Medicare’s Epilepsy Panel Problem: A Naming Analysis of Labs Billing 81419, 81408, and 81443
Executive Summary
Medicare Part B has experienced a dramatic surge in payments for CPT 81419 (epilepsy gene panel) — from 41 payments nationwide in 2022 to 30,377 payments and $74 million just two years later. This pattern mirrors the earlier wave of abuse around 81408 (rare gene sequencing) that prompted OIG investigations and $888M in improper payments.
A close review of lab names billing these codes reveals a distinctive profile: generic or inflated names, heavy LLC usage, no locality identifiers, and lookalike branding — all consistent with shell labs designed to rapidly capture Medicare dollars.
For comparison, we analyzed 973 labs billing 81443 (thyroid stimulating hormone, $16), a common and low-risk test. These names show a markedly different profile: they include major national labs, hospital-affiliated labs, and regional providers with established reputations.
1. Background
Medicare Part B pays for clinical laboratory tests on a fee-for-service basis, with few real-time edits or prior authorization requirements. This “pay and chase” model has historically been vulnerable to sudden surges in utilization when a code is unguarded — as seen with 81408 between 2018–2021.
The new concern is CPT 81419, an epilepsy gene panel. Despite being rarely used until recently, its utilization skyrocketed in 2023 and 2024, concentrated in Novitas and FCSO MAC regions
DIHP 81419 blog
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2. Methodology
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81419 dataset: 26 unique labs billing this code in 2023.
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81408 dataset: 74 unique labs billing this code in 2020, at the peak of its abuse cycle.
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81443 dataset: 973 unique labs billing this routine $16 test in 2023, used as a baseline for “normal” lab naming patterns.
Each list was analyzed for:
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Legal form (LLC vs. Inc.)
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Use of prestige or marketing words (“Elite,” “Express,” “Global”)
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Use of genomics/biotech buzzwords (“Gene,” “Bio,” “Diagnostics”)
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Geographic or ownership identifiers
3. Findings
A. 81419 Epilepsy Panel Labs (2023)
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58% are LLCs, suggesting easy setup/dissolution.
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High prevalence of prestige branding: “Elite,” “Global,” “Vanguard” — names that project importance without revealing a real-world presence.
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Lookalike risk: “Elite Bio Reference Laboratory” echoes BioReference (a major national lab).
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Almost no locality: None reference a city, region, or hospital system, making them placeless.
Representative examples:
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Yeva Diagnostics
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Global Gene Labs, LLC
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Elite Bio Reference Laboratory, LLC
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Ultra Gene, LLC
B. 81408 Rare Gene Sequencing Labs (2020)
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Even higher LLC rate (74%), confirming “pop-up shell” behavior.
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Plainer names: Fewer biotech buzzwords, more generic business titles (Best Choice Laboratory LLC, Oakwood Lab Services LLC).
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Known fraud history: OIG has documented massive improper payments from this code cycle, confirming that this pattern represents high risk.
C. 81443 TSH Labs (2023)
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Diverse but legitimate mix: Quest, LabCorp, hospital labs, regional systems, academic centers.
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Higher Inc. rate (41%) and lower LLC rate (30%) — suggesting long-standing corporate structures.
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Locality common: Many names reference geography or parent institutions (e.g., University Medical Center Lab, Midwest Clinical Laboratory).
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Minimal marketing jargon: Almost no “Elite” or “Express” (0.2% combined), very low use of “Gene” or “Bio” (2–3%).
4. Comparative Table
| Feature | 81408 (2020) | 81419 (2023) | 81443 (Routine) |
|---|---|---|---|
| Number of Labs | 74 | 26 | 973 |
| LLC usage | 74% | 58% | 30% |
| Prestige words | Low | High | Very Low |
| Genomics buzzwords | Moderate (13%) | High (19%) | Rare (2%) |
| Geographic identity | Rare | Rare | Common |
| Known fraud risk | Confirmed by OIG | Emerging risk | Low |
5. Interpretation
The naming pattern itself is a strong indicator of risk:
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81419 labs look more like marketing constructs than medical institutions.
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Their profile closely parallels the labs that fueled the 81408 fraud wave.
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In contrast, 81443 labs resemble real-world providers with geographic anchoring and brand equity, providing a baseline for what “normal” looks like.
6. Policy Implications
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Early warning system: CMS could use naming analytics as a heuristic signal. Labs with formulaic, placeless names — especially LLCs — should be flagged for additional review.
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Targeted prepayment edits: As with 81408, Novitas and FCSO regions appear to be the locus of uncontrolled growth and should receive earlier interventions.
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Transparency and reporting: Regular publication of top billing labs per CPT code could let watchdog groups and researchers catch anomalous patterns months (not years) earlier.
Conclusion
The explosive growth of 81419 billing — funneled through a small number of suspiciously named labs — represents a replay of the 81408 fraud scenario. Medicare cannot afford to wait for another OIG report after hundreds of millions are spent. Naming analysis, combined with real-time data monitoring, can provide a low-cost, high-yield early detection tool to protect the Part B trust fund.
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