Pathology/Lab Coding Alert

Question: I’ve heard that PAMA requires Medicare to re-figure all clin lab fees based on technical changes and difficulty of tests. Is that true, and can you explain the expected impact?

Iowa Subscriber

Answer: You’re correct that the Protecting Access to Medicare Act (PAMA) requires CMS to set new pricing for tests on the Clinical Laboratory Fee Schedule (CLFS). But you’ve got old news about how CMS will go about that task.

An earlier proposal required CMS to consider improvements and cost savings in technical processes to re-value clinical lab codes. But that proposal was disbanded, and PAMA section 216 establishes a new method to establish new CLFS values.

Here’s how: “Applicable” labs (those earning more than 50 percent of their Medicare revenue from the CLFS and physician fee schedule, and earning at least $50,000 per year from the CLFS) will report private-payer data for tests provided between July 1 and Dec. 31, 2015.

After applicable labs report private payer reimbursement rates and test volume for each test on the CLFS (approximately 1300 tests), CMS will use the data to establish the Jan. 1, 2017 CLFS payment rate. CMS will set the rate for each test as the weighted median of private payer rates reported by applicable labs.