuse among the elderly is another story altogether).

Consumer Watchdog Executive Director Carmen Balber confirmed that charges like these have become an all-too-common occurrence. “Doctors like to blame patients and lawsuits for the proliferation of unnecessary tests and procedures, but the truth is that more tests mean more revenue,” Balber said.

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Paul Gaita lives in Los Angeles. He has contributed to the Los Angeles Times, Variety, LA Weekly, and The Los Angeles Beat, among many other publications and websites.