CMS released new quarterly instructions for hospital outpatient claims porcessing on May 18, 2023, and it includes an obscure paragraph highlighting some details of hospital lab-test claims processing. Code 0295U (Prelude) gets ADLT status, new claims processing indicator. Here's why, and we show how test pricing jumped from $1897 to $5435, or 2.9X.
Conditional Bundling: Q4, versus A
Since about 2014, Medicare has bundled almost all hospital outpatient lab tests "conditionally," meaning they are bundled if there is any same-day event to bundle them to (like an office visit or surgery). If there is no same-day service but the lab test, it's payable. This is outpatient payment status Q4. Every CPT and HCPCS codes on CMS Outpatient Appendix B has a payment indicator. Q4 is conditionally bundled; "A" is payable but on a different basis than the outpatient APC system.
Most Lab Tests are Q4! Conditionally Bundled
Almost all lab tests are Q4. However, exempt are "molecular pathology" tests which CMS defines in its practice as human DNA RNA tests. These are "status A." Also Status A are "ADLT" tests of the MAAA type. To be an ADLT test of the MAAA type, you must be covered by CMS and be a clinically unique test ("provide information not available from any other test.")
Why Most ADLTs were Already "A"
Now and then, a test is converted from normal status to ADLT status, and that has the potential to change its payment indicator from Q4 bundled to A separately payable. However, this status change is rare, because most ADLT tests are ALREADY genomic tests, so they start out in status "A".
A Rare Day, Like a Solar Eclipse: ADLT Status FlipFlops Payment Indicator
So May 18, 2023, is a rare day. The most recent ADLT test is the Prelude test, 0295U, which became an ADLT basedon a March 23, 2023 decision, effective April 1, 2023. The Prelude test is a recurrence risk score based on 7 proteins (via slides = immunohistochemistry) and 4 clinical variables (like size and margin status.) It's the first ADLT since March 2022, which was the first ADLT since June 2021. So new ADLT decisions have been seldom.
But most ADLT decisions don't change the hospital status indicator, because most ADLTs were genomic tests from the get-go. But not 0295U, which is immunohistochemical slides plus an algorithm. So it's a proteomic test at heart, and was classifed Q4. Now that it is an ADLT of the MAAA type, its outpatient payment indicator is upgraded from Q4 bundled to A, separately payable.
I Think It's a Big Deal - to Avoid Bundling Here
I think this is a fairly big deal, because clinical chemistry tests are bundled if there's an event, like a lumpectomy, to bundle them to, in the hospital outpatient setting. (I don't think that rule applies in the ASC setting). And while 0295U could have been separately payable as pathology and immunohistochemistry (under an APC for pathology), 0295U was placed on the Clinical Lab Fee Schedule, so it wouldn't be eligible for APC coding and processing as a physician service.
So, in transmittal CR13210, T12053, May 18, 2023, effective July 1, 2023, 0295U has "A" hospital outpatient status, effective backwards to April 1, 2023, the first quarterly date that follows its March 23, 2023 classification as an ADLT.
But Hospitals Won't Get Paid Directly, Prelude Will
For hospital outpatient lumpectomy specimens whose slides go to Prelude for staining and algorithm, only Prelude (not the hospital) will bill for it. That's because based on circa 2018 rules, when hospital outpatient tests (like genetic tests) are separately payable, the payment goes to the lab that performs the test.
0295U: A Closer Look
Definition: Oncology (breast ductal carcinoma in situ [dcis]), protein expression profiling by immunohistochemistry of 7 proteins (COX2, FOXA1, HER2, Ki-67, p16, PR, SIAH2), with 4 clinicopathologic factors (size, age, margin status, palpability), utilizing formalin-fixed paraffin-embedded (FFPE) tissue, algorithm reported as a recurrence risk score.
The test is for carcinoma in situ (DCIS), not invasive cancer.
Pricing Upward Bound
Beginning on April 1, the ADLT price is $5435. Their Laguna Hills, CA, CLIA license indicates they're probably in a MolDx state, but MolDx has said for two years it won't handle proteomic tests, only human DNA RNA ones, which would suggest it's not handled by MolDx. A search of the national Medicare Coverage Database for 0295U turned up no info on 0295U. 0295U was priced on the prior CLFS, up to March 20, 2023, at only $1897, giving it I believe hte largest jump (just below 3X) ever awarded via the ADLT process.
MolDx? Dex? Z? Noridian?
Prelude has a Z code, but no statement about coverage, within the MolDx DEX database, suggesting the coverage isn't in the "domain" of MolDx. This would imply that coverage is in the domain of Noridian, the regular MAC for California. In the ADLT application process, Prelude would have had to show confirmation of payment (equals coverage) from a MAC for at least one claim.
We didn't find an explicit coverage statement at Noridian about 0295U, but we did find a notice the code was being "developed for documentatioin" six months ago, in fall 2022. It would not have been surprising if the code, with an established CLFS price, might have autopaid at Noridian. I couldn't easily identify any press release or Google hit for Medicare coverage of Prelude.
The original ADLT decision in March 2023, was covered in an earlier blog.