Medicare Dx Payment System Will Be Market-Based, More Transparent Under New Law
This article was originally published in The Gray Sheet
A new law makes vast changes to how clinical laboratory tests will be reimbursed by Medicare over the long term. Although the changes ultimately may lead to payment reductions, both test kits makers and laboratories applaud the new provisions. Reimbursement will better reflect the value that lab tests bring to the health care system, they say.
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The medtech industry will lose a champion in Congress when Senate Finance Panel Chair Orrin Hatch, R-Utah, retires at the end of the 2018 congressional session. Author of the Americans with Disabilities Act and the Children's Health Insurance Program law, Hatch has been a perennial supporter of device-tax repeal, introduced market-based pricing for lab test reimbursements, and sponsored deep cuts in taxes for corporations in tax reform legislation signed into law just last month. Might former Massachusetts governor and failed 2008 US presidential candidate Mitt Romney run for the soon-to-be vacated seat?
Test-makers and labs say the agency is missing large swaths of the market in making its "market-based" lab payment calculation, but CMS stands by its data, and finalized 2018 lab fee schedule rates. Could next steps be in Congress, or the courts?
The US Medicare agency was supposed to peg its Clinical Lab Fee Schedule reimbursement rates for 2018 to market-based prices supplied by labs under the 2014 Protecting Access to Medicare Act. The exercise might have increased payment rates for lab tests, but clinical labs say that the new Medicare rates actually make deep cuts that could disrupt access to laboratory services.