According to new data from the Centers for Medicare and Medicaid Services (CMS), in 2018, Medicare reimbursement for 75% of clinical labs will be cut by approximately $670 million, not the original estimated figure of $390 million. This is due to the CMS’ efforts to ensure that labs are paid the same amount by the CMS for tests as by private payers.

Based on the current system, each lab has the freedom to determine its own rates based on market data, and according to CMS, this process has been largely unchanged since 1984. However, last year a rule on reimbursement strategy change was finalized and is scheduled to go into effect in January 2018. This change is expected to slash reimbursement costs, disrupting lab services and patient access, especially for Medicare beneficiaries. The cut may negatively impact the outbreak detection of infection diseases as well.

Stakeholders are also concerned that the CMS’ data is inaccurate, with the HHS Office of Inspector General estimating that 12,000 labs potentially meet the definition of applicable labs affected by the cut, but only 2,000 labs reported data. Other labs, such as physician office–based labs, are in the dark as to whether they qualify for the decrease in reimbursements, as they have yet to receive word from the CMS.

The CMS plans to publish the finalized rates in November. Public comments are due October 23.

Source: Modern Healthcare