American Association for Clinical Chemistry
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January 2011 Clinical Laboratory News: A Mixed Bag for Labs in New Fee Schedule

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January 2011: Volume 37, Number 1

A Mixed Bag for Labs in New Fee Schedule
Changes to Drug Testing Codes Could Equal Less Payment for Labs
By Bill Malone

The new lab fee schedule for 2011 released by the Centers for Medicare and Medicaid Services (CMS) includes 15 new codes (See Box, below), some of which will allow labs to receive better reimbursement. The bad news is that two codes for drug screening will make it difficult for labs to get paid more than a mere $20 when performing multiple drug screens for a single patient.

In an effort to avoid overpaying for CLIA-waived drug screening kits performed in physician offices, CMS added one new code and changed an existing code, both for qualitative, multiple drug screen testing. Ostensibly, the edited code—G0431, with reimbursement of $102.33—will cover instrument-dependent tests typical of a clinical laboratory. CMS designed the new code—G0434, which will be paid at $20.47—for use with CLIA-waived urine dipstick-type kits common in physician offices. However, many labs will find it challenging to actually use the better-paid G0431 code for their routine drug screens because of confusing language in the two codes’ descriptions.

In addition to specifying the new code (G0434) as specifically intended for CLIA-waived tests, CMS also added the term moderate-complexity to the code’s description. Meanwhile, it added the term high-complexity to the description of the revised code (G0431). This will effectively lock both physician office testing and most lab testing into the new low-paying code, explained Charles Root, PhD, founder and president of CodeMap, LLC. “This is a disaster for labs,” he said. “Currently, most instrumented drug classes are moderate complexity—even if the lab uses a large automated system, they’re simply not high-complexity tests. So CMS’s decision ignores reality.”

CMS intended to design a code that receives one payment regardless of how many drug classes are tested using a simple cup, card, or strip test, However, the agency’s new code descriptions have  in fact not only pulled down reimbursement for most labs, but also broken into new territory by using CLIA classification to describe a code, Root emphasized. “The use of CLIA classification as a means to determine payment is causing a lot of consternation in the lab community,” he said. “Back when CLIA first came into effect, CMS wanted to pay less for waived tests than for non-waived tests, and after a lot of wrangling and negotiation with the lab community, CMS agreed to pay all tests at the same rate, regardless of their CLIA classification. Now this decision for the 2011 fee schedule sets a new precedent that reverses that agreement.”

In order to avoid ratcheting down their reimbursement to the new G0434 code for waived and moderate-complexity testing, Root predicts that many labs will modify their existing moderate-complexity kits, thereby pushing them into the high-complexity category and maintaining eligibility for the better-paying code. “If you in any way modify the FDA-approved kit, then it automatically under CLIA becomes highly complex—technically a lab-developed test,” Root said. “Labs might also switch their reagents and use a third-party vendor, again making the test highly complex, which incidentally could be a tremendous opportunity to those third-party suppliers.” If labs take this route, they’ll still have to validate their modified test, but in this case, validation should not be challenging for most labs, said Root. “A lab can validate the test essentially by proving that it’s binding amphetamines, for example, and measuring accurately, and with maybe 50 or 60 runs, you’ve got it. You don’t have to prove anything clinically.”

Although the CMS decisions in the lab fee schedule are final, the agency has promised to provide guidance on using the new drug screening codes. Meanwhile, labs will have to pay close attention to their use of the codes when they bill Medicare. For other payers, labs can use the CPT code 80104, which should be reimbursed at the higher rate; however, they’ll have to keep in mind that this code is not on the lab fee schedule.

Reimbursement Boosted for Cell Function Assay
Reimbursement for Cylex’s novel ImmuKnow test nearly doubled in the 2011 lab fee schedule compared to last year, a major victory for the company after more than 2 years of negotiation with CMS. The ImmuKnow test measures a biomarker of immune function that assesses cellular immune status by detecting cell-mediated immune response in patients undergoing immunosuppressive therapy for organ transplant. The test measures the concentration of adenosine triphosphate released from circulating CD4 cells following in vitro cell stimulation with phytohemagglutinin. The test is intended to complement immunomodulatory therapy and helps physicians manage immunosuppression in posttransplant patients, reducing risks of infection and rejection. The test will now be reimbursed $191.19 compared to $97.30 in 2010 and $71.58 in 2009.


New Codes in 2011 Clinical Lab Fee Schedule

 New Code  Test  Fee
 G0434 Drug screen, other than chromatographic; any number of drug classes, by CLIA waived test or moderate complexity test, per patient encounter  $20.47
 82930 Gastric acid analysis, includes pH if performed, each specimen  $7.67
 83861 Microfluidic analysis utilizing an integrated collection and analysis device; tear osmolarity  $23.58
 84112 Placental alpha microglobulin-1, cervicovaginal secretion, qualitative  $90.64
 85598 Phospholipid neutralization; hexagonal phospholipid  $25.30
 86481 Tuberculosis test, cell mediated immunity antigen response measurement; enumeration of gamma interferon producing T-cells in cell suspension  $87.22
 86902 Blood typing; antigen testing of donor blood using reagent serum, each antigen test  $5.38
 87501 Infectious agent detection by nucleic acid; influenza virus, reverse transcription and amplified probe technique, each type or subtype  $72.22
 87502 Infectious agent detection by nucleic acid; influenza virus, for multiple types for subtypes, reverse transcription and amplified probe technique, first 2 types or subtypes
 87503 Infectious agent detection by nucleic acid; influenza virus, multiplex for multiple types or subtypes, multiplex reverse transcription and amplified probe technique, each additional influenza virus type or subtype beyond two (listed separately in addition to the code for primary procedure)  $29.22
 87906 Infectious agent genotype analysis by nucleic acid; HIV-1, other region (e.g. integrase, fusion)  $181.14
 G9143 Pharmacogenomic testing for warfarin response (only for labs participating in the Coverage with Evidence Development Study)  $169.87
 G0432 Infectious agent antibody detection by enzyme immunoassay technique, HIV-1 and/or HIV-2, screening  $19.30
 G0433 Infectious agent antibody detection by enzyme-linked immunosorbent assay technique; HIV-1 and/or HIV-2, screening  $19.30
 G0435 Infectious agent antibody detection by rapid antibody test, HIV-1 and/or HIV-2, screening