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CMS Decides to Place MDx Test Codes Under Clinical Lab Fee Schedule

NEW YORK (GenomeWeb News) – In a final ruling, the Centers for Medicare & Medicaid Services has decided to reimburse the new molecular pathology claims codes published by the American Medical Association in its payment channel dedicated to laboratory tests.

However, for a minority of tests that require a doctor's interpretation, that portion will be accounted for via the payment pathway for physicians' services.

These changes to CMS's reimbursement procedures will be effective Jan. 1, 2013. Stakeholders can comment on the final ruling for 60 days.

Since the American Medical Association assigned new Tier 1 and Tier 2 CPT codes for approximately 100 genetic tests, CMS has been trying to figure out whether it would be more appropriate to place these new codes in the clinical lab fee schedule or the physician fee schedule.

The process has been a contentious one, with physician groups and the lab industry taking markedly different stances. Most labs are concerned that reimbursement for its tests will be negatively impacted if they are placed in the PFS, while physicians and pathologists believe that they won't be appropriately compensated for interpreting complex diagnostics if such tests are placed in the CLFS.

CMS issued a preliminary determination in August in which it hadn't yet figured out whether to place molecular pathology codes in CLFS or PFS, but asked stakeholders to provide input. The agency noted in its latest decision that in the public comments it received, there was little agreement among stakeholders as to whether the technical work related to a lab test or the interpretive aspects of the test were performed by a physician or a nonphysician laboratory professional.

"After reviewing the comments, we believe that the molecular pathology CPT codes describe clinical diagnostic laboratory tests that should be paid under the CLFS because these services do not ordinarily require interpretation by a physician to produce a meaningful result," CMS determined. "While we recognize that these tests may be furnished by a physician, after reviewing the public comments and listening to numerous presentations by stakeholders throughout the comment period, we are not convinced that all these tests ordinarily require interpretation by a physician."

Still, for cases that would require physician interpretation, CMS has created a temporary code (code G0452) which doctors can use to garner reimbursement from the agency for interpretation work they've performed as part of a molecular diagnostic "above and beyond the report of laboratory results."

Traditionally, the PFS pathway is used to pay for services such as surgical pathology, cytopathology, hematology, certain kinds blood banking services, clinical consultations, and interpretive clinical laboratory services. "For a handful of clinical laboratory services paid under the CLFS, we allow an additional payment under the PFS for the professional services of a pathologist when they meet the requirements for a clinical consultation service," CMS said.

CMS said it will monitor the use of this new, temporary PFS code and collect data on billing patterns in order to determine if this professional component code is "necessary and is not duplicative of laboratory reporting paid under the CLFS."

"In the near future, we intend to reassess whether this … code is necessary, and if so, in conjunction with which molecular pathology tests," the agency said.

Wall Street analysts have been watching closely for how CMS's decision on fee schedule placement of molecular pathology codes would impact reimbursement for certain tests, such as Myriad Genetics' BRACAnalysis for gauging breast and ovarian cancer susceptibility.

Noting that CMS has placed Tier 1/Tier 2 codes, among them the code describing BRACAnalysis, in the 2013 CLFS, analyst David Ferreiro of investment bank Oppenheimer & Co. wrote that "this removes the worst-case scenario of placement on the PFS, which would likely have cut into Myriad's reimbursement."

The pricing of BRACAnalysis, as well as for most molecular diagnostics described by the new codes, will likely be determined via the gapfilling process, as opposed to the crosswalking process. CMS hasn't yet detailed whether it will use the crosswalking or gapfilling method to determine pricing of tests.

BRACAnalysis is currently reimbursed at $3,340 by Medicare contractor Noridian. "We believe Noridian has no reason to significantly deviate from this price and we see $3,100, the Medicaid price, as a potential floor," said Ferreiro.

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