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Medicare Publishes 2018 Clinical Laboratory Fees Despite Calls for a Delay by the CAP

The Medicare program published the 2018 clinical laboratory fee schedule (CLFS) utilizing a new methodology based on private payer rates for tests collected from a small segment of providers. The CAP has called this collection process flawed and continued to urge the Centers for Medicare & Medicaid Services (CMS) to delay the implementation of the new fee schedule.

A 2014 federal law mandated changes to the CLFS and the CMS has since worked to implement the law. The 2018 CLFS was published on CMS’ website on September 22 and the full file is available for download.

As a service for CAP members, the CAP analyzed the impact of the top 100 Healthcare Common Procedure Code System (HCPCS) CLFS codes by volume, which represent 80% of total CLFS spending. Download the 2018 CLFS Impact Table.

Primary CLFS Payment Amounts

The CMS reports that the preliminary private payor rate-based CLFS payment amounts are estimated to be a loss of $670 million in Medicare Part B payments in 2018. According to the CMS, approximately 10% of the HCPCS codes on the CLFS receive an increase based on the weighted median of the private payor rates over the 2017 CLFS rates.

Moreover, the CMS stated that approximately 75% of the HCPCS codes on the CLFS receive a decrease based on the weighted median of the private payor rates from the 2017 rates. About 58% of HCPCS codes will receive a phased-in payment reduction in 2018, 2019, and 2020 rather than the full private payor rate-based payment amount in 2018 because the total payment decrease would be greater than 10%.

In 2014, Congress passed Protecting Access to Medicare Act (PAMA) to temporarily stop cuts to Medicare Part B physician reimbursement rates and prevent potential for steeper cuts to CLFS rates planned by the CMS from going forward. PAMA reductions occur in phases and are limited to:

  • 10% per year for 2018-2020
  • 15% per year for 2021-2023

Citing adverse impacts to laboratories and patients, the CAP strongly advocated for improvements to how CMS collected data from laboratories. Most recently the CAP, along with other organizations within the laboratory community, met with Department of Health and Human Services (HHS) officials to urge the agency to delay the implementation of PAMA. The program rules excluded the vast majority of laboratories, including many hospital-based laboratories, from reporting private payer market data. Although most laboratories are excluded from reporting, the new CLFS rates will apply to all laboratories, including physician office laboratories, in 2018.

As for the PAMA data reporting flaws, the number of laboratories that submitted data to the CMS was reportedly below agency estimates. Although the CMS did collect large volumes of data, the CAP believes the data are not reflective of the full market and is concerned that the CMS have no plans to validate the quality and accuracy of the collected data. Ultimately, Medicare beneficiary access to services—particularly in the most underserved areas—could be negatively affected, the CAP and others have said.

On September 25, the Medicare Advisory Panel on Clinical Diagnostic Laboratory Tests will meet and the CAP will continue to share its concerns with the panel on behalf of CAP members.

The CAP will provide the CMS with comments on the 2018 Medicare CLFS rates by the agency's October 23, 2017 deadline. The CMS is expected to publish the final rates in November.

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