Medicare Program; Medicare Clinical Diagnostic Laboratory Tests Payment System

SUMMARY: This final rule implements requirements of section 216 of the Protecting Access to Medicare Act of 2014 (PAMA), which significantly revises the Medicare payment system for clinical diagnostic laboratory tests. This final rule also announces an implementation date of January 1, 2018 for the private payor rate-based fee schedule required by PAMA.

DATES: These regulations are effective on August 22, 2016.

FOR FURTHER INFORMATION CONTACT: Marie Casey, (410) 786-7861 or Karen Reinhardt (410) 786-0189 for issues related to the local coverage determination process for clinical diagnostic laboratory tests. Valerie Miller, (410) 786-4535 or Sarah Harding, (410) 786-4001 for all other issues.

SUPPLEMENTARY INFORMATION: To assist readers in referencing sections contained in this document, we are providing the following Table of Contents.

Table of Contents

I. Executive Summary and Background

A. Executive Summary

1. Purpose and Legal Authority

2. Summary of the Major Provisions of this Final Rule

3. Summary of Costs and Benefits

B. Background

1. The Medicare Clinical Laboratory Fee Schedule (CLFS)

2. Statutory Bases for Changes in Payment, Coding, and Coverage Policies for Clinical Diagnostic Laboratory Tests (CDLT)

II. Provisions of the Proposed Rule and Analysis and Response to Comments

A. Definition of Applicable Laboratory

B. Definition of Applicable Information

C. Definition of Advanced Diagnostic Laboratory Tests (ADLTs) and New ADLTs

1. Definition of ADLT

2. Definition of New ADLT

D. Data Collection and Data Reporting

1. Definitions

2. General Data Collection and Data Reporting Requirements

3. Data Reporting Requirements for New ADLTs

E. Data Integrity

1. Penalties for Non-Reporting

2. Data Certification

F. Confidentiality and Public Release of Limited Data

G. Coding for Certain Clinical Diagnostic Laboratory Tests (CDLTs) on the CLFS

1. Background

2. Coding Under PAMA

a. Temporary Codes for Certain New Tests

b. Coding and Publication of Payment Rates for Existing Tests

c. Establishing Unique Identifiers for Certain Tests

H. Payment Methodology

1. Calculation of Weighted Median

2. Phased-In Payment Reduction

3. Payment for New ADLTs

4. Recoupment of Payment for New ADLTs if Actual List Charge Exceeds Market Rate

5. Payment for Existing ADLTs

6. Payment for New CDLTs That Are Not ADLTs

a. Definitions

b. Crosswalking and Gapfilling

c. Proposal

d. Crosswalking and Gapfilling

e. Public Consultation Procedures

7. Medicare Payment for Tests Where No Applicable Information Is Reported

I. Local Coverage Determination Process and Authority To Designate Medicare Administrative Contractors for Clinical Diagnostic Laboratory Tests

J. Other Provisions

1. Advisory Panel on Clinical Diagnostic Laboratory Tests

2. Exemption From Administrative and Judicial Review

3. Sample Collection Fee

III. Collection of Information Requirements

IV. Waiver of Proposed Notice and Comment Rulemaking

V. Regulatory Impact Analysis Regulation Text

Acronyms

Because of the many terms to which we refer by acronym in this final rule, we are listing these abbreviations and their corresponding terms in alphabetical order below:

ADLT Advanced Diagnostic Laboratory Test

CCN CMS Certification Number

CDLT Clinical Diagnostic Laboratory Test

CEO Chief Executive Officer

CFR Code of Federal Regulations

CLFS Clinical Laboratory Fee Schedule

CLIA Clinical Laboratory Improvement Amendments of 1988

CMP Civil Monetary Penalty

CMS Centers for Medicare & Medicaid Services

CPT American Medical Association's Current Procedural Terminology

CR Change Request

CY Calendar Year

DNA Deoxyribonucleic Acid

FDA Food and Drug Administration

HCPCS Healthcare Common Procedure Coding System

HHA Home Health Agency

HIPAA Health Insurance Portability and Accountability Act of 1996

IRS Internal Revenue Service

LCD Local Coverage Determination

MAC Medicare Administrative Contractor

NCD National Coverage Determination

NLA National Limitation Amount

NOC Not Otherwise Classified

NPI National Provider Identifier

OPPS Hospital Outpatient Prospective Payment System

PAMA Protecting Access to Medicare Act of 2014

PFS Physician Fee Schedule

Q1 First Quarter

Q2 Second Quarter

Q3 Third Quarter

Q4 Fourth Quarter

RNA Ribonucleic Acid

SNF Skilled Nursing Facility

TIN Taxpayer Identification Number

I. Executive Summary and Background

A. Executive Summary

1. Purpose and Legal Authority

Since 1984, Medicare has paid for clinical diagnostic laboratory tests (CDLTs) on the Clinical Laboratory Fee Schedule (CLFS) under section 1833(h) of the Social Security Act (the Act). Section 216(a) of the Protecting Access to Medicare Act of 2014 (PAMA) (Pub. L. 113-93, enacted on April 1, 2014) added section 1834A to the Act. The statute requires extensive revisions to the Medicare payment, coding, and coverage requirements for CDLTs, as well as creates a new subcategory of CDLTs called Advanced Diagnostic Laboratory Tests (ADLTs) with separate reporting and payment requirements. In this final rule, we present our policies for implementing the requirements of section 1834A of the Act.

2. Summary of the Major Provisions

Section 1834A of the Act significantly changes how CMS will set Medicare payment rates for CDLTs that are paid for under the CLFS. In general, with certain designated exceptions, the statute requires that the payment amount for CDLTs furnished on or after January 1, 2017, be equal to the weighted median of private payor rates determined for the test, based on certain data reported by laboratories during a specified data collection period. Different reporting and payment requirements will apply to a subset of CDLTs that are determined to be ADLTs. The most significant policies adopted in this final rule include the following (more detailed descriptions follow the bulleted list):

* The implementation date for CLFS rates based on the weighted median of private payor rates.

* The definition of "applicable laboratory".

* The definition of "reporting entity" (the entity that must report applicable information).

* The definition of "applicable information" (the specific data that must be reported).

* The definition of ADLT.

* Data collection and data reporting schedules.

* Data integrity.

* Confidentiality and public release of limited data.

* Coding for certain CDLTs.

* The payment methodology for CDLTs.

* The local coverage determination (LCD) process and the authority to designate Medicare Administrative Contractors (MACs) for clinical diagnostic laboratory tests.

Section 1834A(b)(1)(A) of the Act requires that, for a CDLT furnished on or after January 1, 2017, the amount Medicare pays for the CDLT must be equal to the weighted median of private payor rates for the CDLT. After considering public comments recommending that we revise the implementation date of the CLFS, we have decided to move the implementation date to January 1, 2018. Thus, for a CDLT furnished on or after January 1, 2018, the amount Medicare pays will be equal to the weighted median of private payor rates for the CDLT.

Under the authority of section 1834A(a)(2) of the Act, which requires applicable laboratories to report applicable information to CMS to be used in establishing the new CLFS payment rates, we proposed to define an applicable laboratory as an entity that: (1) Reports tax-related information to the Internal Revenue Service (IRS) under a Taxpayer Identification Number (TIN) with which all of the National Provider Identifiers (NPIs) in the entity are associated; (2) is itself a laboratory, as defined in SEC 493.2, or, if it is not itself a laboratory, has at least one component that is a laboratory, as defined in SEC 493.2, for which the entity reports tax-related information to the IRS using its TIN; (3) in a data collection period, receives, collectively with its associated NPI entities, more than 50 percent of its Medicare revenues from the CLFS or Physician Fee Schedule (PFS); (4) for the data collection period from July 1, 2015 through December 31, 2015, receives, collectively with its associated NPI entities, at least $25,000 of its Medicare revenues from the CLFS; and (5) for all subsequent data collection periods receives, collectively with its associated NPI entities, at least $50,000 of its Medicare revenues from the CLFS.

--This is a summary of a Federal Register article originally published on the page number listed below--

Final rule.

CFR Part: "42 CFR Part 414"

RIN Number: "RIN 0938-AS33"

Citation: "81 FR 41036"

Document Number: "CMS-1621-F"

Federal Register Page Number: "41036"

"Rules and Regulations"