CMS Changes Payment Rules for Clinical Diagnostic Lab Tests

The CMS recently published a proposed rule on new Medicare payment, coding and coverage policies for certain clinical diagnostic laboratory tests (CDLTs), which would implement section 216(a) of the Protecting Access to Medicare Act of 2014 (PAMA). PAMA significantly revises Medicare’s payment system for clinical diagnostic laboratory tests (CDLTs) and advanced diagnostic laboratory tests (ADLTs) paid under the Clinical Lab Fee Schedule (CLFS) beginning Jan. 1, 2017.

First adopted in 1984, Medicare’s current fee schedule for lab tests has remained unchanged except to establish payments for new tests or implement across-the-board statutory payment updates. Moreover, the Medicare agency pays roughly $8 billion a year for clinical diagnostic laboratory tests, said CMS.

What are the proposed reporting requirements?

According to the recently proposed rule (RIN 0938-AS33), certain laboratories would be required to report private payer rate and volume data if they receive at least $50,000 in Medicare revenues from laboratory services and more than 50 percent of their Medicare revenues from laboratory and physician services.

The proposed rule implies that laboratories would collect private payer data from July 1, 2015, through Dec. 31, 2015, and report it to CMS by March 31, 2016. CMS would then use the data to determine new Medicare payment rates that would be posted by Nov. 1, 2016.

According to the CMS fact sheet, the agency didn’t anticipate hospital labs meeting the definition of facilities affected by the proposal. CMS said, “[W]e estimate that more than 50 percent of independent laboratories and more than 90 percent of physician offices will be precluded from reporting private payor data.”

Proposed Schedule for Initial Implementation

Step Timing
“Data collection period” – Information on laboratory services delivered during this period will be reported and reflected in rate setting July 1 to December 31, 2015
“Data reporting period” during which laboratories will report data to CMS January 1 to March 31, 2016
CMS will develop new rates April 1 to November 2016
CMS will publish new rates November 2016
New rates go into effect January 1, 2017

CMS is seeking comments on the definition of “applicable laboratory” and whether data should be reported at a higher level of aggregation or at a lower level. Nov. 24, 2015 is the last date to comment on this proposed rule, and physician laboratories and independent testing laboratories are advised to read the proposed rule carefully before commenting. The final rule is expected by year’s end, so invest time in fully understanding the reporting requirements, as well as any proposed changes that may be applicable to your situation.

For more information on the new rule, check this CMS Press Release

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