Lab industry lobbying has led to a minor uptick in some molecular coding prices unveiled earlier this year by one of the regional Medicare administrative contractors (MACs), but observers say many test prices remain well below the threshold of covering expenses.
The uptick in several Tier 1 codes by Palmetto GBA and a single Tier 2 code by Noridian comes just days before the Centers for Medicare and Medicaid Services (CMS) is expected to unveil the draft prices for more than 100 molecular pathology codes, which were moved on Jan. 1 to the clinical laboratory fee schedule. Medicare contractors were instructed to use gap-filling to determine pricing for the codes.
Earlier this month, Palmetto upped the payments on eight higher-volume codes—from 9 percent for KRAS, code 81275, to as high as 189 percent for the Cytochrome P450 2D6 test, code 81226. For the former test, the price rose from $225.88 to $246.40, while the latter jumped from $278.93 to $426.43.
The average nonweighted increase was 75 percent, although three of the codes received a bump below 15 percent.
The rise in the payments is primarily the result of lobbying by the California Clinical Laboratory Association (CCLA). Palmetto covers the Golden State and Nevada. The CCLA worked in conjunction with XIFIN, a San Diego-based revenue cycle management firm, and Diana Voorhees, whose Salt Lake City-based consulting firm specializes in coding issues.
Officials said that XIFIN worked as an intermediary to deliver cost data from 15 labs in California to Palmetto, guaranteeing that proprietary financial information did not wind up in the hands of rival labs.
“They were able to use us as an honest broker,” said Rina Wolf, XIFIN’s vice president of commercialization strategies, consulting, and industry affairs.
However, the new prices still in many instances won’t be profitable for the labs, according to CCLA President Michael Arnold.
“It’s produced some results, but it’s been insufficient so far,” Arnold said, although he conceded some headway has been made.
In the meantime, Arnold said the venture capital community—which is heavily involved in molecular testing and laboratories—has been expressing concern about the low pricing that the MACs have disclosed under the new codes. If they remain in place, it could impact future investment in the sector, he indicated.
One California lab, Hunter Laboratories in Campbell, has a bigger problem: For the moment at least, Palmetto is denying payment for ApoE, a test to assess the risk of cardiovascular disease.
According to Hunter CEO Chris Riedel, Palmetto is “flat out wrong” about the value of the test, which he said is especially valuable for cardiologists and lipidologists.
“I don’t blame Palmetto as much as I do CMS, which gave the MACs a short timetable to get this done,” Arnold said.
He noted that some of the other MACs were also influenced by Palmetto, which was the first to release its pricing.
In the meantime, CMS is expected to release draft molecular code pricing from the MACs any day now. Stay tuned to
www.G2Intelligence.com for updates
