OMB Starts Review of Medicare Lab Payment Final Rule

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By Michael D. Williamson

April 22 — A highly anticipated Medicare final rule on diagnostic lab payments is at the White House Office of Management and Budget for review, according to a government regulation tracking website.

The OMB started reviewing the final rule April 21, months behind schedule. Congress had mandated that the final rule be released by June 30, 2015, according to information about the regulation on the OMB's site.

A proposed version of the rule (80 Fed. Reg. 59,385), published in October 2015 by the Centers for Medicare & Medicaid Services, outlined plans to use data collected from clinical labs about how much they are paid by private insurers for tests to determine the new Medicare payment rates (187 HCDR, 9/28/15).

Lab payments under the new system would start Jan. 1, 2017, the proposed rule said. Medicare pays about $8 billion per year for the approximately 1,300 lab tests covered by the fee schedule. The proposed changes could result in $360 million less in Part B payments in fiscal year 2017 for Medicare-covered clinical lab tests.


It's difficult to gauge the impact of the final rule because it hasn't been released yet, Peter Kazon, a Washington-based attorney at Alston & Bird LLP, told Bloomberg BNA April 22. “The fact that it’s under review and coming out is overall a good thing,” he said.

However, there are still many unanswered questions for labs, Kazon said. For example, he said there's the question of which labs will have to report their payment data. In addition, what will the reporting time line look like, given delayed rulemaking process?

Julie Khani, a senior vice president at the American Clinical Laboratory Association, a lab industry group, told Bloomberg BNA April 22 that the group is pleased the OMB is reviewing the rule.

The rule would implement Section 216 of the Protecting Access to Medicare Act of 2014, or PAMA.

The ACLA is committed to successful implementation of the clinical lab fee provisions in PAMA, Khani said. She said successful implementation of the law would result in a predictable, market-based payment system that allows the industry to innovate while also maintaining patient access to lab services.

In comments (docket CMS-1621-P) on the proposal, which were due in November 2015, Quest Diagnostics, a major lab company, urged the CMS to delay the proposal's payment changes until 2018 (229 HCDR, 11/30/15).

Moreover, in March, more than two dozen members of the House Ways and Means Committee also urged the CMS to delay the new Medicare payment system for clinical lab tests (61 HCDR, 3/30/16).

To contact the reporter on this story: Michael D. Williamson in Washington at

To contact the editor responsible for this story: Brian Broderick at

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