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Clinical Laboratory Fee Schedule

Outpatient clinical laboratory services are paid based on the Medicare Part B Clinical Laboratory Fee Schedule (CLFS) in accordance with Section 1833(h) of the Social Security Act. Payment is the lesser of the amount billed, the local fee for a geographic area, or a national limit. In accordance with the statute, the national limits are set at a percent of the median of all local fee schedule amounts for each laboratory test code. Each year, fees are updated for inflation based on the percentage change in the Consumer Price Index. However, legislation by Congress can modify the update to the fees.

Co-payments and deductibles do not apply to services paid under the Medicare clinical laboratory fee schedule.

Each year, new laboratory test codes are added to the clinical laboratory fee schedule and corresponding fees are developed in response to a public comment process. Also, for a cervical or vaginal smear test (Pap smear), the fee cannot be less than a national minimum payment amount, initially established at $14.60 and updated each year for inflation.

Critical access hospitals are paid for outpatient laboratory services on a reasonable cost basis, instead of by the fee schedule. Hospitals with fewer than 50 beds in qualified rural areas—those with population densities in the lowest quartile of all rural areas—are paid based on a reasonable cost basis for outpatient clinical laboratory tests for cost reporting periods between July 2004 and July 2006.

The Protecting Access to Medicare Act of 2014 (PAMA) that became law on April 1, 2014, required labs to report such data and the test volumes associated with that data, beginning on Jan. 1, 2016.

On Jan. 1, 2017, CMS will use the market data to set prices for the Part B Clinical Laboratory Fee Schedule. As currently written, PAMA specifies that CMS cannot cut the price of a specific lab test by more than 10% in each of 2017, 2018, and 2019, nor by more than 15% in each of 2020, 2021, and 2022. There is no limit on price reductions outlined in the law for years following 2022.

PAMA Cuts Have Simply Been Kicked Down the Road

PAYMENT RATE CUTS FOR CLINICAL LABORATORY TESTS, called for under the Protecting Access to Medicare Act of 2014 (PAMA), have been avoided temporarily—again.  A down-to-the-wire bill in Congress to keep the federal government funded into the new year in…

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Congress Averts PAMA Cuts to Lab Test Rates for 2023

CONGRESS ENACTED LEGISLATION LAST MONTH that suspends implementation of the next round of price cuts to the Medicare Part B Clinical Laboratory Fee Schedule (CLFS) that was scheduled to take effect on Jan. 1. This is a welcome development for the medical laboratory industry….

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2022’s Top 10 Lab Stories Confirm Challenging Times

CEO SUMMARY: There are valuable insights to be gleaned from The Dark Report’s “Top 10 Lab Industry Stories for 2022.” Several of this year’s story picks involve external forces reshaping healthcare in the United States in profound ways. Other story picks for 2022 illustrate …

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VALID and SALSA Acts Still Pending in Congress

CEO SUMMARY: Both the pending VALID Act and SALSA Act continue to push ahead as 2022 comes to an end. Meanwhile, a new bill centered on the Physician Fee Schedule may protect pathologist payments. These three different proposals share something in common:…

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On Appeal, ACLA Gains PAMA Victory in Court

CEO SUMMARY: Last month, a U.S. Court of Appeals issued a ruling that criticized how the Department of Health and Human Services originally implemented the Protecting Access to Medicare Act of 2014 (PAMA). This ruling was a win for the American Clinical Laboratory Association in its…

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PAMA Cuts Might Be Reduced to Zero for 2023

CEO SUMMARY: Congress may soon vote on a new bill that permanently reduces the amount of price cuts to Medicare Part B lab test prices, as specified under the Protecting Access to Medicare Act of 2014 (PAMA). The Saving Access to Laboratory Services Act (SALSA) eliminates a 15% paym…

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Coverage, Reimbursement Still Difficult for New Lab Tests

CEO SUMMARY: Bringing a new proprietary diagnostic test to market is an arduous process. It takes patience and planning to complete the journey from test development to payer reimbursement. This slow process stems from the fact that the healthcare reimbursement system is fragmented,…

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Labcorp to Buy Outreach, Manage Ascension Labs

CEO SUMMARY: In a blockbuster deal valued at almost half a billion dollars, Labcorp will manage dozens of hospital labs in 10 states on behalf of Ascension Health, one of the biggest health systems in the country. Labcorp will also spend $400 million to acquire certain assets of Asc…

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Non-COVID Part B Lab Spend Declined by 15.9% in 2020

MEDICARE PART B CLINICAL LABORATORY FEE SCHEDULE CUTS mandated by PAMA continue to bite deeply. A new government report shows that during fiscal 2020, the Medicare program spent 15.9% less for lab tests, when COVID-19 test payments are excluded.  The fed…

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Congress Votes: No PAMA Price Cuts for 2022

IT’S WELCOME NEWS THAT CONGRESS VOTED EARLIER THIS MONTH to defer the PAMA price cuts to the Clinical Laboratory Fee Schedule (CLFS) that were scheduled to take place in 2022. This is a positive development for the finances of the nation’s clinical labs, particularly the smaller, independent labs t…

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