In This Issue...


New Test Reimbursement Bill Introduced

Representative Peter Roskam (R-IL) introduced legislation, H.R.2085, the “Diagnostic Innovation Testing and Knowledge Advancement Act of 2013," which would create a process for increasing Medicare payments for new laboratory tests. Under the legislation, the Department of Health and Human Services (HHS) would take into consideration a number of factors when using the gap-fill process to set payment rates for new laboratory tests. Among the factors CMS would be required to take into account include:

  • The tests impact on patient care;
  • The resources needed to develop, validate and perform the test;
  • Medicare claims data;
  • Laboratory charges to patients;
  • Private insurance rates; and
  • Other factors specified by HHS.

H.R.2085 would also establish an HHS Independent Advisory Panel to make payment recommendations regarding the test. The 19-member panel would be comprised of a variety of individuals with knowledge of the test and/or interest in its use, including patients, physicians, and laboratorians. The bill would also establish a process for assigning a temporary national HCPCS code to identify the test until a permanent HCPCS code was available.

The most controversial aspect of the bill is the use of the potential cost savings generated by a new test as a means of determining its payment rate. Not only would it be difficult to accurately quantify the savings associated with the test, but increasing payments for new tests could lead to cuts in reimbursement for existing tests if Congress were to make the adjustments in a budget-neutral environment. For a copy of the bill, please visit the congressional web site, THOMAS.

CMS Announces New Test Payment Meeting

On May 24th, the Centers for Medicare and Medicaid Services (CMS) announced in the Federal Register that it will hold its public meeting to receive input regarding the payment rates for new tests and those under reconsideration on July 10th in Baltimore.  The new codes fall within three categories: therapeutic drug assays, Tier 1 molecular pathology procedures, multianalyte assays with algorithmic analyses, and microbiology.  There are also 11 payment rate reconsiderations.  Those interested in presenting at the public forum need to register after June 10th on the CMS website.

HHS Announces Increase in Health IT Use

The Department of Health and Human Services (HHS) announced that more than 50 percent of physicians and 80 percent of hospitals have received Medicare or Medicaid incentive payments for utilizing electronic health records (EHRs).   This is a tremendous increase in the use of EHRs since 2008, when only 17 percent of physicians and 9 percent of hospitals were using electronic records.  The Administration hopes that these advances will improve care coordination, reduce duplicative tests and procedures, and improve patient outcomes.  More information on HHS advances in IT are available on the Department website.

CMS Projects IPAB Cuts Unnecessary for 2015

The Chief Actuary for the Centers for Medicare and Medicaid Services (CMS) recently completed a 5-year analysis of Medicare spending to determine whether new payment cuts are needed to reduce expenditures.  Under the 2010 health care reform law, the Independent Payment Advisory Board is to mandate program cuts if the five-year average of Medicare per capita spending exceeds pre-established growth rates.  According to agency financial analysts, per capita spending will average 1.46 percent, less than half of the 3.04 target.  A copy of the analysis is available on the CMS website.