Medicare Clinical Diagnostic Laboratory Test Payment System – Final

From: Federal Register – CMS-1621-F; 6/23/16

Excerpt of CMS Fact Sheet

Section 216(a) of the Protecting Access to Medicare Act of 2014 (PAMA) added section 1834A to the Social Security Act (the Act), which requires revisions to the payment methodology for clinical diagnostic laboratory tests paid under the Clinical Laboratory Fee Schedule (CLFS). Under the final rule, reporting entities will be required to report private payor payment rates for laboratory tests and the corresponding volumes of tests. Private payor rates for laboratory tests from applicable laboratories will be the basis for the revised Medicare payment rates for most laboratory tests on the CLFS beginning in January 2018.


Medicare pays for clinical diagnostic laboratory tests (CDLTs) under the CLFS. The CLFS provides payment for approximately 1,300 CDLTs, and Medicare pays approximately $7 billion per year for these tests.

The CLFS was first adopted in 1984, and CLFS rates have only been updated since that time to establish payment for new tests or to make statutory, across-the-board updates.

Payment for a new test code on the CLFS established after 1984 is based on either: crosswalking, where an existing test with similar methodology and resources is used as a basis for the payment amount; or gapfilling, where Medicare Administrative Contractors are tasked with developing a payment amount for a test for which there is no existing test with a similar methodology.

In general, the payment amount for a test on the CLFS furnished on or after January 1, 2018, will be equal to the weighted median of private payor rates determined for the test, based on the data of applicable laboratories that is collected during a specified data collection period and reported to CMS during a specified data reporting period. A subset of tests on the CLFS — advanced diagnostic laboratory tests (ADLTs) — will have different data collection, reporting, and payment policies associated with them as required by the statute.

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