Comprehensive Coding

With a new year comes a new update to the Centers for Medicare & Medicaid Services’ Clinical Laboratory Fee Schedule (CLFS). The 2024 update¹ has attracted attention not only because of the looming threat of the Protecting Access to Medicare Act of 2014 (PAMA),² but also because of the rapid advances in diagnostic testing over the course of just one year. What has changed since the 2023 update—and what clinical laboratory needs have yet to be met?

Good news and bad

With the passing of the Further Continuing Appropriations and Other Extensions Act of 2024, PAMA’s Medicare payment reductions of up to 15 percent on diagnostic testing have been suspended for one year, as have its associated data reporting requirements.³ “I think everyone is glad to hear that,” says Robin Zweifel, director of Coding and Billing Compliance at BioReference Laboratories and editor-in-chief of the American Pathology Foundation’s Pathology Services Coding Handbook. Although this is the law’s fifth delay to date, she adds, “We certainly look forward to seeing resolution around the Saving Access to Laboratory Services Act (SALSA)—a more permanent resolution to our concerns around PAMA.”⁴ Instead of cuts, fee updates for 2024 include a 3 percent Consumer Price Index-based increase to all laboratory services other than Pap smears, whose minimum payment has increased from $17.31 to $17.76 (a 2.6 percent increase).⁵

But some of the changes may not be what lab administrators or billing and coding professionals hoped to see. “The decision for gapfill of the new CPT codes for oncology gene panels is disappointing,” Zweifel says. “The CPT code descriptions are moving away from the level of definition that payers are accustomed to seeing; previously, the actual gene lists were provided, but those were removed this year. Although the new CPT codes for comprehensive panels describe the increasing complexity of those analyses, it was disappointing to see that Medicare did not take the industry’s advice to do a crosswalk and have instead moved to gapfill.” Why the difference? Crosswalked tests are considered similar enough to an existing test or combination of tests that those tests and their codes can be used to determine payment amounts. Novel tests with no existing comparators are instead gapfilled, a process that requires each Medicare Administrative Contractor (MAC) to determine its own local payment amount in the first year, from which a median rate across all MACs is then calculated for subsequent years.⁶ Payment information could take weeks to appear because each individual MAC must determine the cost and resource requirements of the testing. “We’re still waiting to see how those technologies will be reimbursed,” Zweifel explains. “That means some anxiety remains for labs involved in this kind of testing.”

Small panels, big impact

Many areas of oncology highly value the ability to test a small number of genes—for instance, when examining disease recurrence, progression, or even residual disease remaining after treatment in patients whose cancer type is already known or who have results from previous genetic testing. “There’s a lot of talk in the industry about the need for two- to four-gene panels, but we don’t really have a way to code for those smaller panels,” Zweifel explains. “The National Correct Coding Initiative policies have a gray zone around whether we are limited to coding a small gene panel as an 81479 (unlisted molecular pathology procedure) or whether we should be able to stack CPT codes as supported by American Medical Association guidelines⁷—but payers are trending towards wanting those small panels coded as 81479 and may not reimburse if we stack codes. That leaves laboratories in the position of needing to negotiate fair payment for their services or run the risk of claim denial if they stack codes to report the individual gene tests. I don’t think there’s currently an industry-wide standard practice regarding billing for small panels.”

It’s likely that these tasks will become easier as billing and coding practices catch up with advances in technology. “Right now, technology is advancing at a rate so fast that CPT codes can’t keep pace, especially given the bureaucracy that exists around their creation and rate determination.” Nonetheless, Zweifel believes the 2024 CLFS update is moving in the right direction. “We are trying to restructure the CPT codes in accordance with current technologies—for instance, by removing the gene lists from existing CPT codes for somatic cancer diagnostics. Having to keep a limited list of genes up to date was holding back the development of new CPT codes; removing that list from the description allows us to develop new codes like the ones for cell-free biopsy and comprehensive genomic panels. We can hope that similar CPT code changes may be introduced for inherited genes to impact diagnostic (rather than screening) outcomes in the oncology space.”

The next step forward

The 2023 CLFS update introduced CPT codes for digital pathology services—a category further expanded by the 2024 update. “There has been a lot of hype around digital pathology, but I’m waiting to see what the payers are going to do with those new codes,” says Zweifel. “When the digital pathology codes were introduced, they were recognized only as a technical component of pathology services—but the 2024 codes include some services that only have a professional component, so I don’t know how payers will handle those.” Details may emerge through trial-and-error claim submission; as payers are faced with these situations and make decisions on how to address coding and reimbursement, laboratories will learn how to structure submissions to maximize their chances of success. These outcomes may also influence further changes to the code set to deal with increasing demand for digital and computational pathology service reimbursement.

2024 has introduced a number of welcome changes: a further delay to PAMA and payment cuts, increased flexibility in molecular diagnostics, and additions to the list of digital pathology codes. Nonetheless, opportunities for improvement remain—and advances such as enacting SALSA and clarifying billing and coding practices in digital and molecular diagnostic services could protect both patients and laboratories now and in the future.

References:

1. 1. Centers for Medicare & Medicaid Services. Clinical Laboratory Fee Schedule. CMS.gov. https://www.cms.gov/medicare/payment/fee-schedules/clinical-laboratory-fee-schedule-clfs.

1. 1. H.R.4302 – Protecting Access to Medicare Act of 2014. Congress.gov. April 1, 2014. https://www.congress.gov/bill/113th-congress/house-bill/4302/text.

1. 1. H.R.6363 – Further Continuing Appropriations and Other Extensions Act, 2024. Congress.gov. November 16, 2023. https://www.congress.gov/bill/118th-congress/house-bill/6363/text.

1. 1. H.R.2377 – Saving Access to Laboratory Services Act. Congress.gov. March 29, 2023. https://www.congress.gov/bill/118th-congress/house-bill/2377/text.

1. 1. Centers for Medicare & Medicaid Services. Clinical Laboratory Fee Schedule: 2024 Annual Update. MLN Matters. December 29, 2023. https://www.cms.gov/files/document/mm13467-clinical-laboratory-fee-schedule-2024-annual-update.pdf.

1. 1. Code of Federal Regulations. 42 CFR 405.508. National Archives. January 5, 2024. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-414/subpart-G/section-414.508.

1. 1. Centers for Medicare & Medicaid Services. Chapter X: Pathology/Laboratory Services CPT Codes 80000–89999. Medicare National Correct Coding Initiative Policy Manual. January 1, 2024. https://www.cms.gov/files/document/medicare-ncci-policy-manual-2024-chapter-10.pdf.