Last week, the Centers for Medicare & Medicaid Services (“CMS”) published in the Federal Register its long-awaited final rule implementing the significant payment and related changes for clinical diagnostic laboratory tests under the Medicare Clinical Laboratory Fee Schedule. The changes were directed by the Protecting Access to Medicare Act of 2014 (“PAMA”), which establishes a new formula and process to set Medicare payment amounts at the weighted median of private payor rates. Our client alert discussing the final rule’s key takeaways and the ways it differs from CMS’s proposed rule can be accessed here.
In its final rule, CMS delayed the PAMA-directed effective date by one year, until January 1, 2018. The additional time was intended to help alleviate, among other things, administrative and other burdens on industry. Payment updates will be calculated using private payor data from affected laboratories for a six-month collection period, beginning January 1 through June 30, 2016. Data for the first update must be reported to CMS between January 1 and March 31, 2017 and CMS will release the new Medicare rates by November 2017. The data collection and reporting time lines will be repeated every three years for most tests and every year for certain advanced tests. Details on registration and reporting procedures, as well as other operational requirements, are forthcoming. To ensure compliance, affected companies should begin preparations to understand and incorporate the complex regulatory criteria into their operations.