Calculation of Payment Rates - Clinical Laboratory Test Fee Schedules

20 - Calculation of Payment Rates - Clinical Laboratory Test Fee Schedules (Rev. 4479; Issued: 12-20-19 Effective: 01-23-20, Implementation: 01-23-20) Section 216 of Public Law 113-93, the “Protecting Access to Medicare Act of 2014,” added section 1834A to the Social Security Act (the Act). This provision requires extensive revisions to the payment and coverage methodologies for clinical laboratory tests paid under the clinical laboratory fee schedule (CLFS). The Centers for Medicare & Medicaid Services (CMS) published CMS-1621-F Medicare Clinical Diagnostic Laboratory Tests Payment System, on June 23, 2016, which implemented the provisions of the new legislation. The final rule set forth new policies for how CMS sets rates for tests on the CLFS and is effective for dates of service on and after January 1, 2018. Beginning on January 1, 2017, applicable laboratories will be required to submit data to CMS which describes negotiated payment rates with private payers for and corresponding volumes of tests on the CLFS. In general, with certain designated exceptions, the payment amount for a test on the CLFS furnished on or after January 1, 2018, will be equal to the weighted median of private payer rates determined for the test, based on data collected from laboratories during a specified data collection period. In addition, a subset of tests on the CLFS, advanced diagnostic laboratory tests (ADLTs), will have different data, reporting, and payment policies associated with them. In particular, the final rule discusses CMS’ proposals regarding: • Definition of “applicable laboratory” (who must report data under section 1834A of the Act) • Definition of “applicable information” (what data will be reported) • Data collection period • Schedule for reporting data to CMS • Definition of ADLT • Data Integrity • Confidentiality and public release of limited data • Coding for new tests on the CLFS • Phased in payment reduction Prior to January 1, 2018 Under Part B, for services rendered on or after July 1, 1984, clinical laboratory tests performed in a physician’s office, by an independent laboratory, or by a hospital laboratory for its outpatients are reimbursed on the basis of fee schedules. Current exceptions to this rule are CAH laboratory services as described in §10, and services provided by hospitals in the State of Maryland. Medicare pays the lesser of: • Actual charges; • The fee schedule amount for the State or a local geographic area; or • A national limitation amount (NLA) for the HCPCS code as provided by §1834(h) of the Act. Annually, CMS furnishes to A/B MACs (A) and (B) the proper amount to pay for each HCPCS code for each local geographic area. This includes a calculation of whether a national limitation amount or the local fee schedule amount is to be used. This information is available to the public on the CMS Web site in public use files.