Proposed HOPPS Changes Would Allow Direct Billing of Molecular Pathology Tests & ADLTs

On July 13, the CMS proposed changes to Hospital Outpatient Prospective Payment System (HOPPS) rules for 2018. Here's a look at the three items that would affect laboratories that provide tests to Medicare patients on an outpatient basis.

1. 2.0 Percent OPPS Rate Hike
CMS is proposing an OPPS fee schedule rate increase of 1.75 percent for 2018 based on a projected 2.9 percent increase in the hospital market basket, minus both a:

• 0.4 percent adjustment for multi-factor productivity; and
• 0.75 percent adjustment required by the Affordable Care Act (ACA).

Bottom Line: When combined with other proposed policy changes, hospitals would receive overall OPPS pay increases of 2.0 percent in 2018, according to CMS estimates.

2. 1.9 Percent ASC Rate Hike
CMS is also proposing a similar increase in Ambulatory Surgical Center (ASC) payments based on a CPI urban consumers update of 2.3 percent minus both the 0.4 percent multi-factor productivity adjustment and mandatory ACA 0.75 percent adjustment.

Bottom Line: When combined with other proposed policy changes, ambulatory surgical centers would receive overall 1.9 percent ASC pay increases for lab and other covered outpatient services in 2018.

3. Revised Lab Date of Service Rules
The part of the new HOPPS proposal impacting labs most directly is the proposed changes to the rules for calculating the date of service (DOS) for outpatient lab tests.

Current Rules: The DOS for outpatient lab services is normally the date the specimen is collected. Exception: The date the test is performed is the DOS if:

• The doctor orders the test at least 14 days after a patient is discharged from the hospital;
• The specimen is collected during a hospital surgical procedure;
• Collecting the sample at another time would be medically inappropriate;
• Test results don't guide treatment provided during the hospital stay; and
• The test is reasonable and necessary for treating an illness.

When the so called "14 day rule" applies, the test is paid separately under Part B; in all other cases, it's bundled into the payment for the hospital stay.

Proposed Change: CMS is proposing to carve out exceptions to the 14-day rule that would allow labs to bill Medicare directly under the Clinical Laboratory Fee Schedule (CLFS) for certain molecular pathology tests and advanced diagnostic laboratory tests (ADLTs) that are: i. excluded from OPPS packaging rules; and ii. ordered less than 14 days after a patient's hospital discharge. The DOS for those tests would be the date of testing rather than specimen collection. CMS will issue final rules after collecting public comments on the idea.

Takeaway: Most of the proposed HOPPS changes are positive ones for labs. But pathologists didn't make out as well. CMS specifically rejected an industry recommendation to create a pathology composite to pay claims with only multiple pathology services and no other separable payable services such as a clinic visit or surgical procedure. Accordingly, where multiple conditionally packaged services billed on the same claim, paying services will continue to be bundled and payment made on the basis of the highest single paying service.