Is Medicare Zero for Three? Diagnostics Policy Proposals for CY2014

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Introduction -

Each July, the Medicare agency makes policy proposals for changes in reimbursement for services delivered by physicians, hospital outpatient centers, and independent laboratories. For CY2014, CMS proposed three major policy changes impacting laboratory services. CMS proposed to revisit all prices on the Clinical Laboratory Fee Schedule, to determine whether technology changes over 5 to 30 years (depending on the code) should trigger administrative repricing, and by how much. CMS proposed to cap prices paid to independent labs for physician molecular pathology procedures – those priced in RVUs – based on a crosswalk to payment rates for hospital outpatient services. Finally, CMS proposed to bundle all diagnostic tests, including laboratory tests, to visits or procedures where the test was used or ordered by a physician. Each of the three proposals represents a major change in policy, and the implementation of each of them raises substantial problems.

Summary -

Each year, Medicare issues three bodies of regulations, policies, and fee schedule changes for the upcoming fiscal year – one each for the inpatient system, for the hospital outpatient system, and for the physician fee schedule system. After 60 days of public comment, and 60 days of internal decision-­making, CMS sets its final policies for the next fiscal year, which begins about 60 days later.

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