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Medicare Publishes Final 2018 Clinical Laboratory Fees despite CAP, Industry Concerns

The Centers for Medicare & Medicaid Services (CMS) published the final Medicare 2018 clinical laboratory fee schedule (CLFS) despite the CAP and other industry groups’ reservations about the laboratory data collection process and methodology to calculate the new rates. The CAP has called this collection process flawed and continues to urge the CMS to delay the implementation of the new fee schedule to allow for time to fix their flawed data collection process.

A 2014 federal law mandated changes to the CLFS and the CMS has since worked to implement the law. The final 2018 CLFS rates were published on CMS’ website on November 17 and the full file is available for download. The CAP provided comments to the agency on its proposed 2018 rates on October 23.

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.

The CMS did increase the 2018 rates for 25 codes, and decreased the 2018 payment rate for a single code. Furthermore, the CMS added three payment rates to the list that were not included in the preliminary rate release, and deleted the payment rate for one code.

CMS Makes Changes Based on Stakeholder Input

While the CMS mostly left the September preliminary rates unchanged in the November final rate release, the agency did revise proposed rates based on public comments received from the CAP and other industry stakeholders. The five specific areas are:

1. Methodology Changes: The CMS changed the methodology for codes that have National Limitation Amounts (NLA) of zero despite having some local fee schedule amounts greater than zero. This change affected the payment rates in 2018 and further years for 23 HCPCS codes, most notably CPT Code 80061 Lipid panel. The CAP advocated successful with the agency on this methodology.
2. Applied Minimum Payment Amount for Pap Smears: In the preliminary rate release, the CMS did not apply the national minimum payment amount floor for diagnostic or screening Pap smear laboratory tests as required by law. However, in the final determinations, the national minimum payment amount floor is applied to eight of these codes. The remaining HCPCS codes will be paid at the higher private payor rate-based payments, with the phase-in reduction cap where applicable.
3. Statutory Payments for Hemoglobin A1c (HbA1c) Kits: In the preliminary rate release, the CMS did not correctly apply the statute for home use hemoglobin A1c (HbA1c) kits, which states that the payment rate for CPT code 83037 must equal the payment rate for CPT code 83036. Therefore, in the final determinations, the CMS reduced the 2018 payment rate for HCPCS code 83037 to the 2018 payment amount for code 83036.
4. Corrected Payment Rates: The CMS corrected payment rates for 23 HCPCS codes with the phase-in reduction cap that were listed erroneously for either 2019 or 2020.
5. Removed General Health Panel Code: The CMS did remove HCPCS code 80050 general health panel, which is not payable under Medicare.

Updating the CLFS

In 2014, Congress passed the 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.