ASCP Calls on CMS to Withdraw New Payment Rate System

Nov 21, 2017
Despite Changes, ASCP Maintains New Payment System is Fundamentally Flawed and Should Be Withdrawn

The Centers for Medicare & Medicaid Services (CMS) has released its final Clinical Laboratory Fee Schedule (CLFS) for CY 2018 and while the Agency made several changes to address several serious problems with its new Medicare payment system, ASCP is still fundamentally opposed its implementation. ASCP is concerned that the Agency ignored its statutory obligations, creating a flawed payment system that could impose serious financial challenges for clinical laboratories and access issues for patients. While some tests are slated to receive cuts for next year exceeding 10 percent, most laboratory tests would be cut 10 percent—generally the maximum cut allowed by law.

ASCP’s primary concern with the Agency’s plans is that it ignored Congress’s explicit instructions that it develop new payment rates that are reflective of the “true market” for laboratory services—not a subset of the Medicare market for laboratory services. By excluding hospitals, clinics, nursing homes, most physician office laboratories and other important segments of the laboratory market, CMS cherry-picked the market to secure data almost entirely from those laboratories with the greatest economies of scale. 

In its comments on the proposed rates, ASCP noted that hospital and physician office labs account for more than 60 percent of the market for laboratory services while independent clinical labs account for less than 30 percent of the market.  CMS relies on data from just 1 percent of U.S. laboratories—more than 90 percent of which are independent clinical labs.

ASCP believes that CMS’ plans to implement the new fee schedule puts patient care at risk, is unwise and clearly disregards its statutory obligations. ASCP calls on the Agency to withdraw these flawed rates until it can revise these rates using representative data from all market segments for laboratory services. 

ASCP has steadfastly opposed CMS’ efforts to create a skewed payment rate system.  Last month, besides submitting comments raising concerns about CMS’s proposed fee rates, ASCP also joined with 21 other groups in a letter calling on CMS Administrator Seema Verma to immediately address the flaws with CMS’ plan.  ASCP plans to submit formal comments opposing implementation of these new rates very soon.  Moreover, ASCP urges all members of the laboratory community to contact their elected officials in Congress to urge them to intervene.  You can use the following ASCP Action Alert to do so.