Labs “Very Nervous” About Palmetto GBA /CMS Contract, New Z-Codes and LCDs

This week I’m at the November meeting of the California Clinical Laboratory Association(CCLA.) Palmetto GBA announced that they obtained a new contract with CMS to develop a registry for Molecular diagnostic tests that would establish a new Z-code for each test using McKesson’s proprietary software. The session generated almost an hour of Q&A with very nervous labs both concerned about the role of a private vendor known to primarily contract with Payors and the implication of a registry that is designed to review new tests for coverage by an already appointed anonymous panel. This coupled with the two LCDs that target the elimination of stacking codes, array codes, cytogenetic codes, serology and AP codes leaves the potential for the MAC to also re-price common assays as well as new tests and leaves labs with the possibility of significant reimbursement disruption. Palmetto GBA tried to address fears that this was not the intention, but other associations including CAP and AMA have already mobilized to get further clarification. I’m sure we haven’t heard the last word on this.

– Lale White