Experts Say Labs May Start to Receive MDx Payments

At least seven Medicare contractors have posted prices for molecular CPT codes online

CEO SUMMARY: In the fourth month of the current year, there is plenty of confusion and uncertainty over how the Medicare program will establish prices for the new molecular CPT codes and when both government and private payers will begin to regularly reimburse laboratories. As of this date, even lab billing experts and lawyers are forced to rely on anecdotal evidence as to the current state of affairs. That leaves most clinical laboratories and pathology groups with few options, except to “sit, watch, and wait.”

AT THE MOMENT, all across the country, clinical laboratories and pathology groups are in a state of uncertainty as to both the level of reimbursement that will be paid for each of the new molecular CPT codes and when payments for these claims will begin.

Since January 1, the nation’s Medicare Administrative Contractors (MACs) have been trying to determine how much to pay for the molecular assays that fall under the 100+ new molecular test CPT codes assigned to them this year. Seven MACs (Cahaba GBA, Cigna Government Services, Noridian Administrative Services, NGS, NHIC Corp., Novitas Solutions, and Palmetto GBA) have posted prices on the web for some of the 104 tests, one expert said.

MACs Still Posting Prices

When it comes to posting prices, the MACs seem to fall into two categories. One group of MACs has yet to post a single price for any of the new molecular CPT codes. Another group of MACs has posted prices for at least some of the new molecular codes. Lab billing experts were aware of only one MAC (Cahaba) that had posted prices for all of the new molecular CPT codes, as of this date.

As a result of posting these prices, it is believed that those MACs are making payments now or will do so soon, perhaps by April 30, some billing experts told THE DARK REPORT.

Uncertainty over Payment

Yet, most clinical labs that provide molecular testing services have no certainty about when or how much they will be paid. Some labs are being paid for some tests but not for other tests. Some labs are not being paid. Some labs are being paid, but they’re getting less than they expected. Many labs do not know when they will be paid for molecular tests run this year.

Most laboratories and organizations that represent labs are unsure about when clinical laboratories and pathology groups can expect to be paid for molecular diagnostic tests. It’s almost as if luck—either good or bad—is playing a big role in whether or not an individual lab organization is getting payments for its molecular test claims.

“What we’ve heard is that not all labs are being paid,” said Genevieve Tang, Associate Director, Strategic Product Planning, at Quorum Consulting, a strategic pricing, reimbursement, and health economics firm in San Francisco, California. “Overall, the view is murky right now.

“Until we get more definitive information, it will be hard to say which MACs have been paying and which haven’t been paying,” she added. “In general, we’re finding that the majority of the MACs are not paying for molecular tests.

“In fact, as of this date, only three MACs—Cahaba, Noridian, and Palmettohave released payment rates for all or most of the new molecular codes,” she said. “The other MACs have released rates for only a handful of codes.

New Process for New Codes

“Both Cahaba and Noridian have communicated to laboratories that they will pay for molecular pathology tests by the end of the month,” she commented. “However, I don’t believe any laboratories have yet to receive reimbursement checks from Cahaba or Noridian.”

Cahaba serves Alabama, Georgia and Tennessee. Noridian serves Alaska, Arizona, Idaho, Montana, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming. Palmetto is the largest MAC and serves California, Hawaii, Nevada, North Carolina, South Carolina, Virginia, and West Virginia.

Billing For Molecular Tests

“Palmetto has instructed labs not to bill for tests that are not yet priced,” Tang added. “So far, Palmetto has priced only about 85% of the Tier I codes and Tier II analytes, and I believe some labs are billing for them. At this time, however, we are unsure if Palmetto has paid many claims.

“Of all the MACs, Palmetto was the first one to release payment rates, and so it could be sending out payments now,” she added. “One lab reported in February that National Government Services (NGS), the MAC serving New York and Connecticut, was holding all claims until it released a fee schedule,” stated Tang. “In mid-March, NGS released a fee schedule that listed nine codes. Since then, it’s not clear if NGS has been paying labs for those nine codes.

“At the 2013 American College of Medical Genetics and Genomics (ACMG) meeting in mid-March, some labs reported that they had stopped billing Medicare contractors because they didn’t see the point,” Tang said.

Like Tang, Jane Pine Wood, an attorney with the national law firm of McDonald Hopkins, has only anecdotal evidence about the existing situation. She acknowledges that Medicare contractors have struggled since January 1 to post the rates they expect to pay for these new tests.

Many Contractors Not Paying

“It’s all across the board,” Wood said of the situation nationally. “Even though many contractors are not paying because they don’t have rates yet, I’ve heard from some clients that a few payments are starting to trickle in. But there’s no way to quantify what’s happening—at least not yet. So far, it’s all word of mouth.

“Some Medicare contractors have issued fee schedules and there would be no reason not to pay labs once these contractors have a fee schedule,” she added.

Wood recommends that any lab provider can take the step of contacting its elected officials and educating them about the situation. “We have lab clients who are talking to their legislators,” observed Wood. “That’s something every laboratory provider can do.

“When you call your legislator, it makes perfect sense to explain that your lab is an employer and a taxpayer and that it is providing clinical services to Medicare beneficiaries as a laboratory contracting with a federal government program,” she continued. “Elected officials need to know that when a government program is not paying on a timely basis, it affects the lab’s ability to remain in business, employ people in the community, and deliver clinical services to Medicare beneficiaries.

“Outside of that, there is no blanket advice that would apply to all labs,” noted Wood. “Labs need to get advice from their advisers that is based on who the payer is and the applicable federal and state laws affecting that particular laboratory.

“For many reasons, it’s a very individualized discussion,” she noted. “When we get this question from a lab, it takes a while to develop a plan because each case is specific to unique facts.

“Every one of our lab clients has a different approach, depending on the situation,” continued Wood. “Many of our lab clients have patients who pay for the testing. Some client labs include the test charges on a physician bill.

“To handle the lack of payment for these molecular claims, we see some clients looking at drawing down lines of credit,” observed Wood. “Still other labs are looking at cooperative arrangements with labs that have a more diverse testing base or a stronger financial reach.

“These cooperative arrangements depend on the test and the payers involved,” she explained. “Perhaps one lab bills the other lab, or maybe one lab performs the test for another lab. These arrangements are based on who the payer is, what the contract states, and what the state law says. And, if it’s a federal payer, these arrangements depend on what the federal law says.

Cash Flow Issues For Labs

“Depending on their mix of work, some labs can wait for the Medicare contractors to start paying while they are getting paid by commercial payers,” she said. “But there can be cash flow issues for labs that run only molecular tests for Medicare patients or get very low rates. We have lab clients now getting extremely low rates and these labs are considering whether they can stay in business or whether they should stop offering these molecular tests.”

Labs Can Use CodeMap Site to Post Rates And See What Other Labs Have Been Paid

ONE PERSON WHO MAY HAVE THE BEST VIEW of what’s happening in each Medicare jurisdiction is Gregory Root, Chief Operating Officer and General Counsel of CodeMap, LLC. CodeMap is a company in Schaumburg, Illinois, that posts lab test payments online. The site is:

Labs that have been paid can go to the web site and post the rates they have received. CodeMap then computes an average rate for each test. As of last week, CodeMap had posted rates from four MACs: Cahaba, Noridian, Palmetto, and CGS, stated Root. CGS serves Kentucky and Ohio.

“From what we’ve heard, those clinical labs that only do molecular testing are getting hit pretty hard,” observed Root. “But it’s important to emphasize that no Medicare contractor has said that labs won’t be paid. It’s just that they haven’t been paid yet.

“As of last week (April 12) three clinical lab organizations had posted the molecular test fees that they had been paid on the CodeMap site,” reported Root. “As more Medicare contractors pay molecular test claims, labs will have a chance to update the site and thus help answer many of the questions that are going unanswered now.”


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