CMS Releases New Proposed Rule Requiring Labs to Report Payments and Test Volumes

Last Friday the Centers for Medicare and Medicaid Services announced a newly proposed rule that would significantly revise the Medicare payment system for clinical diagnostic laboratory tests and would implement other changes required by the Protecting Access to Medicare Act of 2014.

The Proposed Rule significantly changes how CMS will set Medicare payment rates for clinical diagnostic laboratory tests (CDLTs).  Applicable laboratories will be required to report to CMS certain information about the payment rates paid by private payors for each CDLT and the corresponding volumes of such tests. The rule will be published in the Federal Register on Oct. 1; the comment period will be open until November 25.  The data will be used to determine Medicare’s payment for lab tests beginning January 1, 2017.

In the proposed rule, CMS will require the payment amount for CDLTs furnished on or after January 1, 2017, be equal to the weighted median of private payor rates determined for tests, based on certain data reported by laboratories during a specified data collection period. Among a list of proposed policy changes, the rule impacts:

  • Definition of “applicable laboratory”
  • Definition of “applicable information”
  • Schedule for reporting applicable information to CMS.
  • Coding for certain CDLTs
  • Payment methodology for CDLTs

The rule proposes the definition of an “applicable laboratory” be changed to:

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A laboratory that receives more than 50 percent of its Medicare revenues from 42 CFR part 414, subparts G and B (that is, for services that are paid by Medicare under the CLFS and the Physician Fee Schedule (PFS)) in a data collection period. Additionally, applicable laboratories will be defined at the Taxpayer Identification Number (TIN) level rather than the National Provider Identifier (NPI) level.[/content_box]

The rule also proposes that laboratories receiving less than $50,000 in Medicare revenues in a data collection period be excluded from the definition of an applicable laboratory. Additionally, the rule proposes the new system be updated every three years for CDLTs and every year for advanced diagnostic lab tests (ADLTs) to reflect market rates paid by private payers.

For the initial data collection period, applicable laboratories would report information to CMS by March 31, 2016 for the period of July 1 – December 31, 2015. All subsequent data collection periods would cover a full calendar year. The rule proposes a civil monetary penalty to an applicable laboratory that fails to report or that makes a misrepresentation or omission in reporting.

Read the proposed rule.