While a variety of trade associations representing the laboratory sector have submitted their comments to the Centers for Medicare and Medicaid Services (CMS) regarding price-setting for molecular tests, their voices are unified on the issue: the process is flawed, and changes should be made immediately. In their remarks, leaders from the American Clinical Laboratory Association (ACLA), the Association for Molecular Pathology (AMP), and the California Clinical Laboratory Association (CCLA) have criticized CMS in how it has handled the shift from the code-stacking to the gap-fill methodology to determine molecular test pricing. Two of the associations suggested the use of the crosswalking process instead. CMS announced interim pricing on 114 Tier 1 and Tier 2 tests in May (NIR, May 9, 2013, p. 1). The interim pricing is based on rates determined by Medicare administrative contractors (MACs) using the gap-fill methodology. CMS is expected to release final pricing by Sept. 30 and will use that data to set national pricing for next year. However, many labs say that as a result of the delays in setting concrete prices, they have not even been paid by MACs for the molecular testing they have performed this year. The pricing released by the MACs […]
While a variety of trade associations representing the laboratory sector have submitted their comments to the Centers for Medicare and Medicaid Services (CMS) regarding price-setting for molecular tests, their voices are unified on the issue: the process is flawed, and changes should be made immediately.
In their remarks, leaders from the American Clinical Laboratory Association (ACLA), the Association for Molecular Pathology (AMP), and the California Clinical Laboratory Association (CCLA) have criticized CMS in how it has handled the shift from the code-stacking to the gap-fill methodology to determine molecular test pricing. Two of the associations suggested the use of the crosswalking process instead.
CMS announced interim pricing on 114 Tier 1 and Tier 2 tests in May (NIR, May 9, 2013, p. 1). The interim pricing is based on rates determined by Medicare administrative contractors (MACs) using the gap-fill methodology. CMS is expected to release final pricing by Sept. 30 and will use that data to set national pricing for next year.
However, many labs say that as a result of the delays in setting concrete prices, they have not even been paid by MACs for the molecular testing they have performed this year. The pricing released by the MACs has also varied widely. Many labs say the prices in some instances will not even cover their costs for performing the tests.
“Had the stacking codes still been in place or CMS required that the MACs determine pricing by Jan. 1, these laboratories would not face this challenging situation of providing much-needed patient care without compensation for the services already rendered,” AMP President Jennifer L. Hunt, M.D., said in her comments to the CMS.
“We repeatedly have voiced our concerns with the lack of transparency in the instructions that CMS has given to contractors who priced the molecular pathology tests and in the methods the contractors have used to arrive at their prices,” wrote ACLA President Alan Mertz. “Prices for several of the tests are set too low, and the proposed prices will not even cover the costs of furnishing some tests by some laboratories. We also are concerned that certain contractors used the gap-filling exercise inappropriately to create new non-coverage policies.”
According to a letter penned by Michael Arnold, president of CCLA, one of the most active state-level trade groups, the recent recoding of molecular tests by the American Medical Association led to a “re-pricing initiative” by CMS that translated to reimbursement cuts ranging from 20 percent to 80 percent.
Mertz and Hunt were also critical of the lack of transparency among the MACs and noted that few have been willing to engage in dialogues with the laboratories regarding price-setting. And in some instances, Mertz said, contractors appeared to simply copy the Tier 1 prices set by Palmetto GBA, which employed its MolDX program in part to arrive at its pricing.
“CMS did not provide adequate directions to the MACs on what data to collect; contractors did not understand nor did they have the resources to assemble appropriate costing data; the contractors did not have the resources to evaluate the costing data appropriately; and, finally, laboratories have difficulty accurately identifying all the cost information without specific direction,” Hunt wrote. “The premise that this process can lead to accurate and fair pricing policy cannot be supported.”
Arnold was highly critical of the gap-filling methodology itself. “This has historically proven to be a very flawed process at best in the very few single, isolated cases where it has been attempted in the past decade,” he wrote.
Both Arnold and Mertz suggested that the crosswalking process is a better methodology to use to set prices. Arnold wanted it applied retroactively to last Jan. 1.
Mertz also asked for assurance that when national lab prices are released, the “median price will be the median of all the contractor prices, not the median of the individual state prices set by the contractors.”
