ACLA Applauds CMS’ Decision on Medicare Payment for Molecular Diagnostic Laboratory Tests; Has Serious Concerns About Drastic Cuts to Pathology Services

November 2, 2012
For Immediate Release

Contact: Alan Mertz, 202-637-9466

ACLA Applauds CMS’ Decision on Medicare Payment for Molecular Diagnostic Laboratory Tests; Has Serious Concerns About Drastic Cuts to Pathology Services

Washington, DC. The American Clinical Laboratory Association (ACLA) applauds the release yesterday of a final decision by the Centers for Medicare and Medicaid Services (CMS) regarding Medicare payment for molecular diagnostic tests performed in clinical laboratories. CMS’ decision to keep those tests on Medicare’s Clinical Laboratory Fee Schedule (CLFS) will allow molecular geneticists to continue billing for these tests, and will allow clinical laboratories to be reimbursed for the important testing services they provide. ACLA has long supported keeping molecular diagnostic tests on the CLFS, where they have been paid for many years.

“ACLA agrees with CMS’ statement in the final rule that these tests ‘do not ordinarily require interpretation by a physician to produce a meaningful result,’” said Alan Mertz, President of ACLA. The decision to keep molecular diagnostic tests on the CLFS will ensure that Ph.D. geneticists can bill for the services they provide within the clinical laboratory.

CMS has yet to announce other important decisions about Medicare’s payment rates on the CLFS for 2013. Those include how Medicare will set payment for these tests (by “cross-walking,” which ACLA supports, or by “gap-filling,”) and whether Medicare will pay for certain molecular tests that include computer algorithms. Mertz commented, “We are pleased with CMS’ decision to keep molecular tests on the CLFS. However, we are concerned about other decisions in the final rule that may adversely affect clinical laboratories.”

Of great concern, the final rule includes a payment cut of over 50 percent for the technical component of certain anatomic pathology services performed by clinical laboratories and billed using the CPT code 88305. CMS’ decision to make this drastic cut – amounting to hundreds of millions of dollars – appears to be based upon a report of a single stakeholder that recommended reviewing the code’s pricing. That report also based its analysis on one clinical application of the tissue biopsy services included in code 88305. ACLA disputes the assertion that there exists a “typical” or “atypical” clinical case for CPT 88305 on which to base pricing, since wide variations exist among patients and among laboratories in the types of tissue being biopsied (e.g. breast or prostate) and the way specimens are handled (e.g. numbers of microscope slides created per biopsy.)

Another concerning decision in the final rule is that CMS states that the payment update, or year-to-year percent change in Medicare’s payment rates, for tests on the CLFS in January 2013 will be -3.0 percent (rounded.) This amount does not include the additional -2.0 percent cut that will begin in February 2013 as a result of sequestration. ACLA is examining CMS’ use of a higher-than-expected productivity adjustment as well as the decision to round up by 0.05 percent, which both result in additional payment cuts of tens of millions of dollars.

ACLA is the leading national trade association representing clinical laboratories. For more information, please visit our website at

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