Laboratory and diagnostics companies are urging Congress to halt Medicare reimbursement cuts for hundreds of clinical tests set to take effect Jan. 31.
CMS plans to implement up to 15% reductions to Medicare payments for about 800 clinical laboratory tests, stemming from a 2014 law that requires Medicare to base payment rate updates in the Clinical Laboratory Fee Schedule on private payer data reported by laboratories.
The American Clinical Laboratory Association is lobbying Congress to pass the Reforming and Enhancing Sustainable Updates to Laboratory Testing Services Act, which would overhaul how Medicare sets payment rates for lab tests. ACLA — a national trade association representing clinical laboratories — includes members such as Labcorp, Quest Diagnostics and Mayo Clinic Laboratories.
The association argues that CMS’ current data collection process captured rates from fewer than 1% of labs, leading to unrepresentative 2016 data. This process has resulted in artificially low payment rates and nearly $4 billion in cuts to the Clinical Laboratory Fee Schedule from 2018 to 2020, the group said.
The proposed legislation would revise how Medicare sets payment rates for lab tests by using a broader commercial claims database, requiring labs to report data for certain specialized tests, moving to a four-year rate-setting cycle, capping annual payment reductions and excluding Medicaid managed care rates from the dataset.
The American Hospital Association has also voiced support for the legislation.
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