ACLA: NCCI Guidelines Are a ‘Step Backwards’

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CEO SUMMARY: In a letter to the National Correct Coding Initiative, the American Clinical Laboratory Association (ACLA) raised significant concerns about new language in the policy manuals for Medicare and Medicaid. ACLA said the new NCCI guidelines for molecular and other tests requiring multiple steps for one specimen reduce transparency, increase the administrative burden on clinical laboratories and payers, and contradict long-standing coding guidance from both the AMA and CMS.

TWO DAYS after the National Correct Coding Initiative (NCCI) announced changes to the coding guidelines for certain lab tests, the American Clinical Laboratory Association (ACLA) charged that the changes would be impossible for clinical laboratories and the Medicare and Medicaid programs to implement.

The ACLA also said the changes would result in less transparency in lab testing, and the guidance would make it difficult to know which lab tests physicians were ordering, labs were performing, and Medicare and Medicaid were covering.

ACLA’s Letter to NCCI

In a letter dated Dec. 14 to NCCI’s then-Medical Director Niles R. Rosen, MD, Sharon L. West, ACLA’s Vice President, Legal and Regulatory Affairs, wrote that the changes were a step backward in transparency about testing, and “…put laboratories in a position of violating long-standing coding guidance set forth plainly in the American Medical Association (AMA) CPT Professional Edition codebook, [and also that] the new policies run counter to the way physicians order and laboratories perform analyses.”

ACLA sent copies of the letter to executives at the federal Centers for Medicare and Medicaid Services (CMS). In the letter, ACLA said NCCI should not implement the changes for several important reasons including:

  • The guidelines are confusing and inconsistent in how NCCI uses the word “procedure.”
  • The molecular pathology section of the guidelines contradicts long-standing coding guidance when clinical laboratories use next-generation sequencing (NGS) to evaluate multiple genes, such as when NCCI said labs should use a single code to report when a “laboratory procedure” produces multiple reportable test results.
  • The guidelines are counter to the scientific basis labs use when performing and reporting some tests.

Effective January 1, the new NCCI guidelines have far-reaching effects because they affect lab billing for molecular and genetic tests, and more routine tests, on one patient specimen for all Medicare and Medicaid beneficiaries, according to Joan Kegerize, JD, ACLA’s Vice President of Reimbursement and Scientific Affairs.

Defining a ‘Lab Procedure’

How CMS and NCCI define the term “procedure” in the new guidelines lacks clarity, West said. In a clinical and molecular laboratory, a procedure is generally considered any process that requires multiple steps to complete testing on a patient specimen.

“It is imperative—first and foremost— that NCCI explain to stakeholders what is meant by the term ‘procedure’ in the context of the new language added to the manuals,” West wrote in the letter to Rosen. “In common usage, a ‘procedure’ describes a series of steps taken in a certain order, without regard to results. In the context of NCCI procedure-to-procedure edits, a ‘procedure’ is represented by a single specific CPT or HCPCS code.”

But NCCI’s definition is unclear because the word ‘procedure’ is used differently in different sections of the new NCCI policy manuals for Medicare and Medicaid, she added.

“In one instance, the word appears to be used in the same way as in the procedure-to-procedure edits context (referring to a ‘tier 1 or tier 2 molecular pathology procedure CPT code…’),” she explained. “In another instance, the meaning is not clear at all,” she wrote, citing this wording from the NCCI manuals, “If a laboratory procedure produces multiple reportable test results….”

West added, “For any provider to comply with policies in the NCCI manuals, their meaning must be clear and definitions consistent and not defined in terms of reportable test results.”

The NCCI guidance on coding for molecular pathology testing also was problematic. In that section, the NCCI guidelines say, “If one laboratory procedure evaluates multiple genes utilizing a next-generation sequencing procedure, the laboratory shall report only one unit of service of one genomic sequencing procedure, molecular multianalyte assay, multianalyte assay with algorithmic analysis, or proprietary laboratory analysis CPT code.

“If no CPT code accurately describes the procedure performed, the laboratory shall report CPT code 81479 (unlisted molecular pathology procedure) with one unit of service….”

This wording contradicts long-standing coding guidance, West charged, adding that following this wording would increase the administrative burden on labs, Medicare Administrative Contractors (MACs) and state Medicaid agencies, and reduce the information Medicare and Medicaid collect about which tests are being performed for which patients.

CPT Codes for Genetic Tests

Given that the CPT Professional Edition codebook includes CPT codes for individual genes, labs submit claims using those appropriate codes to describe each gene evaluated using NGS, she wrote.

“Requiring a laboratory to bill an unlisted code, rather than use the available CPT codes that describe the specific genes evaluated and the specific analyses performed, runs counter to CPT and CMS guidance and would result in an unnecessary administrative burden for laboratories, the MACs, and state Medicaid programs,” she added.

To show how the guidelines could inconvenience patients and potentially increase healthcare costs, West provided an example. “Physicians seeking to determine whether their patient has a variant in a gene must receive both the sequencing and the duplication/deletion analysis,” she explained.

“Under the new [NCCI] policy, a physician would be required to bring the patient back for a subsequent office visit to collect a subsequent sample in order to receive the complete gene analysis,” noted West. “This would contribute to hardships and burdens on patients that are surely counter to CMS goals.” Although ACLA did not mention it in its letter, having patients return for a subsequent visit to collect a second specimen could incur additional costs to the healthcare system.

CMS Puts Its Focus on Bundled Lab Tests

TWICE SINCE LAST YEAR, the federal Centers for Medicare and Medicaid Services (CMS) focused closely on bundled tests for clinical and molecular lab testing. And each time, the lab industry questioned the logic behind this focus on bundled tests.

In November, the Government Accountability Office (GAO) issued, “Medicare Laboratory Tests: Implementation of New Rates May Lead to Billions in Excess Payments.” In the report, GAO said CMS stopped paying a bundled-payment rate for certain panel tests that could result in paying as much as $10.3 billion from 2018 through 2020, compared to estimated Medicare expenditures using lower bundled-payment rates for panel tests.

U.S. Senator Chuck Grassley (R-Iowa), Chairman of the Senate Finance Committee, questioned what he said was “the potential for a striking increase in costs to Medicare for laboratory services.” (See, “Senator Asks: Are Lab Test Payments Too High?” TDR, Feb. 4, 2019.)

To many, the GAO report was puzzling because Medicare’s National Correct Coding Initiative (NCCI) requires labs to report the CPT code for a panel (not the individual tests) if the laboratory performs all tests included in the panel, as the American Medical Association (AMA) defines such panels. In fact, labs generally do not unbundle tests included in the AMA’s organ and disease testing panels.

In the latest instance of its focus on bundled tests, the NCCI issued changes at year-end to its coding guidelines regarding procedure-to-procedure edits in which a lab bundles together two tier 1 CPT codes for a molecular pathology procedure. The changes appear to indicate a failure to understand the scientific basis for how labs run molecular tests, the ACLA said in a letter it sent to NCCI in December.

Scientific Basis Lacking

At the end of the letter, West addressed changes in the NCCI guidelines regarding procedure-to-procedure edits in which a lab bundles together two tier 1 CPT codes for a molecular pathology procedure. The changes appear to indicate a failure to understand the scientific basis for how labs run molecular tests.

Here is the wording in question from the NCCI guidelines: “Procedure-to-procedure edits bundling two tier 1 molecular pathology procedure CPT codes describe procedures that should not routinely be performed and reported together.”

In her letter, West said, “There is no scientific basis for stating that these procedures ‘should not routinely be performed and reported together;’ rather, they are commonly performed together. And, although ordered and reported together, they are separate and non-overlapping analyses performed by laboratories.

Different Analyses

“These analyses are not subsets of one another, or duplicative; rather sequencing variants and duplication/deletion variants require different analyses to determine their presence,” she added.

On April 26, CMS’ media relations department responded to a request for comment from The Dark Report, saying it was preparing a response to the issues the lab groups have raised and that it expected to send that response sometime during the week of April 29. We will include CMS’ comments in a future issue.

Contact Sharon West at 202-637-9466.


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