OPPS Spending for Laboratory Services

CMS is proposing to reduce the CY 2016 conversion factor to account for roughly $1 billion in inflation in the OPPS payments resulting from excess packaged payment under the OPPS.  For CY 2014, in monitoring aggregate spending for Part B services, the CMS Office of the Actuary (OACT) observed a 14 percent increase in CY 2014 OPPS spending as compared to the typical 6 to 8 percent annual growth. The primary source of this 14 percent increase in OPPS spending was identified as estimates related to the policy to package laboratory tests into OPPS payment for related services, beginning in CY 2014. Specifically, CMS estimated a $2.4 billion shift in CY 2014 spending to be packaged into the OPPS payment rates to account for hospital outpatient claims for laboratory tests previously paid at the Clinical Laboratory Fee Schedule payment rates outside the OPPS.  However, OACT found that about $1 billion in laboratory tests payments that were projected to be packaged into OPPS payment rates continued to be paid separately in CY 2014.  Therefore, in CY 2014, CMS overestimated the amount of laboratory test packaging that would result from this new packaging policy by $1 billion.  To adjust for this, CMS is proposing to reduce the CY 2016 conversion factor by 2.0 percent to account for the roughly $1 billion inflation in OPPS payments. CMS is also proposing changes to the laboratory test packaging policy.  One key proposal is for a new conditional packaging status indicator for laboratory tests that will make it easier for hospitals to receive separate payment for laboratory tests that are provided without other related OPPS services.