Many new clinical applications of mass spectrometry (MS) are evolving without the benefit of appropriate reimbursement policy from either the Centers for Medicare and Medicaid Services (CMS) or commercial payers. At the same time, in reaction to the overutilization of urine drug testing in pain management, payers have made draconian cuts to reimbursement for testing by traditional chromatography-MS (LC-MS) methods. Clinical laboratories now are at a point where we need new, more precise procedure codes not only to describe MS technology but also to enable payers to set appropriate reimbursement rates.

It is not unusual for reimbursement and codes to lag behind adoption of new technology. This lag can even benefit laboratories when existing payment rates are generous compared to the cost of the new technology. However, it can also lead to overutilization based on the attractive profit margins and lack of clear coverage policy. This has been the case with urine-based drug testing in patients taking opiates for pain management.

Issues With LC-MS Drug Testing

Prior to 2014, laboratories were paid about $20 per reported drug for quantitative urine drug tests performed by LC-MS methods. This meant that a large, physician-specified panel of tests could yield significant reimbursement. Aggressive promotion of such panels by reference laboratories and the growth of physician office labs performing these very profitable panels led to overutilization—and in many cases medically unnecessary testing. CMS and other payers have responded to the dramatic rise in testing by imposing such severe cuts that smaller providers may no longer be able to offer LC-MS–based drug testing services, especially in rural areas where such services are needed most. With new Healthcare Common Procedure Coding System (HCPCS) codes created by CMS and Current Procedural Terminology (CPT) codes from the American Medical Association (AMA) more accurately describing drug testing procedures, restrictive coverage policy is limiting the number of analytes tested for as well as the frequency of testing.

As payers work to determine final payment levels, providers and the in vitro diagnostics industry continue to debate exactly how testing should be reported. They remain undecided on whether to use CPT codes or HCPCS codes, as well as on how to set payment at a level that provides fair reimbursement without limiting patient access by forcing out of the market smaller laboratories or those specializing in drug testing. An overriding concern is that changes in both coding and reimbursement could imperil future clinical MS applications that have no relationship to drug testing.

Reimbursement for New and Existing Assays

Coding and reimbursement systems should accurately identify what is done so that payers can assign appropriate payment. Current CPT codes for individual analytes generally satisfy this criteria and pose no problem when the analyte is measured by LC-MS rather than other technology such as immunoassay. Most analyte-specific codes apply to any method, meaning payment is method-independent.

However, when labs use new methods such as MS to measure analytes not currently listed on the CMS Clinical Lab Fee Schedule—meaning the method does not have analyte-specific codes—they use method codes until analyte-specific codes become available. This is the case when labs use LC-MS to measure complex protein panels, specific genes, or emerging infectious organisms such as Zika virus. Importantly, this is not the case for new urine drug tests: labs report these using CMS HCPCS codes or drug class-specific CPT codes that include “not otherwise specified” drugs.

For example, if a laboratory uses LC-MS to measure vitamin D, coding and payment are straightforward. The CPT code for 25-hydroxyvitamin D (82306), like most analyte-specific codes, does not prescribe the method to be used, and thus is applicable to any method the laboratory has properly validated. CMS reimbursement for CPT code 82306 is $40.33 regardless of method. Similarly, immunosuppressants have analyte-specific codes with the same reimbursement irrespective of method.

Alternately, if a laboratory offers a “vitamin panel” including the quantitative measurement of vitamins C, D, E, B-12, and K by LC-MS, the five separate existing CPT codes describing each vitamin would be reported and paid individually since no code exists for a “vitamin panel.” The current total CMS reimbursement for the five vitamins in this panel would be $112.24 regardless of whether a lab measured all of the components in a single LC-MS procedure.

Prior to 2016, there were six separate CPT codes available to report new LC-MS or MS-only assays without analyte-specific CPT codes. Effective January 1, 2016, only two CPT codes are available for such procedures: one for chromatography-MS methods (82542 Column chromatography, includes mass spectrometry, if performed, non-drug analyte(s) not elsewhere specified, qualitative or quantitative, each specimen) and one for MS only (83789, Mass spectroscopy and tandem mass spectrometry, non-drug analyte(s) not elsewhere specified, qualitative or quantitative, each specimen). These codes can only be used for non-drug assays, and most importantly, include the term “each specimen,” which limits each code to only one unit of service per patient sample—even if the lab tests different specimen types (i.e. urine and serum).

Previously, labs could use LC-MS codes for “each unique combination of stationary and mobile phase,” allowing multiple units of service for complex situations. Since all of the prior codes were paid the same amount ($24.80 during 2015), the two revised codes were automatically set at the same rate for 2016 since they were considered revised rather than new codes, and consequently not eligible for repricing on the CMS fee schedule. The result is that even the most complex LC-MS or pure MS procedures are currently limited to a payment of $25.60 unless performed as an analyte-specific test already identified by a unique CPT code.

Stakeholders have asked CMS to reconsider these as new codes. If the agency accepts this reconsideration request, stakeholders will be allowed to comment on appropriate payment levels for the two remaining codes, hopefully convincing CMS to either increase reimbursement or adopt more descriptive HCPCS codes.

Possible Future Relief From PAMA

The Protecting Access to Medicare Act (PAMA) has potential to bring some relief, but the regulations will also mean that laboratories will need to change the way they think about achieving appropriate reimbursement levels for any new assay. Since PAMA eventually will require CMS to set reimbursement at the median of commercial rates for each test, payment amounts for new and unique assays including complex esoteric MS procedures will depend on convincing commercial payers of the clinical value of the test. Both coverage and payment level will be based primarily on whether the test results affect patient diagnosis or treatment and thereby improve outcomes and reduce overall healthcare costs.

PAMA also requires that CMS create test-specific codes to report all Food and Drug Administration-cleared tests as well as laboratory-developed tests. This expanded set of codes will be used to bill commercial payers. But until CMS is able to calculate a payment level based on these commercial payments, the agency will continue to set payment using existing cross-walking and gap-filling methods. However, CMS’s initial payment levels will be temporary and may increase significantly if commercial payers prove willing to pay more based on the demonstrated clinical value of a new assay or technology.

To illustrate, let’s assume a laboratory develops a proprietary LC-MS assay for a panel of proteins that guides cancer treatment. This assay is shown to significantly improve outcomes by an average of $10,000 per patient because it enables doctors to stop ordering ineffective chemotherapy treatments. As a result, commercial payers agree to pay $2,000 for this test. CMS subsequently will pay the same amount, even if the agency initially set the payment at $25.80 based on cross-walking payment to the existing 82542 code.

In summary, during the next few years all parties involved in developing new MS-based clinical assays will have to carefully monitor reimbursement versus costs and communicate effectively to commercial payers the value proposition for new tests. At the same time, all laboratories and MS suppliers will have to make sure that properly descriptive procedure codes are available either from CMS or AMA.

Charles Root, PhD, is founder and president of the reimbursement and compliance consulting firm CodeMap. +Email: charlesroot@codemap.com 


CLN's Focus on Mass Spectrometry is sponsored by Waters Corporation.

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