Amy Bassano Centers for Medicare and Medicaid Services June 9, 2009
Coverage of Clinical Laboratory Services Lab service must meet all requirements of the Clinical Laboratory Improvement Amendment (CLIA) of 1998 quality standards for all lab testing performed on specimens derived from humans Tests do not need to be FDA approved Laboratories that perform clinical lab tests must be certified by the Secretary of Health and Human Services
Coverage of Clinical Laboratory Services Covered clinical lab services are furnished in: Hospital laboratories Physician office laboratories Independent laboratories Dialysis facility laboratories Nursing facility laboratories Tests must be ordered by a physician who is treating the patient.
Coverage of Clinical Laboratory Services Tests must be medically reasonable and necessary to the overall diagnosis and treatment of the patient s condition. Medicare does not cover routine screening tests. There are certain exceptions named in the law including Screening Pap test Certain colorectal cancer screening Prostate Specific Antigen blood test Diabetes screening tests
Clinical Laboratory Fee Schedule Medicare Part B deductible and coinsurance do not apply 2009 total Medicare spending = approx. $7 billion Each Medicare carrier or A/B Medicare Administrative Contractor has own fee schedule based on charges from laboratories in that market Payment rate is the lesser of: The amount billed The local fee for the area National limitation amount (NLA) for the particular code.
Clinical Laboratory Fee Schedule Tests that have NLAs established before January 1, 2001, NLA = 74% of the median of all local fee schedule amounts Tests that have NLAs established on or after January 1, 2001, NLA = 100% of the median. Fees may be updated by statute No update 2004 2008 2009 update = CPI-U (4.5%)
New Lab Tests Clinical Lab fee schedule updated annually to account for new test codes. Code can either be crosswalked to existing, similar test code or gapfilled. Gapfilling requires Medicare contractors to collect data specific to their geographic area to set a new price that reflects that data. Annual public meeting to solicit feedback on how to set rates for new codes in the following year. This year s meeting is scheduled for July 14, 2009 CMS added a reconsideration process to allow for more public input into the establishment of fees.
Lab Date of Service Rule Since 2001, Medicare rules say the date of service for lab services is generally the date the specimen is collected. Generally, if a specimen is stored less than 30 days, payment for the test performed on that specimen is bundled into the payment for the inpatient hospital stay. No separate payment for test. Outpatient hospital can bill for the test. Stored specimen tests > 30 day, the date of service is the date the specimen was obtained from storage. Payment separate from inpatient PPS may be made. Hospital does not have to bill for specimen collected from outpatient.
Lab Date of Service Rule In 2007 CMS provided a regulatory exception to these requirements. Payment for test performed on a specimen collected during hospital stay and stored for less than or equal to 30 days may be unbundled from the payment for the hospital service if The test is ordered at least 14 days following the date of the patient s discharge from the hospital. For chemotherapy sensitivity test performed on live tissue, the decision regarding the specific agents to test was made at least14 days after discharge. The specimen was collected while the patient was undergoing a hospital surgical procedure. It would be medically inappropriate to have collected the sampleother than during the hospital procedure for which the patient was admitted; The results of the test do not guide treatment provided during the hospital stay; and, The test was reasonable and medically necessary for treatment ofan illness.
Other Payment Issues Inpatient Hospital PPS generally, lab tests are bundled into the relevant DRG payment Outpatient Hospital PPS Payment based on clinical lab fee schedule. Hospital bills for the test. Physician Fee Schedule pays for related physician services Payment for Part B drugs Physician office = ASP+6% Hospital outpatient department = ASP+4% or bundled into APC Hospital inpatient = bundled into IPPS payment
Contact Information Amy Bassano Director, Hospital and Ambulatory Policy Group Center for Medicare and Medicaid Services Amy.bassano@cms.hhs.gov 410-786-5674