Medicare Laboratory DOS Proposal Threatens Laboratory Revenues

The Centers for Medicare and Medicaid Services (CMS) recently outlined several possible changes to its laboratory date of service policy for molecular pathology services, and the proposals could undermine the ability of clinical laboratories providing services to hospital outpatients to cover their operating costs. The proposal, outlined in the Outpatient Prospective Payment System & Ambulatory Surgical Center Proposed Rule, seeks input on several possible revisions to tighten up the laboratory date of service policy under the Clinical Laboratory Fee Schedule. Each proposal would place new limits on the ability of clinical laboratories to bill separately for molecular pathology services, which are currently exempt from the laboratory DOS policy. Currently, laboratories are able to bill separately for molecular pathology services performed during the laboratory DOS’s 14-day requirement, used by CMS to determine whether the service should be billed by the hospital or the laboratory. The net result of these policies would increase laboratory exposure to (lower) bundled payments or the need for laboratories to bill the hospital for services they provide outpatients.

Under the policy options outlined in CMS’s proposed rule, the Agency is considering the following policies:

- Requiring the ordering physician to determine applicability of the laboratory DOS exemption for molecular pathology services. Under this proposal, only those molecular pathology tests that the ordering physician states do not guide patient treatment provided during a hospital outpatient encounter (current or future) could be billed separately by the laboratory.

- Limit the molecular pathology exemption from the laboratory DOS policy to Advanced Diagnostic Laboratory Tests (ADLTS). CMS does not believe that the laboratory DOS’s 14-day requirement affects patient access to non-ADLT molecular pathology services and that an exemption on these grounds is not warranted.

- Exclude molecular pathology services provided by blood banks/centers from the laboratory DOS exception. CMS maintains that most molecular testing performed by blood banks and centers “is inherently tied to a hospital service.” As a result, most of these services should be billed by the hospital. Whether blood banks and centers would be able to seek reimbursement for their molecular pathology services would depend on the specifics of the underlying service.

ASCP will be submitting formal comments raising concern about CMS’s proposed DOS policies. Individuals interested in commenting on the DOS proposals may do so here until the proposed rule’s Sept. 27 comment deadline.

Other articles in the September 2019 ePolicy News:

NSH Endorses ASCP Position on Anthem Payment Rates
ASCP Still Urging Lab Community to Contact Congress About Surprise Billing
USPSTF Recommends Screening for Hepatitis C

To read more articles from ePolicy News click here.

For more information regarding ASCP's advocacy initiatives and policy positions, please contact ASCP's Center for Public Policy at (202) 408-1110.

ASCP ePolicy News is supported by an unrestricted grant from Hologic.