Title 42 › CHAPTER 7 — SOCIAL SECURITY › SUBCHAPTER XVIII — HEALTH INSURANCE FOR AGED AND DISABLED › Part B — Supplementary Medical Insurance Benefits for Aged and Disabled › § 1395m–1
Require certain clinical labs to report what private insurers pay for each lab test and how many tests they did. Starting January 1, 2016, labs that get most of their money under Medicare rules must send the Secretary information about private payor payment rates and test volumes for a time period the Secretary sets. For most tests this reporting is every three years, but for “advanced diagnostic” tests it can be yearly. Reporting must show the actual prices after discounts and rebates. Labs must report every different price they received for the same test and how many tests were done at each price. An officer of the lab must sign to say the report is true. The Secretary can exclude very small labs from reporting. Tests paid on a capitated or similar fixed-payment basis are not included. If a lab fails to report or lies, the Secretary can fine it up to $10,000 per day. The reported data are kept confidential so that specific payors, labs, or prices are not publicly identified, except when needed by the Secretary or certain federal reviewers. The Secretary had to make rules for collecting this data by June 30, 2015. Use the private-payor data to set Medicare payment amounts for tests furnished on or after January 1, 2017. Medicare will pay each test the weighted median private-payor rate from the most recent data period, with the weight based on how many tests each payor and lab reported. These payment amounts apply until the next data collection and do not get other usual adjustments. Reductions to payments are phased in: for 2017–2020 a test’s payment cannot drop by more than 10% from the prior year, for 2021–2026 no reduction is allowed, and for 2027–2029 a drop cannot exceed 15% in a year. New non-advanced tests initially get paid by “cross-walking” to a similar existing test or by a gap-filling process that considers charges, resources, and other payors; the Secretary must explain how the price was set. New advanced tests get paid for three quarters at their public list price when first sold; labs must report early for these tests. If that initial list price is more than 130% of the later market-based rate, the Secretary will recover the extra. The Secretary will create temporary and permanent billing codes for new tests, assign codes to existing tests by January 1, 2016, and may track tests with unique identifiers. An outside expert panel must advise the Secretary on new-test pricing and coverage. Medicare contractors must follow the local coverage determination process for test coverage decisions, and the Secretary may pick up to four contractors to handle coverage or claims. Funding transfers from the Medicare Supplementary Medical Insurance Trust Fund will support implementation: $4,000,000 each fiscal year for 2014–2018 and $3,000,000 each fiscal year for 2019–2023. During April 1, 2014 through December 31, 2016, advanced tests are priced under the old rules.
Full Legal Text
The Public Health and Welfare, Source: USLM XML via OLRC
Legislative History
Reference
Citation
42 U.S.C. § 1395m–1
Title 42, The Public Health and Welfare
Last Updated
Sep 23, 2026
Release point: 119-110