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  • Washington Highlights

    CMS Issues Final Rule on Medicare Payment Rates for Clinical Lab Tests

    Gayle Lee, Director, Physician Payment & Quality

    The Centers for Medicare and Medicaid Services (CMS) June 17 issued a final rule that would require certain laboratories performing clinical diagnostic lab tests to report to CMS the amounts paid by private insurers for the lab tests. Beginning January 2018, Medicare will use the private insurer rates to calculate Medicare payment rates for laboratory services paid under the Clinical Laboratory Fee Schedule (CLFS).

    If an applicable laboratory receives at least $12,500 in Medicare revenues from laboratory service paid under the CLFS and more than 50 percent of its Medicare revenues are from laboratory and physician services, the entity would be required to report the private payer rates. This would mean that most physician office laboratories, smaller independent labs, and hospital laboratories will not be required to report the private payer rates for these tests. Although they would not report the payer rates, they would be paid based on the new rates in 2018 for any tests billed under the CLFS.

    For the system’s first year, laboratories will collect private payer data from Jan. 1, 2016 through June 30, 2016, and report it to CMS between Jan. 1, 2017, and March 31, 2017. A special category of tests, advanced diagnostic laboratory tests (ADLTs), will be paid at the actual list charge for three calendar quarters.