Confusion, unhappiness, and many unresolved issues remain about the way government and private payers are handling claims for molecular diagnostic tests covered by the 114 new CPT codes
Dust is settling from the fiasco triggered by the Medicare program’s failure to be ready on January 1, 2013, to settle molecular diagnostic test claims filed under the 114 new Tier 1 and Tier 2 molecular CPT codes. The damage is not just limited to Medicare test claims, but also involves private health plans that were waiting to let the Medicare program set precedents on coverage and prices for the new molecular test codes.
Many Clinical Laboratories Must Cope With an Unsatisfactory Situation
Although federal Medicare officials and Medicare contractors have scrambled to rectify the situation, even today there is much unhappiness across the clinical laboratory industry about the current state of things. That unhappiness extends to state Medicaid and private payers because many of these payers have been slow to publish coverage guidelines and prices for these new molecular test CPT codes.
• non-payment for some CPT codes;
• inadequate payment for other CPT codes; and,
• non-coverage decisions involving selected CPT codes by some Medicare contractors.
Not every laboratory is equally affected by the current situation. A national lab company offering a full range of tests covered by these CPT codes is dealing with a very different set of issues compared to a private laboratory company that offers a single proprietary molecular assay or genetic test that falls under one of the molecular test codes.
At many medical laboratory companies, the financial and clinical disruptions have been significant. Dark Daily’s sister publication, The Dark Report, has published details about lab companies that have closed, due all or in part to the non-payment of their molecular lab test claims during the first four months of 2013.
One notable closure involved Predictive Biosciences, Inc., formerly located in Lexington, Massachusetts. Its genetic test for diagnosing bladder cancer was used by about 900 urologists. After January 1, it ceased getting payment for its three different proprietary molecular assays.
In May, Predictive Biosciences learned that its Medicare contractor had ruled that its bladder cancer test would not be covered. Upon hearing that news, Predictive Biosciences’ investors decided to shut down the lab. It closed its doors on May 31, 2013. (See The Dark Report, “Medicare Contractor’s Ruling on MolDx Test Causes Lab to Close.” July 8, 2013.)
Clinical Labs Waiting Since January 1 for Molecular Test Payment
These are just some of the troubling reports coming into Dark Daily. As most readers know, this problem came about because government and private payers were not prepared to reimburse claims for molecular tests covered by the 114 new molecular test CPT codes on January 1, 2013.
Nearly eight months later, many issues have yet to be fully settled for all the types of molecular tests and genetic assays that labs are coding with these 114 CPT codes. Further there are some clinical lab companies that tell Dark Daily they still await decisions (and payments) from many private health insurers, some Medicaid programs, and certain Medicare Administrative Contractors (MACs).
It was in the first weeks of June that individual clinical lab organizations and medical lab billing companies began telling Dark Daily and our sister publication, The Dark Report that payments for molecular claims had begun to flow from the Medicare contractors.
But non-payment is not the only issue. Labs face two other problems related to this issue. First, billing experts say that Medicare contractors have decided that some of the 114 new molecular test codes introduced this year are not medically necessary. That determination means that those contractors will not pay for these tests. Second, the contractors are setting rates for many of these new CPT codes that are from 40% to as much as 60% lower than they paid last year under the previous code-stacking arrangement.
Both issues are major financial setbacks to the clinical lab organizations performing these tests. As of the end of May, most Medicare contractors had posted prices for more than 70 of the new molecular CPT codes, but none had priced all 114 tests. On that date, one contractor had priced only 22 tests.
Medical Necessity Determinations for New Molecular Test CPT Codes
Deciding that some molecular diagnostic assays and genetic tests are not medically necessary is particularly disconcerting to the clinical laboratory industry because such decisions could set back the movement toward personalized medicine. It could result in patients not getting tests that physicians believe are in their patients’ best interests.