Laboratory Code Rebalancing FY2019-20 Laboratory codes currently - - PowerPoint PPT Presentation

Laboratory Code Rebalancing

FY2019-20

LABORATORY RATES BACKGROUND

 Laboratory codes currently utilize a fee-for-service rate methodology  Most rates were set using a historical rate methodology for which documentation no longer exists  The Office of the Inspector General (OIG) report, “Comparing Lab Test Payment Rates: Medicare Could Achieve Substantial Savings”, indicated that Medicare payments for laboratory tests may be higher than other insurers.1  On June 17, 2016 CMS announced the release of its final rule implementing section 216(a) of the Protecting Access to Medicare Act of 2014 (PAMA) that requires reporting entities to report private payer rates paid to laboratories for lab tests, which will be used to calculate Medicare payment rates.2

MEDICAID PROVIDER RATE REVIEW ADVISORY COMMITTEE

 The Medicaid Provider Rate Review Advisory Committee (MPRRAC) was enacted in June of 2015 (Senate Bill 15-228) and exists to assist the Department of Health Care Policy & Financing (the Department) in the review of the provider rate reimbursements in Health First Colorado (Colorado's Medicaid Program). The committee is responsible for:

 Reviewing the report the Department submits each May 1  Reviewing any rate increase proposals or petitions sent to the Department  Taking public comment on the reports produced as part

• f this process

 Recommending to the Joint Budget Committee areas for process improvement

MEDICAID PROVIDER RATE REVIEW ADVISORY COMMITTEE

 The MPRRAC reviewed laboratory procedure codes in 2016 and the review resulted in the following recommendation by the committee:  After Medicare publishes new rates in November 2017, the Department plans to reevaluate laboratory service

• rates. The Department believes new CMS rates will be

based on transparent and robust information, which will be a valuable resource for the Department’s rate setting process.

 The rate review process, which includes advice from the MPRRAC, has helped inform the Department’s payment philosophy for fee-for-service rates:

 Where Medicare is an appropriate comparator, the Department believes that a reasonable threshold for payments is 80% - 100% of Medicare

LABORATORY REBALANCING METHODOLOGY

 With the addition of clinical laboratory diagnostic tests to the SSA through the Protecting to Access to Medicare Act (PAMA), CMS released the final rates for laboratory services January 1, 2018  Beginning January 1, 2018 Medicare utilized private payor rate information reported by applicable laboratories to determine Medicare rates for most laboratory diagnostic tests  PAMA also established a phase in of payment reductions:

 CY2018-CY2020: reductions to payment rates cannot exceed 10% per year  CY2021-CY2023: reductions to payment rates cannot exceed 15%

LABORATORY REBALANCING METHODOLOGY

 In accordance with the Departments payment philosophy and the MPRRAC recommendation to review the rates once the Medicare fee schedule was released the Department reviewed all laboratory fee-for-service rates and identified those rates falling outside of the benchmark of 80%-100%

• f Medicare rates

 As there were a large number of codes falling outside of the benchmark the Department choose to focus on the extreme

• utliers

 Codes with rates less than 20% of Medicare and greater than 200%

• f Medicare

LABORATORY REBALANCING METHODOLOGY

 The Department analysis identified procedure codes by level

• f rate relative to Medicare:

 Most of the Department’s codes fall within the 80%-100% Medicare benchmark, with the largest range falling between 101%-199% of the Medicare rates

% of Medicare # of Procedure Codes 20% or less 23 21%-79% 246 80%-100% 599 101%-199% 409 200% or more 29

LABORATORY REBALANCING PROCEDURE CODE SET

 The Department identified 23 codes with rates less than 20% of Medicare  The Department identified 29 codes with rates greater than 200% of Medicare

80410 81216 81229 81251 81290 81330 81433 87506 81200 81220 81242 81252 81296 81376 81437 81203 81223 81243 81255 81298 81406 83605 81209 81226 81244 81266 81323 81420 87505 81007 81371 81536 82261 84375 P2031 81260 81407 82017 82379 85366 81295 81438 82131 83080 87582 81331 81507 82136 83987 89060

LABORATORY RATE REBALANCING METHODOLOGY

 The Department reset these rates to the Medicare rates effective January 1, 2018  As stated previously, PAMA establishes a phase in of payment reductions, the Department is not utilizing the phase in and all rates reflect the final rate regardless of total reduction to rate  More information on the Medicare Clinical Laboratory rate methodology and PAMA can be found at the following link: https://www.cms.gov/Medicare/Medicare-Fee-for-Service- Payment/ClinicalLabFeeSched/PAMA-Regulations.html

LABORATORY FEE SCHEDULE

 The Department will post a laboratory rebalancing fee schedule on June 1, 2019 on the Provider Rates & Fee Schedules page of the external website:

https://www.colorado.gov/hcpf/provider-rates-fee-schedule  Additional information on laboratory rebalancing can be found at the above link under State Plan Rates and Information  For additional information regarding laboratory rates please contact Trevor Abeyta at Trevor.Abeyta@state.co.us  For additional information regarding laboratory policy please contact Raine Henry at Raine.Henry@state.co.us