§1395m–1 Improving Policies for Clinical Diagnostic Laboratory Tests

Summary

Labs that get most of their Medicare lab money must tell the government what private insurers pay for each clinical lab test and how many tests they did. Reporting started January 1, 2016 and is every three years, except advanced diagnostic tests must be reported every year. For ordinary (non-advanced) tests, no reporting is required from January 1, 2020 through April 30, 2026, but reporting is required from May 1, 2026 through July 31, 2026, and then every three years after that. Labs must report each private-pay price (after discounts, rebates, coupons, and other price cuts) and the number of tests at each price. An officer of the lab must certify the reports. If a lab fails to report or lies, the Secretary can fine the lab up to $10,000 per day. The reported data are confidential and cannot show the name of a specific insurer or the exact prices, except when needed by the Secretary, the Government Accountability Office, the Congressional Budget Office, or the Medicare Payment Advisory Commission. The Secretary had to set rules for data collection by June 30, 2015. Medicare payment for a test furnished on or after January 1, 2017 is set to the weighted median of the reported private-pay prices for the most recent data period, and that payment stays in effect until the next cycle. These payments cannot be changed by geographic or other routine adjustments. Year-to-year cuts are limited: no more than 10% in each year 2017–2020, 0% in each year 2021–2026, and 15% in each year 2027–2029 (with exceptions for new tests). New non-advanced tests get paid by “crosswalking” to a similar test or by a “gapfilling” process. Advanced diagnostic tests get a short initial payment based on their public list price for three quarters, then the regular method applies; if the initial payment was more than 130% of the later amount, the extra must be paid back. The Secretary must create temporary or permanent HCPCS codes for new tests, assign codes and publish rates for certain existing tests by January 1, 2016, set up an expert panel by July 1, 2015 to advise, follow local coverage determination rules for coverage decisions starting January 1, 2015, and transfer specified funds to CMS ($4,000,000 each fiscal year 2014–2018 and $3,000,000 each fiscal year 2019–2023). Defined terms in one line each: “applicable laboratory” = a lab whose Medicare-related revenues mostly come from the lab payment rules named in this law; “applicable information” = private-payor prices (after concessions) and volumes for each test; “data collection period” = the time the Secretary chooses for counting prices and volumes (often 12 months; for the 2026 reporting cycle it is January 1–June 30, 2025); “advanced diagnostic laboratory test” = a test sold only by its developer (not to other labs) that meets scientific or FDA-related criteria; “private payor” = health insurers and group plans, Medicare Advantage plans, and Medicaid managed care organizations.