AMA, McKesson Team Up on MDx Codes

McKesson’s Z-Code™ Identifiers came into the clinical lab and pathology spotlight when Palmetto GBA, the Medicare contractor for California, Nevada, Hawaii, and U.S. Pacific territories, last year began requiring their use in its controversial MolDx program, under which Palmetto determines coverage and payment for molecular pathology tests. That program is run under a separate contract with the Centers for Medicare and Medicaid Services and could go national if the agency opts for this course. Now the Z-Codes are in the news again as the American Medical Association (AMA) and McKesson have entered into a licensing relationship in which these codes will be grouped and indexed with corresponding molecular pathology codes in the AMA’s Current Procedural Terminology (CPT) code set. AMA introduced its CPT molecular pathology codes in 2012, and Medicare this year recognized them, assigning them to the Part B clinical lab fee schedule with payment rates to be determined by local contractors for their jurisdictions (NIR 12, 20/Nov. 8, p. 1; NIR 13, 3/Feb. 7, p. 1). Mapping Z-Codes to CPT Codes The licensing relationship, announced Feb. 26, offers health care systems a consistent, transparent way to identify and track MDx tests with identifiers and codes working in tandem, said AMA and McKesson in a joint statement. The result will be a new reference product that maps Z-Codes to CPT codes. The AMA will use the information that labs and manufacturers submit and then share in the McKesson Diagnostics Exchange to assign CPT code mappings where appropriate. Not all Z-Codes will immediately map to a CPT code, and, in many cases, multiple Z-Codes will map to a single CPT code. The new product will be available for licensing from the AMA early in 2014. Connecting Z-Codes with CPT codes is expected to yield many benefits, AMA and McKesson noted. Labs can map their tests to CPT codes where appropriate, identify more precisely which test was performed, and report this with the appropriate CPT code, potentially improving efficiencies in the reimbursement process. Payers will have more detailed information to identify tests performed, track outcomes of specific tests, and analyze their value.