Friday, August 31, 2018

House Messages CMS: Asks CMS to Address Panel Unbundling

Each year, annual budgets prepared at House and Senate come with something called "report language" which describes something of the rationale and purpose of the budget and may make numerous requests of an agency to look into one matter or another. 

This summer, the (health related) report language for House is  here and for Senate is here.

CMS and Chemistry Panels

CMS for decades has bundled together tests following CPT codes for common chemistry panels.  A ten-analyte panel might pay $15 as a panel even though each component tallied as a separate test might pay $60 or more.   With PAMA in 2018, CMS dropped the panel bundling rules and right now - if a set of tests fail to meet the exact definition of a panel - CMS pays at the individual line item rates. 

I discussed this for clinical chemistry in a blog in November 2017, here.   As shown in a clipping at bottom, 80053 panel had 29,000,000 uses at CMS.   If paid at the $13 panel cost, this is $377M.  If paid at the stack code analyte rate it's $82.88 or $2.2B.   The same thing can also happen in genetics; as shown in another clipping at bottom, CMS pays for Lynch panels as 81435+81436=$1444, but the genes included at a la carte prices look more like $3,334.

The message from the House to HHS regarding panels is:

"Clinical Laboratory Fee Schedule.  Inconsistencies in panel testing reimbursement in Medicare should be resolved to prevent wasteful government spending.  The Committee encourages the Administrator of CMS to develop and issue a panel pricing policy that ensures the agency is not paying more for a single clinical diagnostic laboratory test, or a group of individual clinical diagnostic laboratory tests, than it would pay for a clinical diagnostic laboratory testing panel that tests for the same analyte(s).  The Committee encourages the Administrator to apply the policy to all types of test panels."  (House report language, page 89.)

(See also a November 2018 GAO report on the same topic, here.)

OIG Guidance Now Dysfunctional

Labs can follow official OIG guidance, and it leads toward stack coding, not panel pricing.

OIG guidance discourages panel ordering, and encourages physicians and labs to provide only the most precise list of medically necessary tests.  If any one test on a ten analyte panel isn't necessary, then bill the 9 tests, please.   This guidance was written in an era when panels paid a fraction of the single test costs, BUT ALSO, coding and pricing with special rules meant that analyates could only pay LESS than a panel.  (E.g. 9 analytes would pay right about 90% of a ten-analyte-panel.  Today the nine analytes might pay 800% more than the ten-analyte-panel.)