Tuesday, October 6, 2015

How CMS defines MACs and Carriers for CLFS Policymaking

In a recent blog, I suggested that CMS rules should lead it to use "MACs" (Novitas, Noridian, etc) to calculate gapfill pricing medians, rather than using "states."   The relevant regulation is 42 CFR 414.508).   I stated in the simplest reading, the regulation leads to the unit of analysis as "carriers" not "states."  I also stated that "carriers are MACs."   CMS states similarly, in October 1, 2015 PAMA rulemaking.  At 80 Fed Reg 59410, CMS writes,

[W]e use
gapfilling when no comparable existing
test is available. We instruct each MAC
to determine a contractor-specific
amount for use in the first year the new
code is effective.

(We note that we are
proposing to replace ‘‘carrier’’ with
contractor to reflect that Medicare has
replaced fiscal intermediaries and
carriers with MACs.)

...contractors are required to establish
contractor-specific amounts on or before
March 31. Contractors may revise their
payment amounts, if necessary, on or
before September 1, based on additional
information. After the first year, the
contractor-specific amounts are used to
calculate the NLA, which is the median
of the contractor-specific amounts,


The unit of function is "each MAC" which, where the text refers to MAC as singular, established "an amount," singular.  So unless, for example, CMS thinks New England has five or six MACs, it is instructing the New England "MAC" to set "a[n] amount."   To me the simplest reading is that each MAC (such as Palmetto, FCSO, etc) is a rate setting entity, so that there are about ten of them, not 57.  CMS does not routinely and ordinarily refer to having 57 MACs today, although there are 57 CLFS zones.

When the Gapfill regulation was originally promulgated, on December 1, 2006 (here), CMS discussed the process in the preamble (page 69703).  CMS states, "manual instructions are
provided to each Medicare carrier to determine a payment amount for its geographic area(s) for use in the first year, and the carrier-specific amounts are used to establish an NLA for following years."   Adding, "[T]here is also a specific time frame to perform this revision so that we have adequate
time to receive and use the carrier specific amounts for the calculation of the next year’s clinical laboratory fee schedule...we proposed to pay for a new gapfilled laboratory test under our existing methodology for the first year (the carrier would establish a gapfill amount.) Beginning in the second year, the test would be paid at the national limitation amount. This would result in consistent payment in geographic areas for a new test using the median of the carriers’ gapfilled amounts."  There is no specific definition of "median of the carriers" and the most natural definition would be an understanding of "carriers" as contractors or MACs, not as states or subsections of states under the old CLFS zones.

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