Release of Gap Filled Molecular Pathology Code Fees Show the Arbitrary Nature of the MAC Pricing Exercise

Medicare finally released its gap fill Rates for the new MOPATH CPT codes yesterday.  As expected, many of the prices are reflective of Palmetto’s pricing either prior to or after its April pricing adjustment.  Palmetto acknowledged that the additional information submitted by labs helped inform the pricing changes they made in April. In contrast, because they don’t have access to the lab-submitted data, MACs who did use Palmetto as a reference point for pricing originally and have not updated their pricing from the earlier Palmetto fee schedule can have no pricing rationale for their posted prices.  Cahaba’s prices were also posted by CMS even though they were clearly released with no methodology except to assign the majority of the codes one of two price points.    Regardless of whether MACs performed their own analysis or utilized the pricing of another MAC, the CMS document confirms that there is little rationale to how these prices were established or that they were created using the gap fill methodology. 

 

During April’s ACLA meeting, Mark Hartstein of CMS acknowledged that MACs outside of the Palmetto district would most likely not be able to successfully complete the Gap fill exercise for most of the new codes.  Now, the posted fee schedule and rationale document clearly demonstrates the veracity of this prediction and the lack of science in this process; Palmetto was unable to successfully gap fill most of the tier 1 and tier 2 tests. This failure comes as no surprise to molecular diagnostic labs, who were outraged when CMS announced a mere four months ahead of the transition to the new procedure codes that the gap fill method would be utilized to price hundreds of these highly complex diagnostic procedures.  To put this into context, gap filling generally takes an inordinate amount of time and resources to complete even when only one procedure is being analyzed. Furthermore, the results of many pure gap filling efforts have yielded inequitable reimbursement levels.   

 

Molecular diagnostic labs have gone unpaid or underpaid by Medicare (and in many cases commercial payors) for most of 2013, and the prices being released now are still not covering basic testing costs for these labs. All labs still need to push back on the current prices regardless of their jurisdiction as prices are still, in many cases, below cost and steeply discounted relative to the value they provide to patients and physicians. Labs need to get their comments on the pricing of ALL of the tier 1 and tier 2 codes to CMS within the next 60 days.  To those labs that have not seen their MAC adjust up their pricing to the most recent Palmetto fee schedule, comments should be made to both CMS and your local MAC.  In recent communications with Palmetto and CMS, labs have been advised that comments should include cost data and other detailed information utilized to perform a proper gapfilling exercise, rather than comments on the inadequacy of the current pricing.  Because the gap filling methodology has been utilized inconsistently for the current rate structure, it would be difficult for labs to attempt to initiate their own gap fill exercise using the comment period.  Labs should detail out their methodologies and the labor and equipment required for each test so that CMS understands the intricacy of such procedures, as well as any developmental costs, especially for proprietary assays.  Any comments should strive to substantiate prior reimbursement rates under the previous stacked coding methodology and their efficacy.  

 

Coordinated responses are encouraged, as there are hundreds of tests that need to be repriced, but keep in mind that the timeframe is short.  Labs can submit comments to CMS at MoPathGapfillInquiries@cms.hhs.gov.   However, most of the industry is not confident that submitting comments to CMS is enough as they have been unresponsive to this point.  A congressional intervention or other action will likely be necessary to compel CMS to adhere to proper protocol in order to get the current molecular pathology procedure pricing issue resolved.  Labs are encouraged to continue reaching out to their legislators and inform them on how the mishandling of this critical issue affects innovation, patient care, and the ongoing ability of molecular diagnostic labs to continue operating.