The cups of urine travel by express mail to the ComprehensivePain Specialists lab in an industrial park in Brentwood, Tenn., notfar from Nashville. Most days bring more than 700 of the littlesealed cups from clinics across 10 states, wrapped in red-taggedwaste bags. The network treats about 48,000 people each month, andmany will be tested for drugs.

Gloved lab techs keep busy inside the cavernous facility, pipingsmaller urine samples into tubes. First there are tests to detectopiates that patients have been prescribed by CPS doctors. A secondset identifies a wide range of drugs, both legal and illegal, inthe urine. The doctors’ orders are displayed on computer screensand tracked by electronic medical records. Test results go back tothe clinics in four to five days. The urine ends up stored for amonth inside a massive walk-in refrigerator.

The high-tech testing lab’s raw material has become liquid goldfor the doctors who own Comprehensive Pain Specialists. Thistesting process, driven by the nation’s epidemic of painkiller addiction, generatesprofits across the doctor-owned network of 54 clinics, the largestpain-treatment practice in the Southeast. Medicare paid the companyat least $11 million for urine and related tests in 2014, when fiveof its professionals stood among the nation’s top billers. Onenurse practitioner at the company’s clinic in Cleveland, Tenn.,single-handedly generated $1.1 million in Medicare billings forurine tests that year, according to Medicare records.

Dr. Peter Kroll, one of the founders of CPS and its medicaldirector, billed Medicare $1.8 million for these drug tests in2015. He said the costly tests are medically justified to monitorpatients on pain pills against risks of addiction or even selling of pills on the blackmarket. “I have to know the medicine is safe and you’re taking it,”Kroll, 46, said in an interview. Kroll said that severalstates in which CPS is active have high rates of opioid use, which requires more urinetesting.

Kaiser Health News, with assistance from researchers at the MayoClinic, analyzed available billing data from Medicare and privateinsurance billing nationwide, and found that spending on urinescreens and related genetic tests quadrupled from 2011 to 2014 toan estimated $8.5 billion a year — more than the entire budget ofthe Environmental Protection Agency. The federal government paidproviders more to conduct urine drug tests in 2014 than it spent onthe four most recommended cancer screenings combined.

Yet there are virtually no national standards regarding who getstested, for which drugs and how often. Medicare has spent tens ofmillions of dollars on tests to detect drugs that presented minimalabuse danger for most patients, according to arguments made bygovernment lawyers in court cases that challenge the standingorders to test patients for drugs. Payments have surged for urinetests for street drugs such as cocaine, PCP and ecstasy, whichseldom have been detected in tests done on pain patients. In fact,court records show some of those tests showed up positive just 1percent of the time.

Urine testing has become particularly lucrative for doctors whooperate their own labs. In 2014 and 2015, Medicare paid $1 millionor more for drug-related tests billed by health professionals atmore than 50 pain management practices across the U.S. At a dozenpractices, Medicare billings were twice that high.

Thirty-one pain practitioners received 80 percent or more oftheir Medicare income just from urine testing, which a federalofficial called a “red flag” that may signal overuse and could leadto a federal investigation.

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KaiserHealth News (KHN) is a national health policy newsservice. It is an editorially independent program ofthe Henry J. Kaiser FamilyFoundation.

“We’re focused on the fact that many physicians are making moremoney on testing than treating patients,” said Jason Mehta, anassistant U.S. attorney in Jacksonville, Fla. “It is troubling tosee providers test everyone for every class of drugs every timethey come in.”

Tests to detect drugs in urine can be basic and cheap. Doctorshave long used testing cups with strips that change color whendrugs are present. The cups cost less than $10 each, and a stripcan detect 10 types of drugs or more at once and display theresults in minutes.

After noticing that some labs were levying huge charges forthese simple urine screens, the Centers for Medicare & MedicaidServices moved in April 2010 to limit these billings. To circumventthe new rules, some doctors scrapped cup testing in favor ofspecialized — and much costlier — tests performed on machines theyinstalled in their facilities. These machines had one majoradvantage over the cups: Each test for each drug could be billedindividually under Medicare rules.

“It was almost a license to steal. You had such a lucrativepossibility, it was very tempting to sell as many [tests] as youcan,” said Charles Root, a longtime lab industry consultant whosecompany, CodeMap, has tracked the rise of testing labs in doctors’offices.

Voluminous drug tests

The CPS testing lab in Tennessee opened in 2013, not long beforea pain specialist named William Wagner moved from New Mexico toopen a CPS clinic in Anderson, S.C. He was lured by the promise of$30,000 a month in salary, which would grow as the clinic addedpatients and revenue, along with other benefits. His contract saidhe could be on-site for as little as 20 percent of the clinic’soperating hours.

When the company recruited him, Wagner said, he was told the joboffered “potential to earn a great deal of money” from bonuses hewould receive from services he generated, including a share ofcollections from lab services for urine tests done at the newTennessee facility.

That did not happen, according to Wagner. He is suing CPS,saying that it failed to collect bills for services he rendered andthen closed the clinic. CPS refutes Wagner’s claims and says itfulfilled its obligations under the contract. In a counterclaim,CPS argues that Wagner owes it $190,000.

“All of their money was being made off of urine drug screens.They weren’t doing anything else properly,” Wagner said. Thelawsuit is pending in federal court in Nashville.

Former CPS chief executive John Davis, in an interview,described the urine-testing lab as part of a “strategic expansioninitiative” in which the company invested $6 million to $10 millionin computerized equipment and swiftly acquired new clinics. Kroll,one of the owners of CPS, said the idea was to “take the company tothe next level.”

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KaiserHealth News (KHN) is a national health policy newsservice. It is an editorially independent program ofthe Henry J. Kaiser FamilyFoundation.

Davis, who led the initiative before leaving the company inJune, would not discuss the private company’s finances other thanto say CPS is profitable and that lab profits “to a great degree”drove the expansion. “Urine screening isn’t the reason why wedecided to grow our company. We wanted to help people in need,”Davis said.

Kroll acknowledged that urine tests are profit-makers, butstressed that verifying that patients aren’t abusing drugs giveshim a “whole different level of confidence that I’m doing somethingright for the patients’ condition.”

He said his doctors try to be “judicious” in ordering urinetests. Kroll said some of his doctors and nurses treat “high-risk”patients who require more frequent testing. The company said thatits Medicare billing practices, including urine screens, hadwithstood a “very in-depth” government audit. The auditinitially called for repayment of $25 million but was settled in2016 for less than $7,000, according to the company. Medicareofficials had no comment.

Kroll’s orthopedic career took a sharp turn more than a decadeago after watching his brother suffer through multiple surgeriesfor muscular dystrophy, along with bone fractures, stiffness andpain. His brother died at age 25, and Kroll decided to switch toanesthesiology and become a pain specialist.

“It sensitized me to the plight of people with chronicconditions that we have no medical answer for,” Kroll said. Hisbrother “battled for his whole life.”

Kroll’s career change coincided with a national movement toestablish pain management as a vital medical specialty, with itsown accrediting societies and lobbying and political arm to advanceits interests and those of patients.

Joined by three other doctors, he formed Comprehensive PainSpecialists at a storefront in suburban Hendersonville, Tenn. Itquickly gained a foothold on referrals from local doctors unsure,or uneasy, about treating unyielding pain with heavy narcotics suchas oxycodone, morphine and methadone.

In 2014, when CPS was among Medicare’s major urine-test billers,Tennessee led the nation in Medicare spending on urine drug testsrun by doctors with in-house labs, according to federal billingrecords.

How much is too much?

There is wide disagreement among legislators, medical tradeassociations and the state boards that license doctors over thebest approach to urine testing. One association of pain specialistsargued in 2008 that urine testing could be done as often as weekly,while others have balked at that frequency.

Indiana’s medical board ordered mandatory urine tests for allpain patients in late 2013, only to face a lawsuit from theAmerican Civil Liberties Union, which argued that the policy wasunconstitutional and an unlawful search. Officials backed down thenext year, and current policy states that testing can be done “atany time the physician determines that it is medicallynecessary.”

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The federal Centers for Disease Control and Prevention, wary ofboth cost and privacy concerns, declined to set a definitivenational standard despite years of debate. In long-awaitedguidelines issued in March 2016, the CDC called for testing at thestart of opioid therapy and once a year for long-term users. Beyondthat, it said, testing should be “left up to the discretion” of themedical professional.

There is likewise little scientific justification for many ofthese new types of drug testing that have made their way ontodoctors’ order sheets and laboratory menus.

Many pain patients on opioids are routinely tested forphencyclidine, an illegal, hallucinogenic drug also known asPCP, or angel dust, Medicare records show. Yet urine tests haverarely detected the drug. Millennium, the San Diego-based companythat once topped Medicare billings for urine tests, found PCP infewer than 1 percent of all patient samples, according to federalcourt filings.

In a tour of the CPS lab, Chief Operations Officer Jeff Hurst,who has more than two decades of experience working for commerciallabs, rattled off a list of drugs ranging from cocaine to heroinand methamphetamine, which he said was “really big in EastTennessee.”

How often urine tests reveal serious drug abuse — or suggestpatients might be selling some of their medications instead oftaking them — is tough to pin down. Asked during a tour of thelaboratory in Tennessee if CPS could provide such data, Hurst saidhe did not have it; Kroll said he didn’t either.

Hurst said the lab often ends up doing a “long list of tests”because CPS doctors are prescribing dangerous drugs that may bedeadly if abused and “need to know what patients are taking.”Prescribed drugs, such as opiates and tranquilizers, are alsomeasured at the CPS lab.

Government officials have criticized the explosive growth intesting for some prescription drugs, notably a class oftranquilizers known as tricyclic antidepressants. Medicare paidmore than $45 million in 2014 for more than 200,000 people to betested for tricyclic drugs, often multiple times. Medicare wasbilled for 644,495 tests for one tricyclic drug, amitriptyline, upfrom 6,173 tests five years earlier.

The Department of Justice argued in a 2012 whistleblower casethat these tests often couldn’t be justified because of “low abusepotential” of the drugs and a “lack of abuse history for the vastmajority of patients.”

Income breakdown raises ‘red flag’

When told that drug screens accounted for most of the Medicareincome for dozens of pain doctors, federal officials said that wastroubling.

“Doctors who receive the lion’s share of their Medicare fundsfrom urine drug testing would certainly raise a red flag,” saidDonald White, a spokesman for the Department of Health and HumanServices’ Office of the Inspector General. “Confirmation of fraudwould require federal investigation and a formal judicialproceeding.”

In a report released last fall, the watchdog office said someuptick in testing might be justified by the drug abuse epidemic,but noted that the situation also “could provide cover for labsthat might seek to fraudulently bill Medicare for unnecessary drugtesting.”

Medicare pays only for services it considers “medicallynecessary.” While that sometimes can be a judgment call, painclinics that adopt a “one-size-fits-all” approach to urine testingmay find themselves under suspicion, said Mehta, the assistant U.S.attorney in Florida.

Mehta’s office investigated a network of Florida clinics calledCoastal Spine & Pain Center for alleged over-testing, includingroutinely billing for a second round of expensive tests simply toconfirm earlier findings. In a press release in August 2016, the government argued that these testswere “medically unnecessary.” The company paid $7.4 million lastyear to settle the False Claims Act case. Coastal Spine & Pain,which did not admit fault, had no comment.

Four Coastal Spine & Pain doctors were among the top 50Medicare billers during 2014, when they charged nearly $6 millionfor drug tests, according to Medicare billing data analyzed byKHN.

Starting in 2016, Medicare began to crack down on urine billingsas part of a federal law that is supposed to reset lab fees for thefirst time in three decades. Now tougher scrutiny of urine testing,and cuts in reimbursements, may be threatening CPS — or at leastits profits.

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KaiserHealth News (KHN) is a national health policy newsservice. It is an editorially independent program ofthe Henry J. Kaiser FamilyFoundation.

CPS closed nine clinics last year and told its doctors thaturine-testing revenue had dropped off 32 percent in the firstquarter of the year, according to a letter then-CEO Davis sent itsphysician partners.

Davis said the company had to “make some changes” because ofcuts in Medicare reimbursements for urine tests and other medicalservices. A company spokeswoman told KHN that the drop in urinerevenue worsened through 2016 but has bounced back somewhat thisyear.

Despite the cuts, privately held CPS plans to open new clinicsthis year. Urine testing will remain a key service — for keepingpatients safe, it said. CPS is just playing by the rules of thegame. “Tell us how often to test,” said Hurst, the operationsofficer, “and we’ll be happy to follow it.”

KHN’s coverage related to aging & improving care of olderadults is supported by TheJohn A. Hartford Foundation.

‘Liquid Gold’ investigation: Sifting through the data

Kaiser Health News relied on payment data from Medicare’s fee-for-service program, availablefrom the Centers for Medicare & Medicaid Services to analyzethe prevalence and cost of urine drug testing and related genetictesting. Doctors and laboratories bill Medicare using standardcodes. KHN consulted with several billing experts in the field andused government documents to identify relevant billing codes forthis analysis.

Medicare reimburses providers for each code they bill based on astandard amount that allows for some geographic variation. Eachcode represents a type of test, and multiple tests can be done on asingle urine sample; therefore, the amount that providers bill fora single sample of urine varies greatly.

Medicare’s Part B payment data is publicly available only forthe years 2012 through 2015. KHN acquired historical data from theconsulting firm CodeMap goingback to 2005 to analyze trends in billing.

KHN also teamed up with researchers at the Mayo Clinic toanalyze claims data for private insurers and Medicare Advantage toestimate the total cost per year, which in 2014 was roughly $8.5billion for private plus government payers. Mayo Clinic researchersaccessed data from the OptumLabs Data Warehouse, whichincludes health insurance claims that cover about 20 millionpatients per year. The analysis included claims from physicians andindependent labs, and excluded any facility (hospital oroutpatient) fees. To estimate the yearly cost, KHN took the totalcost per enrollee from the Mayo Clinic data analysis and applied itto the estimated populations for both private insurance (from theCurrentPopulation Survey) and Medicare Advantage (from CMS’ Beneficiary Public Use File). This is a rough estimate becausethe OptumLabs claims might not reflect some variations in medicalcare costs and health conditions across the country.

Kaiser HealthNews (KHN) is a national health policy news service. It is aneditorially independent program of the Henry J. Kaiser FamilyFoundation.