PAMA

Medicare Reimbursement: Part B Lab Payments in Final Year before PAMA

Part B payments for lab tests in 2017, the final year under the old reimbursement rules, totaled $7.1 billion, up slightly from the $6.8 billion Medicare paid in 2016 and little changed over the four-year baseline period leading into the new PAMA market-based pricing system, according to an OIG report.

How Medicare Spent Its $7.1 Billion for Lab Tests in 2017
Tests Beneficiaries Labs Providers
433 million: total tests billed
3.4: average number of tests received by beneficiaries per day
17: average number of tests per day for top 1% of beneficiaries
28 million: beneficiaries that received at least one test
16: average number of tests per beneficiary
86: average number of tests per beneficiary among top 1% of beneficiaries
56,859: labs that received Medicare payments
$125,388: average payments per lab
$1.1 billion: payments to top 3 labs
655,771:providers that ordered lab tests
466: average tests ordered per provider
5,964: average tests ordered by top 1% of providers

Source: OIG, “Medicare Payments for Clinical Diagnostic Laboratory Tests in 2017
* Note: For a comparison to 2016 data, see NIR, Oct. 2017, page 1

What Medicare Paid for Top 25 Lab Tests
While the top 25 most billed tests always generate the lion’s share of Clinical Laboratory Fee Schedule (CLFS) payments, that trend was even more pronounced in 2017:

Payments for Top 25 Lab Tests 2014-2017
Year Total Percentage of All CLFS Payments
2017 $4.5 billion 64%
2016 $4.3 billion 63%
2015 $4.1 billion 58%
2014 $4.2 billion 59%

Other findings:

  • 17 of the top 25 tests were in the top 25 for all four years of the baseline period;
  • The top five tests accounted for $2.2 billion, or 30% of all lab test payments in 2017;
  • The rankings of the top five tests didn’t change in four years;
  • One percent of labs (272 out of 27,171 labs) received 55% of all Medicare payments for the top 25 lab tests in 2017.
Top 10 Lab Tests Based on Medicare Part B Payments in 2017
Rank Test Description & CPT Code National Limitation Amount Number of Tests (in millions) 2017 Medicare Payments (in millions) Changes from 2016 Payments (in millions)
1 Blood test, thyroid-stimulating hormone (TSH) (84443) $23.05 21.5 $484 +$1.6
2 Blood test, comprehensive group of blood chemicals (80053) $14.49 41.6 $473 +$3.0
3 Complete blood cell count and automated differential white blood cell count (85025) $10.66 41.5 $432 -$1.3
4 Blood test, lipids (cholesterol and triglycerides) (80061) 28.9 $415 +$4.4
5 Vitamin D-3 level (82306) $40.61 8.9 $348 -$1.9
6 Drug test(s), definitive, 22 or more drug class(es), including metabolite(s) if performed (G0483) $253.87 1.3 $307 +65.3
7 Hemoglobin A1C level (83036) $13.32 19.7 $257 +$6.2
8 Testing for presence of drug (80307) $79.81 3.3 $240 New code in 2017
9 Drug test(s), definitive, per day, 15-21 drug class(es), including metabolite(s) if performed (G0482) $204.34 0.8 $162 +$35.8
10 Blood test, basic group of blood chemicals (80048) $11.60 13.2 $130 -$3.7

Source:OIG, “Medicare Payments for Clinical Diagnostic Laboratory Tests in 2017

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