In a follow-up to our story from GenomeWeb last Thursday, the American Health Lawyers Association is taking a different approach to the news coming from CMS as to lab reimbursement rates.
The AHLA reports that labs will see an almost $4 billion payment cut over the next decade under the CMS Final Rule. The Centers for Medicare & Medicaid Services (CMS) released June 17 a long-anticipated final rule that will use private insurer rates to calculate Medicare payments for laboratory tests paid under the Clinical Laboratory Fee Schedule (CLFS).
The final rule, which implements provisions of the Protecting Access to Medicare Act of 2014 (PAMA), delayed implementation of the final rule until January 1, 2018, as urged by many industry stakeholders.
Labs can expect a $3.93 billion payment cut over the next 10 years as a result of the new payment system under the rule, which was published in the June 23 Federal Register (81 Fed. Reg. 41035).
According to CMS, in fiscal year 2018, affected labs will see a percentage reduction in revenue of approximately 5.6%; a five-year percentage reduction of about 4.9%; and a ten-year percentage revenue reduction of approximately 5.6%.
The final rule requires reporting entities to report private payer rates and test volumes for laboratory tests if an applicable laboratory receives at least $12,500 in Medicare revenues from laboratory services paid under the CLFS and more than 50% of its Medicare revenues from laboratory and/or physician services.
According to the agency, “approximately 95 percent of all physician office laboratories and about half of independent laboratories will not fall under these requirements.”
PAMA provides for civil monetary penalties of up to $10,000 per day for each failure to report and/or each misrepresentation or omission in reporting private payer prices, the rule noted.
Although the proposed rule would have required private insurance rate information to be collected over a 12-month period, the final rule adopted a six-month data collection period. The first data collection period will be from January 1 through June 30, 2016, CMS said.
In addition, under the rule, Medicare will pay for a special category of tests, known as advanced diagnostic laboratory tests, at actual list charge for three calendar quarters.
The American Clinical Laboratory Association (ACLA) said in a June 17 statement that, although its overall evaluation of the final rule “has just begun,” the final rule appears to have adopted “improvements in several key areas, including the definitions of applicable laboratory and advanced diagnostic laboratory test.”
ACLA also “commended CMS on its decision to delay the implementation of the new payment system until January 1, 2018.”