Medicare Reimbursement: CMS Finalizes Controversial PAMA Fee Schedule

It's official. CMS is going forward with its controversial 2018 PAMA Clinical Laboratory Fee Schedule (CLFS). Regrettably, the final version closely tracks the preliminary one (See GCA, Oct. 24, 2017, for the details) with just a few minor adjustments:

1. Phase-In Reduction Cap of Cuts Over 10%
Situation: The National Limitation Amount (NLA) for a lab test HCPCS code is based on a percentage of the median of all local fee schedule amounts, including $0. Medicare pays whichever is lowest among the billed amount, local fee schedule amount or NLA.

Preliminary CLFS: The 23 HCPCS codes with a $0 NLA and a local fee schedule amount of over $0 in 2017 were slated for the full NLA treatment rather than the 10% reduction cap.

Final CLFS: The $0 local fee schedule amount test rates have been recalculated. Result: 16 of the 23 tests will qualify for the phase-in reduction cap.

2. Payment Floor for Diagnostic or Screening Pap Smear Lab Tests
Situation: The national minimum payment amount for a diagnostic or screening pap smear lab test is $14.60 for tests furnished in 2000. The national minimum payment amount for later years is then annually adjusted. The CY 2017 floor for these tests was $14.49. The CY 2018 update factor is 1.1%, which yields a CY 2018 floor of $14.65.

Preliminary CLFS: CMS didn't apply the national minimum payment amount floor to the 24 diagnostic or screening pap smear laboratory HCPCS codes for CY 2018.

Final CLFS: The minimum applies for eight of these codes; the remaining 16 will be paid the higher private payor rate-based payments, with the phase-in reduction cap where applicable.

3. Payment for Home Use Hemoglobin A1c (HbA1c) Kits
Situation: The payment rate for a diagnostic test for HbA1c labeled for home use by the FDA must equal the payment rate for HCPCS Code 83036 glycated hemoglobin test (and subsequent codes).

Preliminary CLFS: The CMS proposed rate of $22.50 for HCPCS code 83037 didn't apply the private payor rate-based payment for code 83036 of $11.99 even though 83037 is a home use test.

Final CLFS: The CY 2018 payment rate for HCPCS 83037 has been reduced from $22.50 to $11.99.

4. Removal of General Health Panel Code (HCPCS 80050)
Situation: HCPCS 80050, a bundled code that includes a comprehensive metabolic panel (HCPCS code 80053), thyroid stimulating hormone test (HCPCS code 84443) and a complete blood count (HCPCS code 85025), is not payable under Medicare.

Preliminary CLFS: CMS listed 80050 as a payable code.

Final CLFS: HCPCS 80050 has been removed from the list of payable codes.