The CMS is delaying a rule that would result in clinical labs losing $3.93 billion in Medicare payments over 10 years.
A final rule released last year lowered Medicare payments for laboratory tests to make them equal to what private insurers pay. The rule was set to take place on Jan. 1, 2018, and required labs to collect private payer data from Jan 1, 2016, through June 30, 2016. The data was to be submitted to the CMS by March 31, 2017. Labs said they needed more time to review data and ensure their accuracy.
On Thursday, the agency announced it was giving labs until May 30 to submit the reports.
Julie Khani, president of the American Clinical Laboratory Association, was thrilled by the delay. “It is imperative that modifications work in favor of patient access and recognize the value and role of diagnostics,” she said.
Medicare's current fee schedule for lab tests has been largely unchanged since it was established in 1984, according to the CMS. Under the current system, each lab determines its own payment rates based on regional rates.
Medicare has historically paid between 18% and 30% more than other insurers for some lab tests, an HHS Office of Inspector General report found.
The rule to lower the payments, which was mandated by the Protecting Access to Medicare Act of 2014, is expected to save $390 million in its first year of implementation.
Medicare-enrolled laboratories are a mix of national chains and small regional operations that concentrate on a specific population, such as nursing home residents. Physician offices also perform some tests that are reimbursed by Medicare.