DURING RECENT MONTHS, some labs are reporting improvement in how their claims for certain molecular and genetic tests are being reimbursed. This is progress from the financial crises experienced during 2013 for many labs performing molecular and genetic tests.
Disruption in these payments was one of the clinical lab industry’s biggest stories during 2013. There was a major upheaval in coverage and payment guidelines associated with molecular and genetic tests because both government and private payers were not prepared to deal with the implementation of 114 new codes under the CPT code reimbursement process for specific molecular assays and genetic tests.
No claims paid in early 2013
In fact, during the first four months of 2013, few labs reported getting any payment from Medicare for lab test claims involving the new molecular CPT codes. It was not until May of 2013 that some labs began to see a flow of regular payments for some of these molecular test claims. (See TDR, May 28, 2013.)
There was a bigger aspect to this story than simply the introduction of new CPT codes for molecular and genetic tests. It was the Molecular Diagnostic Services Program (MolDX), a pilot CPT code reimbursement program developed and administered by Palmetto GBA, a Medicare Administrative Contractor, with the approval of CMS.
MolDX was implemented only in the JE (formerly J1) region of California, Nevada, Hawaii, and the Pacific Territories (now administered by Noridian Administrative Services) and then expanded into the J11 region of South Carolina, North Carolina, Virginia, and West Virginia (currently administered by Palmetto GBA). It is not yet a national program.
When a lab has a molecular or genetic test that it would like to submit to Palmetto for coverage and reimbursement decisions, it needs to follow the requirements of the MolDx program. This includes registering the genetic or molecular test with MolDx. One method to accomplish this is to obtain a unique Z-code identifier for that assay from the McKesson Diagnostics Exchange, then submit the necessary documentation concerning this lab test to the Medicare program.
MolDx officials can then use the Z-code number and supporting documentation for that unique molecular or genetic test to answer this question: should the test be covered by Medicare as reasonable and necessary? All affirmative coverages are published on the Palmetto website as LCD updates. From that point, the lab can submit the claim with the Z-ID and an appropriate CPT charge code. Covered Z- IDs are paid promptly.
To update this important story, THE DARK REPORT contacted a number of lab companies that perform proprietary molecular or genetic tests to learn about their experience at getting paid for these tests. In some cases, it seems that the MolDx program and use of the Z-code system has played a role in improving how quickly some health plans pay for genetic and molecular tests.