News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

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News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

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Medical laboratories have yet to learn how much to expect in payment for molecular pathology test claims submitted to the Medicare program

Concern is rising among pathologists and clinical laboratory directors about what the Medicare program will pay this year for the 104 new molecular test CPT codes. These new CPT codes became effective on January 1, 2013.

Few–if any–medical laboratories have received payments for Medicare claims submitted early in January. That’s because contractors for the federal Centers for Medicare & Medicaid Services (CMS) are just beginning to process those invoices. The first payments for these molecular test claims are expected within the next several weeks.

Help for Clinical Laboratories and Pathology Groups

To help clinical labs and pathology groups address this problem, CodeMap, LLC, a billing and coding consulting company in Schaumburg, IL, is encouraging clinical labs to post the payment amounts for the molecular test claims they get from the nation’s Medicare Administrative Contractors on the CodeMap website at CodeMap then will make this information available to participating medical laboratories and the public.

crowdsourcing graphic

To fill the knowledge vacuum that exists as different Medicare Administrative Contractors use the gap-fill method to develop reimbursement for the 104 new molecular test CPT codes, CodeMap, LLC, of Schaumburg, IL, is using the crowdsourcing solution. Also known as distributed problem solving, CodeMap is inviting clinical laboratories and pathology groups to voluntarily provide data about their payments for Medicare claims involving the new molecular test codes. (Graphic by

By allowing labs nationwide to fill in the gaps in knowledge in this fashion, CodeMap is crowdsourcing, also known as distributed problem solving. As medical laboratories voluntarily provide their data, CodeMap is able to collect and share the intelligence of the group.

Palmetto GBA and Cahaba Published Fees for New Molecular Test Codes

As of February 11, only two Medicare Administrative Contractors had published fee schedules for the 104 molecular pathology codes CMS approved late last year. Those two contractors are Palmetto GBA  (which serves Jurisdiction 1: California, Hawaii, and Nevada) and Cahaba GBA (which serves Jurisdiction J10: Alabama, Georgia and Tennessee).

The rates Palmetto published are inadequate to cover the costs of running some of the molecular diagnostic tests covered by the new molecular CPT Codes, experts said. (See “Low 2013 Molecular Rates May Bankrupt Some Labs,” The Dark Report, February 11, 2013). Many molecular labs are located in California, and experts fear that some of these labs may go out of business because of these low rates. The molecular test fee schedule from Cahaba has not generated as much criticism—partly because Cahaba serves labs in Alabama, Georgia, and Tennessee—where there are not as many molecular testing labs.

“For clinical labs outside of the two areas that Palmetto and Cahaba serve, the only way to know how much to expect in payment for these 104 molecular pathology tests is to submit a claim and wait for payment,” stated CodeMap CEO Charles B. Root, Ph.D..

Clinical Laboratories Lack Pricing Information

“This lack of pricing information is a problem for labs because, if they don’t know what CMS will pay in reimbursement for these molecular tests, then it’s impossible to know what labs can charge their referring physicians,” Root explained.

To address this problem, Root is encouraging clinical labs to post the amounts the various Medicare contractors pay for these 104 molecular tests on a section of the CodeMap site.

“As a convenience we encourage any labs to monitor payment amounts during the gap-fill process and use our interactive tool called the CodeMap MoPath Medicare Payment Website (,” Root said. “On this page, a clinical lab can disclose the amount paid for any new molecular pathology CPT code by any Medicare contractor.

“We have already entered the payment amounts for Cahaba and Palmetto,” he continued. “However, providers that submit claims to these payers may enter amounts they have received either for verification purposes, or if the received amounts differ from those published by Cahaba or Palmetto.”

Medicare Program Is Using Gap-Fill Process to Determine Prices

“The process of determining how to set reimbursement rates for labs is called gap-filling,” Root explained. “In this process, CMS recognized that each Medicare contractor may have different prices for the 104 molecular pathology CPT codes. Therefore, it asked the contractors to set payment amounts for all of the new codes and submit them to CMS by April 1, 2013,” he added. “Then, for each test, CMS will post the range of fees and the mean for each set of fees. CMS intends to post these fees and the mean for each set of fees by the end of April.”

For clinical laboratories and pathology groups running these molecular tests, they are left with the question as to what they should bill in the meantime,” Root said.  When determining an appropriate reimbursement amount, Medicare contractors will consider several factors, explained Root, including:

  • Charges for the test and any routine discounts,
  • The resources a lab uses to perform the test, and
  • What other payers have paid for the same test.

“In addition, the Medicare contractors would consider any charges, payment amounts, and resources required for comparable or similar tests,” he stated.

CMS To Set a National Limitation Amount for Each CPT Code

Once all contractors have determined specific reimbursement levels for each test, CMS will set a National Limitation Amount (NLA) for each CPT code at the median of the contractor-specific amounts, Root added. The median NLA will be effective on January 1, 2014, for all Medicare contractors.

Users of the CodeMap website will need to register by name and organization and enter a valid email address to satisfy CPT copyright requirements. “We will maintain all registration information as confidential and will not share it with any other persons or organizations, Root continued. “The website will not list any payment amounts as associated with any subscriber or registrant. In fact, the website will not display any user’s or registrant’s confidential information, name, organization, or email address,” he added.

Until the individual Medicare Administrative Contractors develop their prices for these 104 new molecular CPT codes, there is a serious knowledge vacuum about the level of reimbursement that clinical laboratories and pathology groups can expect to receive from the Medicare claims they submit for these molecular tests.

The crowdsourcing approach offers a way for individual labs, as they get payments from Medicare contracts, to use a third-party website to contribute real-time payment and pricing information.

In turn, that information is available to all labs. This example demonstrates how the Internet and information technology is compressing the time required to assemble data and generate useful business intelligence.

Root to Speak at Executive War College on Lab Management

Over the coming six to eight weeks, as different Medicare contractors issue payments for claims covered by these 104 new molecular CPT codes, it will be important for clinical labs and pathology groups to understand the big picture. Thus, on April 30-May 1, Charles Root, Ph.D., will address the upcoming Executive War College on Lab and Pathology Management.

Root will provide up-to-the-minute intelligence on the payment picture for the different Medicare contractors, as shared by labs that submit data to the CodeMap website. He will also address steps that clinical laboratories can take to ensure that payments are both speedy and accurate. Click here to view the full agenda  (or copy and paste this URL in your browser.)

—By Joseph Burns

Related Information:

Finding Success in the New Molecular Test Reimbursement Paradigm

CMS to Gap-Fill Molecular Pathology Procedure Codes on 2013 CLFS

2012 CLFS Update Addresses New Molecular Pathology Codes

The Dark Report laboratory intelligence

Pathology Changes, 2013 at the CPT® and RBRVS 2013 Annual Symposium November 14-16, 2012

Confirmed Speakers and Agenda for 18th annual Executive War College on Laboratory and Pathology Management, April 30-May 1, 2013, New Orleans, Louisiana