On Sept. 25, 2015 in a press release the Centers for Medicare & Medicaid Services (CMS) announced their proposed rule for the new Clinical Diagnostic Laboratory Test Payment System which could require applicable clinical laboratories to report private insurance payment amounts and corresponding lab test volumes. CMS will utilize this data to establish lab test payment beginning Jan. 1, 2017.

Protecting Access to Medicare (PAMA)

Section 216 of the Protecting Access to Medicare Act of 2014 (PAMA), requires revisions to the current payment and coverage methodologies for clinical laboratory tests paid under the Clinical Laboratory Fee Schedule (CLFS). CMS will use the weighted median of private payer rates provided by applicable laboratories during a defined time period to determine payment amounts for CLFS tests starting January 2017. Advanced diagnostic laboratory tests (ADLTs), which are a subset of tests on the CLFS will have different data collection, reporting, and payment policies associated with them.

Applicable Laboratories

PAMA is defining applicable laboratories, which will be subject to these reporting requirements, as labs with greater than 50% of its Medicare revenue coming from the CLFS and/or Physician Fee Schedule (PFS). The proposal will also exclude laboratories from being an applicable laboratory if they are paid less than $50,000/year on the CLFS.

In their publicized comments, CMS noted that they do expect hospital-based laboratories and over 50% of independent labs to meet this definition of an applicable laboratory. However, while the 50% and low expenditure threshold would substantially reduce participation from physician offices and independent laboratories, CMS believes those laboratories that would be required to report account for 96% of CLFS spending on physician office laboratories and more than 99% of CLFS spending on independent laboratories.1

2016 Reporting

Applicable labs must report information by April 1, 2016 for the period July 1 through Dec. 31, 2015 which will be used to determine the CLFS 2017 rates. The proposed rule, would also apply civil monetary penalties to applicable laboratories who fail to report.2

1 CMS Fact Sheet. Medicare Clinical Diagnostic Laboratory Tests Payment System Proposed Rule. Sept. 29, 2015.
2 42 U.S.C. § 1395m–1 (2015)-(a) (9) (A). Improving Policies for Clinical Diagnostic Laboratory Tests.

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