New CMS reporting requirements to hit clinical labs in early 2017

Lab work

If your practice bills Medicare for laboratory tests performed in the office, you may be required to report data to the Centers for Medicare & Medicaid Services in early 2017, writes Jennifer B. Madsen, health policy advisor at Arnold & Porter, L.L.P., in Healio.

As of January 1, 2018, Medicare will change the way it calculates its payment rates for lab tests, basing them on the payment rates paid by private payers. Medicare expects the difference between the rates private payers pay and the current Medicare Clinical Laboratory Fee Schedule rates to yield $5.2 billion in savings over the next decade, according to Madsen.

The change is driven by the Protecting Access to Medicare Act of 2014, and though the implementation date got moved back two years, labs whose data will be used to calculate the new rates must start reporting to the federal government in the first quarter of 2017, says Madsen. Over 90 percent of the clinical laboratories deemed “applicable laboratories” by CMS are in physicians’ offices, so Madsen warns that “determining whether you’re in or out--and documenting your rationale--is a critical action to take before January 1, 2017.”

For practices whose laboratories fit CMS’ criteria for an “applicable laboratory,” Madsen outlines the next steps:

  • Collect HCPCS codes, final payment rates from private payers and volume of tests paid at each rate for the period of January 1, 2016 through June 30, 2016. Madsen notes that “private payers include group and individual market health plans, Medicare Advantage plans and Medicaid managed care plans, and should include payments from secondary payers.”
  • Report the applicable information to CMS during between January 1, 2017 and March 31, 2017.
  • Have a senior executive in the practice certify the accuracy and completeness of the information.

Madsen expects CMS to issue further information in the fall, including the preferred format for data submission.

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