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Medicare Expected to Slash Reimbursement for Laboratory Tests

The “Protecting Access to Medicare Act of 2014” was signed into law on April 1, 2014. This new law could have draconian financial effects on clinical laboratories. Beginning on January 1, 2016, most clinical laboratories must report to the Centers for Medicare and Medicaid Services their test volumes and the price paid for each lab test by private payers. On January 1, 2017, CMS will begin to use this data to establish prices for the Clinical Laboratory Fee Schedule (CLFS). The new law prevents Medicare from decreasing the price of any single test by more than 10% per year during 2017, 2018, and 2019 and by more than 15% per year during 2020, 2021, and 2022. Medicare is expected to start with the 20 lab tests that represent 56% of CLFS payments. Altogether, CMS reimbursement for the targeted lab tests could be slashed as much as 75% by 2022. 

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