Clinical Diagnostic Laboratory Tests

Medicare generally pays for Clinical Diagnostic Laboratory Tests (CDLTs) under the Clinical Laboratory Fee Schedule (CLFS). For any CDLT for which a new or substantially revised HCPCS code has been assigned on or after January 1, 2005, CMS determines the amount of payment for the test based on one of two methodologies - crosswalking or gapfilling (see 42 CFR §414.507 through §414.509).

Crosswalking occurs when a new test or substantially revised test is determined to be comparable to an existing test on the CLFS, multiple existing test codes, or a portion of an existing test code. CMS assigns the payment amount of the comparable test(s), which is established under the weighted median methodology prescribed in §414.507, to the new or substantially revised test.

The alternate payment methodology is to gapfill a test. Gapfilling is used when there is no comparable existing test available. In this case, the Medicare Administrative Contractors (MACs) develop a local payment amount for the new test code in the first year, and in the second year, CMS calculates the payment rate at the median of the local MAC amounts.

The Protecting Access to Medicare Act of 2014 (PAMA) required the establishment of a Federal Advisory Committee Act (FACA) panel to advise CMS on pricing new CDLTs and other issues. New CDLTs are reviewed at a CLFS Annual Public Meeting for laboratory tests each summer where the Advisory Panel on CDLTs provides its recommendations to CMS. Following recommendations made by the Advisory Panel on CDLTs at the public meeting, CMS announces proposed determinations with respect to the basis for establishing a payment amount for each code (crosswalking or gapfilling), followed by a 30-day comment period. Final determinations are typically released by mid-November. Once final determinations are made, those payment amounts go into effect for the next calendar year. Within 60 days following the release of the final determinations, the public may request reconsideration of a final determination and such requests are presented at the next CLFS Annual Public Meeting.

For more information about the annual payment determination process for new CDLTs, refer to CLFS Annual Public Meeting.

Payment for existing CDLTs is described under §1834A of the Act. Generally, certain laboratories are required to report data to CMS about private payor pricing. With some exceptions, the payment for an existing CDLT is equal to the weighted median of private payor rates and volume reported for the test.

Section 1834A of the Act also established a new subcategory of CDLTs known as Advanced Diagnostic Laboratory Tests (ADLTs) with separate reporting and payment requirements. To be an ADLT, CMS regulations require that 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 FDA). See 42 C.F.R. § 414.502. New ADLTs, which are ADLTs for which payment has not been made under the CLFS prior to January 2018, will be paid at a rate equal to their actual list charge during a new ADLT initial period of three calendar quarters. For guidance, information about how to apply for ADLT status, and a list of approved ADLTs, refer to the ADLT section of the PAMA Regulations CMS webpage.

Beneficiaries generally do not have cost-sharing for CDLTs paid under the CLFS. CDLTs or services given in the hospital outpatient setting are generally packaged under OPPS, though there are limited instances where laboratory services can be billed separately.

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Page Last Modified:
09/06/2023 04:51 PM