In This Issue...

Molecular Reimbursement Takes Center Stage

On January 1, 2013, the 104 new AMA CPT codes for molecular pathology tests took effect.  These assay-specific codes were created by the medical society to give CMS and its contractors more specific information on what tests were being ordered.  In the past, the agency was concerned that some laboratories were using the procedure-based ‘stacking’ codes to overbill the Medicare program, since the information provided did not tell the government what test was performed.    

Last year, CMS decided that contractors would gap-fill the new codes for 2013 rather than cross-walk them to existing codes as some in the clinical laboratory community recommended.  This meant that each contractor must collect pricing data for each test and set the test payment amounts on its own.  Unfortunately, many contractors missed the January 1st effective date for setting their payment rates. In those regions of the country where this has occurred, laboratories have not been paid for their claims, causing a cash shortfall for many esoteric facilities. 

In those areas where the prices were established, such as California, the payment rates are significantly lower than under the stacking codes.  For example, Palmetto, the Medicare contractor for that region is paying $69 for 81241 Factor V Mutation Analysis whereas it paid $136 under the stacking codes.  This payment reduction is seen across-the-board in many other molecular tests. 

Unfortunately, some contractors are reducing their molecular payments even further.  According to the American Clinical Laboratory Association, the Medicare contractor Novitas Solutions, which services the Mid-Atlantic and parts of the South, has set many of their payment rates the same as Palmetto’s.  Further, Noridian Administrative Services, which services the Mountain West, has set their fees at 89.5 percent of Palmetto’s.     

The contractors were required to submit to CMS their gap-fill fees by April 1st.  These rates are to be posted on the agency Web site by April 30th with a 60-day comment period.  This data will be used to set national payment amounts for the molecular tests starting in 2014.  GAU will let you know when the proposed rates are available.  To get this information sooner, please join AACC’s Government Affairs Listserv.

Senate Expresses Support for Device Tax Repeal

In a largely symbolic vote, the Senate approved an amendment to its budget resolution supporting the repeal of the $30 billion Medical Device Excise Tax.  Since budget resolutions do not have the force of law - they are nonbinding documents that advise the Upper and Lower Chambers on budget priorities - legislators can vote their conscience without having to deal with the budget implications of the change.  However, the size of the margin, 79-20, surprised many observers and may be an indication that there is sufficient bipartisan support (33 Democrats and one Independent voted in favor of the amendment) for repealing the tax.  AACC supports the repeal of this measure.  To see AACC's position, please visit the Association's Website.

CMS Issues Medicaid Payment Rule

On March 29th, the Centers for Medicare and Medicaid Services (CMS) published a final rule with comment on the expanded federal contributions to the Medicaid program under the Affordable Care Act.  Under the 2010 health care reform law, the federal government will pay a higher rate for newly eligible Medicaid recipients.  For the years 2014 - 2016, the federal government will pay 100 percent of the costs of the new beneficiaries, gradually declining to 95 percent in 2017, 94 percent in 2018, 93 percent in 2019, and 90 percent in 2020 and thereafter. 

Approximately 25 states and the District of Columbia have accepted Medicaid expansion, whereas 14 have said no and the rest remain undecided.  Many states are hesitant about agreeing to the increase, because of the long-term budgetary implications.  For some localities, the gradual federal reduction in payments could translate into hundreds of millions annually.   To get around this, a number of states are negotiating with the Obama Administration to use the additional funds to subsidize the purchase of private insurance through the health exchanges rather than expanding Medicaid.

A copy of the rule is available on the CMS Web site.  The agency also released a frequently asked questions document to answer questions about the Medicaid changes.

FDA Outlines Mobile App Oversight

The Food and Drug Administration (FDA) recently testified before the House Energy and Commerce Subcommittee on Oversight and Investigations regarding its plans to oversee mobile medical applications (apps).  The agency estimates that 500 million smartphone users will be using a health care app by 2015.  In its testimony, the FDA stated that it will focus its attention on mobile medical aps that are either intended to be “used as an accessory to a regulated medical device or transform a mobile platform into a regulated medical device.”  The FDA plans to release a final version of its July 2011 draft guidance in the coming months.  To read or view the FDA testimony, please visit the House Energy and Commerce site.