CMS Proposes New Medicare Clinical Diagnostic Laboratory Tests Fee Schedule

CMS released its initial plan for how to implement the “Protecting Access to Medicare Act of 2014,” which became law last year and seeks to establish a market-based payment system for diagnostics. Under the law, “applicable laboratories” will report to CMS reimbursement allowable rates from private payors for each clinical diagnostic lab test and the volumes for each test over a specified period of time.  CMS will then calculate a weighted median payment amount for each test. PAMA stipulates that Medicare payment cannot be reduced more than 10 percent of the prior year CLFS between 2017 and 2019 or more than 15 percent between 2020 and 2022. Labs that fail to report or misrepresent their rates can be penalized as much as $10,000 per day. In its proposal, CMS defined “applicable laboratory” as one that receives more than 50 percent of its Medicare revenues as paid under the CLFS or PFS, which would rule out hospital labs from having to report fees.  CMS will update pricing annually for advanced tests and every three years for all other diagnostics. For new non-ADLTs that come on the market in the middle of the three-year pricing cycle, CMS’ MACs will determine local pricing. CMS is expected to report preliminary reporting instructions in October, but stakeholders have until Nov. 24 to comment on this proposal. With PAMA still slated to take effect on Jan. 1, 2017, labs will have to begin collating payment rates from private payors from July 1, 2015, to December 31, 2015, and report this to CMS during the first three months of next year. CMS will publish the final rates that take effect in 2017 in November 2016. Laboratories are encouraged to comment on the PAMA draft rule; comments are due by 11/25/15.  

Source: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-09-25-2.html