House Bill Introduced to Address Rate-Setting for Molecular Tests

HHS would need to justify payment rates for tests and provide a reasonable period for reconsideration

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FEW PATHOLOGISTS OR CLINICAL laboratory directors would argue against revising the current Medicare payment policies for molecular and genetic tests. A bill proposed in Congress would do just that.

The process now in use by Medicare Administrative Contractors (MACs) is inefficient and opaque, according to pathologists and lab executives. The result is not many clinical labs were paid for molecular test claims submitted to MACs earlier this year. On January 1, the MACs started using a new process to assign prices to the 114 new Tier 1 and Tier 2 molecular test CPT codes on the Part B Clinical Laboratory Test Fee Schedule.

Payment Processing Slowed

In recent weeks, it is believed that most of the MACs have priced many of the new codes. One MAC priced only 22 codes, and some priced about 70 or more. MACs that have priced the new CPT codes have started to pay those labs submitting molecular test claims covered by those codes. Nonpayment caused labs to stop testing, lay off staff, and consider closing.

To address these problems, Rep. Peter Roskam (R-Illinois), sponsored HR 2085, the Diagnostic Innovation Testing and Knowledge Advancement Act of 2013. It was introduced on May 22. According to the Coalition to Strengthen the Future of Molecular Diagnostics, the bill is designed to improve the process for determining Medicare payment rates for diagnostic tests. The bill would be effective on enactment and apply to tests assigned a new or revised code this year.

The bill’s cosponsors are Brett Guthrie (R-Kentucky), Ron Kind (D-Wisconsin), Leonard Lance (R-New Jersey), Richard Neal (D-Massachusetts), Erick Paulsen (R- Minnesota), and Patrick Tiberi (R-Ohio).

If passed, the language in the bill would require Health & Human Services (HHS) Secretary Kathleen Sebelius to justify payment rates for new tests, explain the justifications clearly, and allow a reasonable period for reconsideration before the new rate is final.

Also, when setting rates, the HHS Secretary would need to consider claims data, what laboratories charge self-pay patients, what private insurers pay, what effect a new test would have on patient care, and the technical characteristics of new tests. Also to be included in the rate-setting process is a consideration of the resources labs need to develop, validate, and perform tests.

One other significant provision in the bill involves establishing a 19-member independent advisory panel that would include members with expertise in technical, clinical, and quality information. The committee could decide whether payments should be set by gapfilling or crosswalking. The bill specifies that members would have several kinds of specialized expertise and each would serve for six years.

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