On September 30, 2013, the Centers for Medicare and Medicaid Services (CMS) released the long-awaited “final” regional gap-fill reimbursement rates and the 2014 National Limitation Amounts (NLA) for several of the Tier 1 Molecular Pathology (MoPath) CPT codes on the Medicare Clinical Laboratory Fee Schedule (CLFS). These payment rates will generally become effective on January 1, 2014 for many genetic and other molecular tests previously paid by Medicare under a “stacking code” methodology. Once effective, the payment rates are essentially permanent because CLFS prices are not adjusted annually. Stakeholders who disagree with these payment rates have until October 30, 2013 to request reconsideration by CMS.

As expected under the gap-fill regulations (42 C.F.R. §§414.500 - 414.510), the “final” rates generally reflect the median value of the interim reimbursement rates developed by the various regional Medicare Administrative Contractors (MACs) last spring. Because several of the MACs copied the rates released by Palmetto GBA (Palmetto), the “final” prices generally reflect the Palmetto interim rates. The Palmetto rates are generally perceived as low, and in some cases, below costs, by many clinical laboratories, pathologists and other stakeholders, and thus pose a threat to this emerging segment of the diagnostic clinical laboratory market. Both large and small laboratories have complained to CMS and to Congress over the course of the summer about the inadequacy of the interim rates.

The “final” gap-fill rates are now posted on CMS’ website for those Tier 1 (gene-specific) codes which Medicare may pay for (certain codes reflect pre-natal or other tests that are not commonly performed on the Medicare population), but the inclusion of a code and/or payment amount in the gap-fill rates on the CLFS does not ensure that a particular test will be covered by Medicare. No rates were provided at this time for Tier 2 MoPath CPT codes, which generally represent medically useful procedures that are performed in lower volumes than Tier 1 tests (e.g., tests for rare diseases).

CMS’ publication of the “final” gap-fill rates sets in motion the final phase of the lengthy gap-fill process. Absent significant objections from stakeholders in the next 30 days, these rates will become the basis for payment for MoPath tests for the foreseeable future.