- CMS announced a long-awaited final rule late Friday regarding how Medicare will update its payment rates for clinical lab tests.
- The rule will require reporting entities to share their private payer payment rates for lab tests as well as the corresponding volumes of tests.
- These private rates will be used to determine the revised Medicare payment rates for the majority of tests on the Clinical Laboratory Fee Schedule (CLFS) as of January 2018.
The rule has been highly anticipated given a version was first proposed in October 2015 and the Office of Management and Budget were delayed in reviewing it until this April, according to Bloomberg BNA.
"In general, the payment amount for a test on the CLFS furnished on or after January 1, 2018, will be equal to the weighted median of private payor rates determined for the test," CMS stated, "based on the data of applicable laboratories that is collected during a specified data collection period and reported to CMS during a specified data reporting period."
The impact could be substantial; Medicare currently pays about $7 billion annually on approximately 1,300 lab tests covered under its fee schedule, and the changes could lower Part B payments for fiscal year 2017 by $360 million, according to Bloomberg.
CMS noted payment amounts for tests are limited to a maximum drop of 10% compared to the previous year, for the first three years of the new payment system. They are then limited to drops of 15% per year for the next three years.
CMS' schedule for implementing the system begins with a data collection period running from January 1 through June 30 followed by the first data reporting period of January 1, 2017 through March 31, 2017 for determining calendar year (CY) 2018.
Preliminary rates for 2018 are scheduled for release in September 2017.