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Advanced Diagnostic Laboratory Tests (ADLTs)

Section 216(a) of the Protecting Medicare Act of 2014 established a new subcategory of clinical diagnostic laboratory tests known as Advanced Diagnostic Laboratory Tests (ADLTs) with separate reporting and payment requirements. New ADLTs will be paid at a rate equal to their actual list charge during a new ADLT initial period of three calendar quarters. After the initial period, the payment amount for a new ADLT is based on the weighted median of private payor rates from data collected by the laboratory during the new ADLT initial period. To be an ADLT under CMS regulations, the test must be covered under Medicare Part B, offered and furnished only by a “single laboratory,” and not sold for use by any other laboratory except that “single laboratory” or a “successor owner.” In addition, the test must meet either Criterion (A) (analysis of multiple biomarkers of DNA, RNA, or proteins) or Criterion (B) (cleared or approved by the U.S. Food and Drug Administration (FDA)).

Summary of the Process and Schedule for Requesting ADLT Status for a Laboratory Test

ADLT status determinations and HCPCS code assignments (if necessary) for laboratory tests will be conducted on a quarterly basis. CMS will accept applications for ADLT status under the Medicare CLFS at any time during the year. However, applications must be received during the first month of a calendar quarter for consideration during that quarter as indicated below.

For consideration during:

  • Calendar Quarter 1 (January 1 through March 31): Application for requesting ADLT status for a laboratory test must be received by CMS January 1 through January 31;
  • Calendar Quarter 2 (April 1 through June 30): Application for requesting ADLT status for a laboratory test must be received by CMS April 1 through April 30;
  • Calendar Quarter 3 (July 1 through September 30): Application for requesting ADLT status for a laboratory test must be received by CMS July 1 through July 31;
  • Calendar Quarter 4 (October 1 through December 31): Application for requesting ADLT status for a laboratory test must be received by CMS October 1 through October 31.

Applications for ADLT status received during the first month of a calendar quarter will be reviewed by CMS and the Medicare Advisory Panel on Clinical Diagnostic Laboratory Tests (the advisory panel) during the second month of that calendar quarter. The advisory panel will review each application and make recommendations to CMS. CMS will review the application and the advisory panel’s recommendations and make a determination on each application, as described below under “Possible Outcomes of CMS’ Review of ADLT Status Request” by the end of the second month of that calendar quarter. During the third month of that calendar quarter, CMS will notify the applicant via email of the outcome of its review. If the test is approved for ADLT status and is not currently assigned a unique HCPCS code, and is not the subject of a planned or pending AMA application for a level I HCPCS code, CMS will assign a unique level II HCPCS code to the test. A “unique” HCPCS code is one that describes only a single test.

As noted above, applications must be received by CMS during the first month of a calendar quarter to be considered during that quarter. Applications received during the second month or third month of a calendar quarter will be reviewed during the next calendar quarter. For example, if an application requesting ADLT status for a laboratory test is received by CMS on February 20 (second month of the first calendar quarter), the application would be reviewed by the advisory panel and CMS in May (second month of the second calendar quarter) and CMS would notify the contact person for the single laboratory via email of the outcome of its review in June (that is, the third month of the second calendar quarter).

The following table shows the quarterly ADLT application submission, review and approval schedule.

ADLT Request and Review Schedule:

 

 

 

Calendar Quarter

Request Period for ADLT Status

Review by the Advisory Panel and CMS

Notify Contact Person of Outcome of CMS Review

New ADLT Initial Period (If Approved for ADLT Status by end of Quarter)

1. January 1 - March 31

1/1 - 1/31

2/1 - 2/28

3/1 - 3/31

4/1 - 12/31

2. April 1 - June 30

4/1 - 4/30

5/1 - 5/30

6/1 - 6/30

7/1 - 3/31

3. July 1 - September 30

7/1 - 7/31

8/1 - 8/31

9/1 - 9/30

10/1 - 6/30

4. October 1 - December 31

10/1 - 10/31

11/1 - 11/30

12/1 - 12/31

1/1 - 9/30

If an ADLT status determination has not been made by the end of the requesting quarter, for example because of the need to review additional information from the applicant, the new ADLT initial period would begin on the first day of the first full calendar quarter following approval of ADLT status for the test. For instance, if an applicant requested ADLT status for a test in January and CMS requested additional information from the applicant in March, and because of the need to review additional information the test was not approved for ADLT status until mid-April, the new ADLT initial period would begin July 1. The contact person for the applicant would be notified via email of the tests ADLT status designation at the completion of CMS’ review.

The application for requesting ADLT status for a test and guidance for laboratories on ADLTs is accessible via the downloads section below.

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