Coverage and Reimbursement

AMP, through the Economic Affairs Committee (EAC), addresses short and long-term issues associated with coding, coverage, and reimbursement for molecular pathology through the following actitivies:

• Monitoring and responding to newly released molecular National Coverage Decisions (NCDs) and Local Coverage Decisions (LCDs);

• Advising on AMP’s position regarding Current Procedural Terminology (CPT) code proposals at the Pathology Coding Caucus;

• Providing recommendations and input to CMS during their Annual Pricing Exercise;

• Advocating with CMS regarding actions taken by Medicare Administrative Contractors (MACs);

• Collaborating with the College of American Pathologists (CAP) on coding, coverage, and reimbursement advocacy issues, including submitting joint letters;

• Advocating for reasonable reimbursement for the professional work involved in interpreting a molecular diagnostic test result and preparing a personalized report;

• And providing education on the topic of coding, coverage, and reimbursement for molecular pathology to AMP members and other interested stakeholders.

You can read more about AMP's recent activites below.

Background: The world of coding, coverage, and reimbursement for molecular pathology is incredibly complex and loaded with jargon and acronyms. In 2020, the AMP EAC published an overview of molecular pathology economics in the hopes that it can serve as an educational resource for residents, molecular pathologists, and clinical molecular geneticists, as well as laboratory directors and hospital/laboratory administrators who seek to understand the complex landscape of molecular pathology economics.

Manuscript can be viewed here.

Presentation by the authors can be viewed here.

Learn More About AMP's Activities:

Coding: The Language of Laboratory Economics

Background on Coding:

There are a number of different coding systems involved with laboratory medicine, including:

Notes about CPT Codes: HIPAA (1996) mandated the use of specific code sets for diagnoses and procedures to be used in all transactions, including CPT. Having a CPT code indicates maturity and vetting of the test. If no CPT code exists, assay is billed using a "not otherwise specified" or NOS code, which may result in difficulty getting paid. However, a CPT code does not guarantee that a test will be paid for...or that the reimbursement will be appropriate!

Subsets of CPT codes related to molecular pathology:

• Molecular Pathology
  • Tier 1: Analyte/gene specific codes
  • Tier 2: Grouped by level of complexity
    • Includes 81479 - Unlisted molecular pathology procedure
• Genomic Sequencing Procedures or GSPs
• Multianalyte Assays with Algorithmic Analyses or MAAAs
• Microbiology
  • Includes molecular microbiology identification codes

How are new codes created?

How is AMP involved?

The AMP EAC New Codes and Pricing Subcommittee:

• Assists in development of AMA CPT Code Change Applications (CCA) on behalf of AMP EAC;
• Consults with PCC representative and technical representative on CPT CCAs; 
• Advocates for optimal coding structure for molecular diagnostics.

Reimbursement: How Are Tests Priced?

Pricing Process

Each year in July, CMS holds a public meeting for the laboratory payment for new clinical test codes. Stakeholders present in person or submit written comments with rationale for payment recommendations. CMS then determins the basis of payments for codes: crosswalk or gapfill.

A new or revised code is "crosswalked" when the payment rate is determined by comparison to a similar existing code.

A new or revised code is "gapfilled" when no similar code exists and each Medicare Administrative Contractor (MAC) independently establishes a payment amount and submits those values to CMS. MACs are to use the following information in their rate setting process: the charges for the test and routine discounts to charges, the cost of resources to perform the test, payment amounts determined by other payers, and charges, payment amounts, and resources required for other tests that may be comparable or otherwise relevant. During the gapfill process, laboratories need to educate MACs and commercial payers about the cost and value of new procedures. 

The final Clinical Lab Fee Schedule (CLFS), with the payment determinations for each code, is then posted in late fall. 

PAMA

How is AMP involved?

The AMP EAC New Codes and Pricing Subcommittee:

• Develops strategy and recommendations for yearly pricing of new codes on the CLFS;
• Develops strategy for gapfill pricing of codes;
• Advocates for and effects proper pricing of molecular diagnostics, including GSPs.

The AMP EAC is also heavily involved in monitoring and advocating for positive PAMA reform. 

Coverage: Will Insurance Cover A Test?

Background

Coverage is the determination whether and in what cases to pay for a service.

In the US, there are a number of different payers for molecular pathology services. The governmental (public) payer is CMS, which includes Medicare (Part A, B, C, and D) and the State Medicaid programs. The commercial (private) payers include numerous private health insurers that offer plans with various coverage options (including employer group plans) and large corporations/business that self-insure.

Coverage and payment policies may differ between public and private payers, depending on type of molecular testing, for example:

• Germ-line testing occurs more often in non-Medicare population (pediatric/pregnant patients)
• Somatic testing is more common in the Medicare population, although not limited to this group

Private payers can choose to follow Medicare coverage rulings, although many perform independent determinations for each medical procedure (CPT). Medicare coverage is limited to items and services that are reasonable and necessary for the diagnosis or treatment of an illness or injury. 

Medicare coverage is determined through two processes:

• National Coverage Determinations (NCD), which establish a national coverage policy for a service and
• Local Coverage Determinations (LCD), where in the absence of an NCD, a service may be covered locally, at the discretion of Medicare Administrative Contractors (MACs).

A MAC is a private health care insurer that has been awarded a geographic jurisdiction by CMS to process Medicare Part A and Part B (A/B) medical claims or Durable Medical Equipment (DME) claims for Medicare Fee-For-Service (FFS) beneficiaries. MACs cover 12 geographic jurisdictions, as seen in the map below. MACs serve as the primary operational contact between the Medicare FFS program and the healthcare providers enrolled in the program. MACs are informed by Carrier Advisory Committees (CAC) – one per state.

A/B Medicare administrative contractor (MAC) jurisdictions as of October 2017. From “Map of A/B MAC Jurisdictions as of June 2019,” by the Centers for Medicare & Medicaid Services, last accessed June 1, 2019. In the public domain. CGS, CGS Administrators, LLC; J5, Jurisdiction 5; J6, Jurisdiction 6; J8, Jurisdiction 8; J15, Jurisdiction 15; JE, Jurisdiction E; JF, Jurisdiction F; JH, Jurisdiction H; JJ, Jurisdiction J; JK, Jurisdiction K; JL, Jurisdiction L; JM, Jurisdiction M; JN-FCSO, Jurisdiction N–First Coast Service Options, Inc; NGS, National Government Services, Inc.; WPS, Wisconsin Physicians Service Government Health Administrators.

In 2011, one of the MACs, Palmetto, developed a very pro-active approach to Molecular Testing in the MolDx program:

• Uses test registry and evaluation processes outside the standard CMS processes;
• Administered in 28 states;
• Default non-coverage of all Molecular Diagnostic Procedures by “Statutory Exclusion”;
• Requires application for unique identifier;
• Requires a Technical Assessment (TA) to determine coverage status for most new tests.

AMP Activity on Local Coverage Determinations (LCDs)

The AMP EAC Coverage Subcommittee monitors and responds to LCDs for molecular pathology with help from AMP member subject matter experts. AMP's LCD comments are frequently done in collaboration with the College of American Pathologists (CAP).

AMP's most recent comments on LCDs are below. You can also view all of AMP's comments on LCDs here. 

AMP Activity on National Coverage Determinations (NCDs)

AMP Activity on Private Payer and Laboratory Benefit Manager Policies

Commercial, third party payers vary in their level of sophistication dealing with Molecular Pathology tests. Commercial payers still use CPT codes and can be more lenient with their coverage and reimbursement policies.

Private payers are also dealing with the monumental task of determining appropriate coverage and reimbursement for molecular tests. AMP has provided expert feedback to Blue Cross Blue Shield Evidence Street and other private payer policies. 

Concerns regarding molecular diagnostic tests helped to spur the rise of Laboratory Benefit Managers, or LBMs. LBMs are used by commercial, third party payers as an outsourced option for medical and coverage policy development, technical assessments, claims editing, and network services. Use of LBMs has resulted in a rapidly growing trend toward the requirement for prior authorization for payment of molecular lab services. In general, LBMs have presented substantial challenges to the lab community who do not have direct access to the patient at the time of test ordering. 

AMP encourages our members to submit concerning private coverage policies to policy@amp.org for the EAC Coverage Subcommittee to review for potential comment. 

If you are interested in engaging with AMP on the topic of coding, coverage, and reimbursement, we invite you to join us at the AMP 2022 Molecular Pathology Economics Summit. Click on the advertisement below to learn more about the event and receive  information as it becomes available.