White House Finishes Review of Medicare Pay Rule for Labs

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By Michael D. Williamson

June 16 — Medicare payments for clinical lab tests are poised for an update under a long-delayed final rule that the White House cleared June 15.

The move indicates the rule on Medicare payments for diagnostic labs test from the Centers for Medicare & Medicaid Services could be released soon. The White House Office and Management and Budget reviews all major proposed and final regulations before release.

The OMB started reviewing the final rule April 21, months behind schedule (10 MELR 09, 4/27/16).

Impact

A proposed version of the rule (80 Fed. Reg. 59,386), published in October 2015, 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. 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.

The final rule has long been anticipated by the lab industry. In its November 2015 comments (docket CMS-1621-P) on the proposal, Quest Diagnostics, a large test company, urged the CMS to delay implementing the new system until 2018 (09 MELR 24, 12/9/15). Congress had mandated that the final rule be released by June 30, 2015, according to information about the regulation posted on the OMB's reginfo.gov site.

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

To contact the reporter on this story: Michael D. Williamson in Washington at mwilliamson@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

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