Wednesday, November 1, 2017

CMS Publishes CY2018 OPPS Rule; Loosens Bundling on Hospital-Outpatient ADLT Tests



On November 1, 2018, CMS released the "public inspection" version of the CY2018 Hospital Outpatient rulemaking.   The rule is 282 pages long.  See final publication here, 82 Fed Reg 52356, November 13, 2017.   See discussion at Lexology, here.

For for addenda documentation, here.  CMS press release here, fact sheet here.

 For the complementary rulemaking, the 2018 Physician Fee Schedule, see here.

This blog focuses on changes to the 14 Day Rule in diagnostics.  For a general article on the 2018 rule, see HealthcareDive, here.  Changes to 340B and more.

Note:  An early version of this post said the rule applies only to ADLTs.  Nope.  It applies to Type A, not Type B ADLTs, and it applies to "molecular pathology tests currently excluded from bundling" but not (confusingly) to genetic tests in the GSP series.  

All this is: if I read the rule correctly, or if the CMS rule really says what CMS intended.  There may be errors in the CMS text.  

For example, in the 2018 OPPS excel spreadsheet called "Addendum B," which have payment instructions for each code, all regular lab tests are "N" - not separately paid - while genetic/genomic tests are generally A, including "GSPs," but in the MAAA series, tests are erratically code as status N, E1, or A.  Net-net, I think CMS misspoke when it writes the rule doesn't apply to GSPs.  I would think it will have to go through PLA codes and at least allow payable status to genetic ones, when it comes to its senses.

CMS did not discuss exclusion of PLA or GSP tests in July proposed rulemaking!

For Genomeweb's effort to cover the rulemaking, here (subscription).

The rule loosens Medicare's bundling rules, put in place in 2007, on hospital outpatient specimens.  The discussion is lengthy and runs from page 707 to 737. The logic and rules are a little complicated but here goes:
  • Since 2007, hospital outpatient lab tests can only be billed by the hospital, even if they are sent to an outside reference laboratory.   This rule is in place holds for 14 days after the date of tissue or blood procurement in a hospital outpatient center.  In essence, any test performed is "a service of the hospital" and must be billed by the hospital.   
    • For example, a Genomic Health Oncotype DX test could (I'm simplifying a bit) be billed only be the hospital if performed within 14 days of an outpatient lumpectomy, but if performed +14 days on the paraffin block, it could be billed by Genomic Health.
  • Since about 2013, CMS has bundled all clinical laboratory tests to the hospital outpatient event (e.g. lumpectomy, office visit, etc) - except human genetic/genomic tests.   These latter were still billable by the hospital on a line item basis, or, if later than 14 days, by the performing reference lab.
  • THE NEW RULE allows Advanced Diagnostic Laboratory Tests, or ADLTs, to be billed Medicare directly by the laboratory, when run on hospital outpatient specimens in the 0-14 day range, as well as "molecular pathology tests currently excluded from bundling."
    • Confusingly, the rule appears to exclude Genomic Sequencing Procedures, which are certainly human molecular pathology tests."  
    • The rule also appears to exclude PLA tests which in some cases will be genetic tests that are closely equivalent to genetic tests in the genetic code series.
ADLTs are defined under PAMA law, and later CMS policymaking, as sole source tests that are either (A) MAAA type tests or (B) FDA approved or cleared.  CMS states, confusingly, that the new rule applies only to "TYPE A" ADLT tests.

CMS Still Hasn't Certified Its First ADLT Test

CMS loaded some extra policy rules such as the test was independently developed by the laboratory and not licensed.   (I believe these latter rules will prove to be tortuous to apply or may be applied inconsistently.)  And that the test provides "unique information."   (Will CMS view several prostate MAAA tests as providing a unique class of information?   Will something cease to be an ADLT if someone produces a close copy?  Etc.)    CMS notes that tests released from the 14 day rule because they are ADLTs must be certified by CMS as ADLTs, a process I believe is not in place yet.

Is This an Extra Incentive to Fill Out ADLT Paperwork on Your ADLT?

There has been some question whether well-accepted popular MAAA tests that would qualify as ADLTs need to be certified as ADLTs, because it would convert them from 3-year to 1-year pricing updates, which might be unhelpful to the lab.   This new rule provides one incentive to go through the extra work to be certified as an ADLT, because it gives access to the 14 day rule exemption. 

The policymaking applies to hospital outpatient specimens, but not to hospital inpatient specimens.