Linda Rouse O’Neill
Long awaited proposed lab rule prohibits most from reporting
In late September, the Centers for Medicare & Medicaid Services (CMS) released the annual Clinical Laboratory Fee Schedule (CLFS) proposed rule, which provides the first glimpse into the agency’s thinking on what labs should report private payer data to CMS. Per the Protecting Access to Medicare Act of 2014 (PAMA), CMS is required to collect private payer data in 2016 and use it to reset Medicare payments in 2017.
However, in its proposed rule, CMS defines applicable laboratories – those that must report private payer data – as facilities that are paid $50,000 per year or more on the CLFS. By establishing the $50,000 per year payment threshold, CMS expects most, if not all, hospital labs to be excluded from the “applicable laboratory” designation. More than 90 percent of physician offices and more than 50 percent of independent labs will also be omitted from reporting private payment data based on the low expenditure measure.
Initial reaction from the industry has been one of concern as prohibiting the majority of labs from reporting will not provide accurate data from across the market. CMS will be using this data to update Medicare reimbursement rates for the CLFS that take effect in 2017 and are expected to result in significant cuts for your customers.
“So who is going to report this data, and will it be actually representative of the market?” you may be asking yourself. CMS has justified its proposal, estimating that the applicable independent labs required to submit private payer data in 2016 (less than 50 percent of the market) account for more than 99 percent – nearly all – of CLFS independent lab spending. Those figures are slightly lower for applicable physicians and physician office labs (less than 10 percent of the market), which are estimated to account for approximately 96 percent of CLFS spending for this sector. Several blood tests often conducted in a physician’s office are paid under the CLFS – such as lipid panels to check cholesterol levels – so prohibiting these labs from reporting could carry unforeseen ramifications.
Medicare pays approximately $8 billion per year for clinical diagnostic laboratory test (CLDT) reimbursement under the CLFS. Under PAMA, test reimbursement amounts cannot drop more than 10 percent compared to the previous year’s payment amount from 2017 to 2019, and cannot drop more than 15 percent for the subsequent three years through 2022.
If you would like more information on the CLFS proposed rule, I invite you to visit HIDA’s Government Affairs page at www.HIDA.org, where we summarize the rule’s major policy and customer impacts. As always, you can also contact us at HIDAGovAffairs@hida.org with additional questions.