CEO SUMMARY: It turns out that labs serving Tricare patients are going unpaid for certain LDTs, molecular, and genetic tests. The issue of nonpayment began in January 2013 when Tricare stopped paying for these tests that were billed under the new molecular CPT codes that replaced the previous stacking codes. Among the tests in question for which labs are not being paid are tests for cancer, cystic fibrosis, fragile X syndrome, and spinal muscular atrophy.
ONCE AGAIN, CLINICAL LABORATORIES are awaiting payment for molecular described in a letter to Tricare from Julie Khani, a Senior Vice President with the American pathology tests, only this time it’s the labs serving Tricare patients. Tricare has also stopped paying for certain laboratory-developed tests (LDTs).
Last week, Stars and Stripes, a newspaper for military members, reported that Tricare beneficiaries may have to pay out of pocket for certain diagnostic genetic tests ordered by their civilian physicians. These tests would be considered inappropriate or medically unnecessary according to the Defense Health Agency (DHA) which runs Tricare, the newspaper added. Tricare is the health agency for the federal Department of Defense (DOD). The Defense Health Agency manages payment for Tricare.
Labs Are Owed Millions
Stars and Stripes reported that labs have continued to perform these tests on behalf of patients in good faith and they are owed over $10 million for these unreimbursed tests. The tests in question are for cancer, cystic fibrosis, fragile X syndrome, and spinal muscular atrophy, among others, as described in a letter to Tricare from Julie Khani, a Senior Vice President with the Washington, DC-based American Clinical Laboratory Association (ACLA).
The issue of nonpayment by Tricare began in January 2013. That’s when Medicare contractors also stopped paying for certain molecular and genetics tests that had new CPT codes, Khani said. Medicare contractors have since started paying for molecular tests and never stopped paying for LDTs.
“Even though the nonpayment has persisted since last year, labs have continued to run these tests for patients while awaiting payment from Tricare,” noted Khani. “Now patients may need to pay for these tests themselves. Also, they may need to pay for certain LDTs, some of which Tricare has refused to cover as well.
“Last year, Tricare stopped paying for certain molecular tests billed under certain of the new molecular CPT codes,” recalled Khani. “Previously, these tests were billed using stacking codes and there was some confusion about how to use the new molecular CPT codes.
“When the switch to the new molecular CPT codes occurred at the beginning of 2013, Tricare placed the new CPT codes for more than 100 molecular pathology codes on the No-Government- Pay-Procedure-Code List,” she continued. “At that point, labs stopped being reimbursed for these claims, despite the fact that they continued to provide these vital services to Tricare patients.”
The Military Coalition (TMC), a consortium of military members and veterans’ organizations, has written to the DOD to seek assistance in restoring Tricare payment of these tests. In a letter dated January 9, the commission wrote, “We were recently informed that, after years of reimbursing for MoPath lab testing, Tricare suddenly and without notice placed these tests on the No-Government-Pay-Procedure-Code List. Since that time, Tricare has denied reimbursement for these critical medical tests.”
Labs Are Awaiting Payment
Many labs were hopeful that the lack of payment that started in January 2013 would be favorably resolved. “Initially there was an assumption among the labs that there was confusion about the new codes,” Khani said. “After all, these were not new tests. They were the same tests being billed under the new codes.
“However, repeated attempts to work with Tricare to resolve payment issues involving these critically important tests have been unsuccessful,” she added. “Now there is a growing concern about how non-payment for these tests will affect patient care. Labs continue to provide these vital services without being reimbursed, and that is not sustainable.”
Medicare contractors did not start paying labs that used the new codes until May at the earliest. Moreover, Medicare contractors declined to cover some tests or approved coverage at much reduced rates. It appears that the Defense Health Agency did not follow the lead of Medicare contractors.
“We fundamentally disagree with Tricare’s interpretation that LDTs are medical devices and they cannot be covered without FDA approval.,” explained Khani. “Just to be clear, LDTs are not devices, and FDA approval is not required.
“It is also important to note that Tricare’s regulations on coverage of LDTs has not changed,” she continued. “DHA’s interpretation of its policy has changed. We are very concerned that patients will lose access to diagnostic services. Eventually, patients will be forced to go without these tests unless they pay for them out of pocket.
“As we looked into this issue of non- payment, we discovered multiple inconsistencies in how the DHA has interpreted its own rules,” Khani said. “For example, DHA has stated it will not cover LDTs. Yet in many cases, LDTs such as Pap tests are covered.
“DHA’s policy is also inconsistent depending on where patients choose to receive care,” stated Khani. “DHA will pay for the lab tests in question when these tests are ordered at a military treatment facility (MTF).
Site of Service
“But that is not the case if a military member or someone from his/her family goes to one of Tricare’s network providers and a civilian physician orders these tests,” she added. “In this case, DHA will not reimburse the lab. Yet these are the same tests for which DHA will reimburse when ordered by a physician at an MTF!
“To be clear, laboratories are not providing these tests to Tricare for free,” emphasized Khani. “These labs continue to seek reimbursement and at this point they have not received payment for these critical services.”