Current Issues and Options: Coverage and Reimbursement for Complex Molecular Diagnostics. Key features of the IOM 2000 recommendations


Key features of the IOM 2000 recommendations

 Recommendation for Medicare (2000)Interval Events (2000-2008)
1Single national fee schedule, eliminating variant local Medicare lab schedules.No change.
2Set all payments at “NLA” (National Limitation Amount)No change.
3Alternate basis for the fee schedule (e.g. competitive biddingNo change, but a demonstration local competitive bidding system is in development. New codes, selectively, can be priced by methods not based on the legacy schedule (gap-fill). 
4Geographic adjustments (weights) to a single national fee schedule (variant on recommendation 1)No change. Would occur only after Recommendation 1.
5Open, timely process, with appeal.Substantially changed, as required by Medicare Modernization Act (2003, S. 942).  CMS established procedures by regulation for determining the basis for and the amount of payments for clinical laboratory tests with new or substantially revised codes “assigned after January 1, 2005.   CMS implemented a novel public meetings each summer and an appeal step.  The legacy process of “cross-walk” and “gap-fill” were unchanged, but are now defined by regulation (42 CFR 414.514).
6Process to periodically update the Clinical Laboratory Fee Schedule.No change.  The update remains depending on irregular legislative actions (e.g. update 2% in year X).
7Review alternatives to the coding system.No change at CMS.   However, since IOM 2000, the AMA CPT has implemented a temporary code system called Category III codes.
8Do not begin to impose a co-pay for laboratory tests.No change requested; the status quo was recommended. However, in the interim, the introduction of much more complex and costly tests (>$1000) changes the assumptions of the IOM committee (most legacy tests range from $5-$30). 
9CMS should discontinue use of ICD-9 codes to determine medical necessity.No change.  The recommended change would require regulatory change at 45 CFR 160, 162.   IOM 2000’s perceived fundamental flaws in using the ICD-9 system as a basis for medical necessity decisions.
10CMS should formulate laboratory policy after stakeholder input, increased communication with its own contractors.No specific change.  However, both annual rulemaking and ad hoc rulemaking allow considerable public comment to be reviewed.
11CMS should consolidate the number of contractors processing laboratory claims.Change via MMA, 2003.  The IOM request in 2000 seems to be concordant with the 1997 BBA (S. 4554(a) reduces laboratory test contractors to four regional contractors.)  This change did not occur.   The 2003 MMA reduces national Part A/B contractors to 15 or less by 2010, however.
12Collect data to manage the performance of the clinical laboratory payment system.   Trends in the existing program, or trends following change (such as competitive bidding) to be monitored for impact on access, responsiveness (e.g. of the coding system), value (quality/cost.) The MMA created a Council on Technology and Innovation at CMS to evaluate and reduce any problems caused by coding and reimbursement systems, which meets this end, but is not specific to clinical laboratory tests. Data collection & payor databases reviewed by AHRQ (2008), “Infrastructure to Monitor…Gene Based Applications.”