Thursday, August 10, 2017

The Quirky World of Clinical Chemistry Panel Pricing

CMS has quirky rules for pricing clinical chemistry test panels, and ACLA and NILA have challenged the agency that these rules are over-ridden by new law under PAMA (here).  For an overview of the panel policy system, here.   This blog is a deep dive into the inside workings of the special code and pricing levels themselves.

Tests Never Overpay the Panel Price Cap
The result of the rules is that CMS never pays more for components of a panel than it would pay for the whole panel.  For example, if a panel has 8 components, they might be priced at $10 each, but the whole panel is priced at just $15.   And, you only do 7 of the panel tests, they won't be paid 7x$10=$70 - rather, they won't be paid more than $15 which is the panel price cap.

Complicated Rules
The way CMS gets to this result is actually more complex and involves the creation of 18 phantom automatic test panel codes and prices, which exist down at the bottom of the CLFS fee schedule, but are never used on claims.   These codes, called ATP codes, set the price for all the individual tests that are found on clinical chemistry panels, and the prices have nothing to do with the fee schedules prices of the single components (which might be between $5 and $15 or higher for which analyte). For an overview of the ATP and panel system, here.

For example, a panel of 5 tests is priced at ATP05 for $10.73.   If there were an AMA CPT panel of six tests and only 5 of the tests were medically necessary, it would be the same as a panel of 5 tests: ATP05 $10.73.   If AMA made up a new clinical chemistry panel tomorrow, and it had 5 tests, it would price at ATP05 $10.73.

Here are the rules as I understand them:

1.  Pay only for medically necessary tests.  If a panel has 10 tests which individually add up to $100, and all ten are medically necessary, pay the ATP10 at $11.91.   If only 7 tests are medically necessary, CMS has a predetermined price waiting for you, ATP07 at $11.21.

2.  Never double pay for the same test.  A doctor orders Panel with 10 tests and another Panel B with 5 tests, but CMS knows that 3 of the analytes overlap.  CMS will pay the phantom price ATP12 or $12.39 (10 tests + 5 tests - 3 overlapping tests = 12 tests).

3.  Because codes are crosswalked to ATP prices, rather than single test prices, parts of a panel can never be higher than the whole panel. 

Quirky Fee Schedule for ATP's
The actual ATP prices are somewhat quirky.  [Screen shot at bottom.]  For example, ATP09 and APT10 are the same price, $11.91.  Some ATPs are for multiple tests - ATP16 is for anywhere from 13-16 tests at one price: $14.49.   THere is no ATP13, 14, or 15, only ATP16.  There is a code for ATP22, 22+ tests, and a code for ATP23, 23+ tests, which are the same price, $16.64.

What's the Price Increment for One More Test?
The delta from level to level in the ATP codes is variable.  [Screen shot at bottom.] Rising from 5 to 6 tests (ATP05 to ATP06) raises you from $10.73 to $10.76, or plus three cents.   But from 6 to 7 tests rises from $10.76 to $11.21, or plus 45 cents.  Generally, each new test adds between 20 and 50 cents, but not always.  Remember, that as individual analytes, the additional test might have been coded and priced at $10 or more.

MAC Variation
There are some variation among MACs.  For example, Washington State pays exactly $8.76 from ATP03 up to ATP12, regardless of level, whereas the national price ramps up from $9.12 to $12.39 over the same range.   Washington State catches up and pays the national limit for ATP22 and ATP23.
Adjacent state Idaho seems to have only one price discrepant from the national rate (ATP02 at $4.33), while nearby Oregon rates are the same except as national price except at three upper payment levels (ATP20, 21, 22).

NLA and "Midpoint"
The fee schedule has no "floor" for ATP prices, and the national limit or NLA is usually the price.  However, the fee schedule continues to have a column called the "national mid point" price which runs about $5 higher than the NLA.  This column does nothing today, but it's apparently a ghostly relic of a time when some carriers had substantially higher prices than the current NLA.

Excel spreadsheet in the cloud here.

Screen shot below (click to enlarge).

I have three blogs on this topic.
Overview of Chemistry Panel Policy (July 26), here.
    Even Nerdier Deep Diving into Panel Pricing and ATP Codes (August 10), here.
NILA and ACLA Statements re PAMA and Panel Pricing (August 10), here.

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