Laboratory Code Rebalancing FY2019-20
Laboratory codes currently utilize a fee-for-service rate methodology Most rates were set using a historical rate methodology for which documentation no longer exists The Office of the Inspector General (OIG) report, LABORATORY “Comparing Lab Test Payment Rates: Medicare Could Achieve Substantial Savings”, indicated that Medicare RATES payments for laboratory tests may be higher than other insurers. 1 BACKGROUND On June 17, 2016 CMS announced the release of its final rule implementing section 216(a) of the Protecting Access to Medicare Act of 2014 (PAMA) that requires reporting entities to report private payer rates paid to laboratories for lab tests, which will be used to calculate Medicare payment rates. 2
The Medicaid Provider Rate Review Advisory Committee (MPRRAC) was enacted in June of 2015 (Senate Bill 15-228) and exists to assist the Department of Health Care Policy & Financing (the MEDICAID Department) in the review of the provider rate reimbursements in Health First Colorado (Colorado's PROVIDER Medicaid Program). The committee is responsible for: RATE REVIEW Reviewing the report the Department submits each May 1 ADVISORY Reviewing any rate increase proposals or petitions sent COMMITTEE to the Department Taking public comment on the reports produced as part of this process Recommending to the Joint Budget Committee areas for process improvement
The MPRRAC reviewed laboratory procedure codes in 2016 and the review resulted in the following recommendation by the committee: After Medicare publishes new rates in November 2017, MEDICAID the Department plans to reevaluate laboratory service rates. The Department believes new CMS rates will be PROVIDER based on transparent and robust information, which will be a valuable resource for the Department’s rate setting RATE REVIEW process. ADVISORY The rate review process, which includes advice from COMMITTEE the MPRRAC, has helped inform the Department’s payment philosophy for fee-for-service rates: Where Medicare is an appropriate comparator, the Department believes that a reasonable threshold for payments is 80% - 100% of Medicare
With the addition of clinical laboratory diagnostic tests to the SSA through the Protecting to Access to Medicare Act (PAMA), CMS released the final rates for laboratory services January 1, 2018 LABORATORY Beginning January 1, 2018 Medicare utilized private payor rate information reported by applicable laboratories to REBALANCING determine Medicare rates for most laboratory diagnostic METHODOLOGY tests PAMA also established a phase in of payment reductions: CY2018-CY2020: reductions to payment rates cannot exceed 10% per year CY2021-CY2023: reductions to payment rates cannot exceed 15%
In accordance with the Departments payment philosophy and the MPRRAC recommendation to review the rates once the Medicare fee schedule was released the Department reviewed all laboratory fee-for-service rates and identified LABORATORY those rates falling outside of the benchmark of 80%-100% REBALANCING of Medicare rates As there were a large number of codes falling outside of the METHODOLOGY benchmark the Department choose to focus on the extreme outliers Codes with rates less than 20% of Medicare and greater than 200% of Medicare
The Department analysis identified procedure codes by level of rate relative to Medicare: % of Medicare # of Procedure Codes 20% or less 23 LABORATORY 21%-79% 246 REBALANCING 80%-100% 599 101%-199% 409 METHODOLOGY 200% or more 29 Most of the Department’s codes fall within the 80%-100% Medicare benchmark, with the largest range falling between 101%-199% of the Medicare rates
The Department identified 23 codes with rates less than 20% of Medicare 81007 81371 81536 82261 84375 P2031 LABORATORY 81260 81407 82017 82379 85366 81295 81438 82131 83080 87582 REBALANCING 81331 81507 82136 83987 89060 PROCEDURE The Department identified 29 codes with rates greater than CODE SET 200% of Medicare 80410 81216 81229 81251 81290 81330 81433 87506 81200 81220 81242 81252 81296 81376 81437 81203 81223 81243 81255 81298 81406 83605 81209 81226 81244 81266 81323 81420 87505
The Department reset these rates to the Medicare rates effective January 1, 2018 LABORATORY As stated previously, PAMA establishes a phase in of payment reductions, the Department is not utilizing the RATE phase in and all rates reflect the final rate regardless of total reduction to rate REBALANCING More information on the Medicare Clinical Laboratory rate METHODOLOGY methodology and PAMA can be found at the following link: https://www.cms.gov/Medicare/Medicare-Fee-for-Service- Payment/ClinicalLabFeeSched/PAMA-Regulations.html
The Department will post a laboratory rebalancing fee schedule on June 1, 2019 on the Provider Rates & Fee Schedules page of the external website: https://www.colorado.gov/hcpf/provider-rates-fee-schedule Additional information on laboratory rebalancing can be found at LABORATORY the above link under State Plan Rates and Information FEE SCHEDULE For additional information regarding laboratory rates please contact Trevor Abeyta at Trevor.Abeyta@state.co.us For additional information regarding laboratory policy please contact Raine Henry at Raine.Henry@state.co.us
Recommend
More recommend
