Clinical Laboratory and Laboratory Services Rate Methodology Change

Assembly Bill (AB) 1494 directs the Department of Health Care Services to develop a new rate methodology for clinical laboratory or laboratory services, as specified. The Department of Health Care Services have advised that the 10% payment reduction is being implemented as follows:

1)    The State Plan Amendment (SPA) to implement the payment reduction for clinical lab services is scheduled to be presented to CMS this week (9-28-12).

2)   It will likely take around two months to obtain CMS approval.  The 10% payment reduction will be implemented when CMS grants approval, not before.

3)  After CMS approval is granted, it will require “system changes” at DHCS. These changes are likely to take additional time after CMS approval is provided.

4)  The payment reductions will be for the full 10% authorized by the statute (AB 1494).

5)  The payment reductions will be retroactive to services provided on or after July 1, 2012.

6)  We anticipate that you will see the 10% reduction AND the claw back for “over payment” for services reimbursed since 7-1-12 begin in December or January.

7)  FPACT shall be exempt from the payment reduction as specified in AB 1494.