CLFS History

CLFS History

Protecting Medicare and American Farmers from Sequester Cuts Act (2021)

The Protecting Medicare and American Farmers from Sequester Cuts Act (Section 610), passed on December 1, 2021, delayed the reporting requirement under Section 1834A of the Act and delayed the application of the 15% phase-in reduction.

Section 1834A of the Act, as established by Section 216(a) of the Protecting Access to Medicare Act (PAMA), required significant changes to how Medicare pays for clinical diagnostic laboratory tests (CDLTs) under the Medicare CLFS.

Fee Schedule Before 2018

Through December 31, 2017, we paid for outpatient clinical laboratory services based on a fee schedule, per Section 1833(h) of the Social Security Act. Payment was the lesser of the amount billed, the local fee for geographic area, or a national limit.

We set the national limits at a percent of the median of all local fee schedule amounts for each laboratory test code. Each year, we updated the fees for inflation based on the percentage change in the Consumer Price Index. Copayments and deductibles didn’t apply. Congress could pass legislation to modify the fees.

As of January 1, 2018, we use a new private payor rate-based CLFS payment system. The payment amount for most tests equals the weighted median of private payor rates. We update the rates under the CLFS every 3 years.

Medicare Clinical Diagnostic Laboratory Tests Payment System Final Rule (2016)

We published the CLFS final rule in the Federal Register on June 23, 2016. The CLFS final rule implemented Section 1834A of PAMA, which required extensive revisions to the Medicare payment, coding, and coverage for CDLTs.

Under the CLFS final rule, reporting entities must report certain private payor rate information for their component applicable laboratories. The data collection period was January 1–June 30, 2019.

Section 1834A(e) also requires we assign a unique HCPCS code for each advanced diagnostic laboratory test (ADLT) and each FDA-approved or cleared laboratory test (that’s not an ADLT). To request a unique level II HCPCS code, complete this form (PDF).

The Protecting Access to Medicare Act (PAMA) (2014)

PAMA, passed in 2014, required significant changes to how Medicare pays for CDLTs under the CLFS.

Social Security Acts

Federal Register Notices

Archived Documents

Page Last Modified:
09/06/2023 05:05 PM