Molecular Pathology Economics 101: An Overview of Molecular Diagnostics Coding, Coverage, and Reimbursement: A Report of the Association for Molecular Pathology

Abstract

Widespread indications for use of molecular diagnostics in various aspects of clinical medicine have driven proliferation of testing. The rapid adoption and continuous technological evolution of molecular diagnostics have often strained the development and maintenance of a functional underlying framework of coding, coverage, and reimbursement policies, thereby presenting challenges to various stakeholders, including molecular professionals, payers, and patients. A multidisciplinary working group convened by the Association for Molecular Pathology Economic Affairs Committee was tasked to describe the complex landscape of molecular pathology economics and highlight opportunities for member engagement. In this article, on the basis of review and synthesis of government regulations and procedures, published payer policy documents, peer-reviewed literature, and expert consensus, the Working Group navigates the ecosystem of molecular pathology economics in terms of stakeholders, coding systems and processes, coverage policy determination, and pricing mechanisms. The composition and interrelatedness of various working groups and committees are emphasized to highlight the functional underpinnings of the system. Molecular professionals must be conversant in the language and complex inner workings of molecular pathology economics to lead successful, viable laboratories and advocate effectively for policy development on their behalf. This overview is provided to be a resource to molecular professionals as they navigate the reimbursement landscape.

Figure 1

A/B Medicare administrative contractor (MAC) jurisdictions as of October 2017. From “Map of A/B MAC Jurisdictions as of June 2019,” by the Centers for Medicare & Medicaid Services (https://www.cms.gov/Medicare/Medicare-Contracting/Medicare-Administrative-Contractors/Downloads/AB-MAC-Jurisdiction-Map-Oct-2017.pdf, last accessed June 1, 2019). In the public domain. CGS, CGS Administrators, LLC; J5, Jurisdiction 5; J6, Jurisdiction 6; J8, Jurisdiction 8; J15, Jurisdiction 15; JE, Jurisdiction E; JF, Jurisdiction F; JH, Jurisdiction H; JJ, Jurisdiction J; JK, Jurisdiction K; JL, Jurisdiction L; JM, Jurisdiction M; JN-FCSO, Jurisdiction N–First Coast Service Options, Inc; NGS, National Government Services, Inc.; WPS, Wisconsin Physicians Service Government Health Administrators.

Figure 2

Various organizations impact the landscape of molecular pathology economics and interact in complex ways. Figure lists and describes the relationship between select key entities, including groups affecting Current Procedural Terminology (top left), Centers for Medicare & Medicaid Services (CMS) committees and working groups (top right), and private payers and associated groups (bottom right).

Figure 3

Coding life cycle. Codes are generated or revised through either the coding change application (CCA) process for submission of a new or revised Current Procedural Terminology (CPT) code (blue) or the proprietary laboratory analysis (PLA) application process for submissions of a new or revised CPT PLA code (green). The CPT Editorial Panel takes into account comments and recommendations from the Molecular Pathology Advisory Group and the Pathology Coding Caucus. Once a code is generated, subsequent and separate processes exist for both pricing and coverage of that code. AMA, American Medical Association; CMS, Centers for Medicare & Medicaid Services; LCD, local coverage determination; NCD, national coverage determination.

Figure 4

The process for pricing new Current Procedural Terminology (CPT) codes and repricing existing CPT codes under Protecting Access to Medicare Act (PAMA). New codes are discussed at the annual stakeholder meeting, the result of which is a recommendation by the Medicare Advisory Panel on Clinical Diagnostic Laboratory Tests (CDLTs) to Centers for Medicare & Medicaid Services (CMS) for utilizing the crosswalk or gap fill method to price a new code. Ultimately, CMS decides the pricing mechanism. Existing CPT codes were repriced in 2017 on the basis of the weighted median of private payer rates submitted by applicable laboratories. If adequate data from applicable laboratories are not provided, CMS reverts pricing back to gap fill or crosswalk. Every 3 years, CPT codes on the Clinical Laboratory Fee Schedule (CLFS) will be revalued to align with market data from applicable laboratories, as described above. MAC, Medicare administrative contractor; PLA, proprietary laboratory analysis.