Automated multichannel chemistry (AMCC) tests are a subset of diagnostic tests that are focused on overall well-being. Testing analytes like glucose, cholesterol, potassium, trigylcerides and others is part of almost every doctor's visit. The 23 tests that are generally identified as AMCC tests are relatively simple in nature using basic testing methods and the simple nature of these tests is reflected in the amounts that Medicare pays for these tests. The average Medicare Clinical Laboratory Fee Schedule (CLFS) payment rates for these tests is just over $6.50 per test. Despite the low per-test payment rate, AMCCs are big business, accounting for $194 million in Medicare spending in 2018. Read on for more...
There has been alot said about Medicare payment for AMCC tests since the Protecting Access to Medicare Act (PAMA) reformed the CLFS. Part of the way PAMA was implemented required Medicare to set payment rates and make payments for individual tests as described by their billing code. Before 2014, Medicare paid for AMCC test codes using a complicated and opaque algorithm that converted claims for individual tests into a payment rate based on the number of tests provided during a single encounter. For instance, in January 2014, a lab who performed eight AMCC tests for a patient at the same time, would be paid a grand total of $11.54. This rate reflected the economies of scale that the lab surely experienced because they were performing all eight tests at the same time, likely on the same platform and using a single workstream.
It did not matter to CMS that the total of the payment rates for all eight tests, when counted individually, greatly exceeded the $11.54 fee schedule rate. And it didn't matter that that difference could be multiple times the individual fees. Let's take for example a totally fictitious eight test panel including the following: Glucose, LDH, Phosphorous, Potassium, Protein, Sodium, Triglycerides and Urea Nitrogen. Based on January 2014 payment rates, the lab should submit a claim for a total of $51.11 (using nationally payment limits -- in 2014 each state had slightly different payment rates). Yet, through the magic of the Medicare AMCC policy, that lab would only be paid $11.54, about a 75% discount.
But when Congress enacted the PAMA legislation, they effectively took away CMS's ability to discount the payment rate for these test "panels." By requiring CMS to set payment rates using the billing and payment codes for the test CMS could no longer convert the individual test codes into CMS's own "Automated Testing Panel" codes. This is why the Department of Health and Human Services' Office of Inspector General found that, in 2018, Medicare paid $82 million more for these tests than they had paid previously. In 2018, the individual payment rates for the chemistry test codes range from $4.63 to $16.88. These rates may change over time, since lab payment rates now adjust on a once-every-three-years basis. Compare that range to the ATP payment range in 2014 of $7.10 for two tests to $16.55 for all 23.
Did Congress intend for CMS to pay so much more for these relatively simple lab tests. Likely not. This is the poster child for an "unintended consequence" of a policy that, according to the Congressional Budget Office and CMS's own Actuary, is working -- at least it's saving money. In fact, CMS might say it's working better than they expected. When CMS first released the regulation implementing the changes, they estimated that the changes would save $390 million in just one year. In fact they saved $670 million -- nearly 40 percent more than they expected. And that counts the added payments for AMCC test codes.
Regardless of the overall amount of payment reductions, the OIG is still pressuring CMS to make more cuts. In their latest report (available here: https://oig.hhs.gov/oei/reports/OEI-09-19-00100.pdf) the OIG claims that CMS could have saved another $82 million by either: 1) reinstating the AMCC bundling policy; 2) ignoring the statutory phase-in period and immediately paying the median of commercial payer rates for the test codes; or 3) creating their own bundled billing and payment codes for the tests.
For right now, it seems that CMS is holding pat on their implementation of the statute and don't seem to be bowing to the OIG. That's not to say that things won't change and that we may see some additional changes to try to recapture some of that $82 million, but the changes suggested by OIG will take -- quite literally, an act of Congress.
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