Final Payment Decisions in Toxicology Codes

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PAMA advisory panel vote backs NILA’s proposed revisions to CMS pricing for definitive drug tests.

A little over a year ago (July 2015), the Centers for Medicare and Medicaid Services (CMS) proposed dramatic changes in Medicare’s coding and pricing for drugs-of-abuse (DOA) testing, including:

– Deleting all current drug testing G codes.Toxicology Codes
– Not recognizing new AMA CPT codes, published in 2014, for DOA testing.
– Creating a single G code for presumptive testing (screening).
– Creating a single G code for definitive testing (identifying the specific drug and quantity of that drug).

After considering comments from a variety of laboratories and laboratory associations, CMS modified its original recommendations and proposed to create:

3 G codes for presumptive testing
– Only 1 code to be billed per day

4 G codes for definitive testing
– Only 1 code to be billed per day.
– The unit used to determine the appropriate G code is “drug class.”
– Each “drug class” to be used only once per day in determining the appropriate G code.

CMS listed 37 “drug classes” for definitive testing and decided to use a tiered system because of concerns about overpaying when laboratories bill for each individual test. CMS believed a single code that pays the same amount regardless of the number of drugs being tested would reduce overpayments.

Most drug testing laboratories were willing to accept a tiered system if the pricing for each tier was reasonable. However, that turned out not to be the case. Most laboratories recommended that CMS allow billing for the first seven tests individually, with the CPT code 82452 as the “crosswalk” (the amount to be reimbursed per test, which would be approximately $24.60 for each billed CPT code 82452).

The PAMA Advisory Panel recommended seven differing crosswalk formulas, varying from two-to-five times 82542. CMS set the payment at 3.25 times 82542. So, if CPT code 82542 paid $24.60, then G0480 would pay 3.25 times $24.60-or $79.95.

This would be reasonable if the average number of tests in Tier 1 is 3.25 per each G0480 code billed. However, by defining the unit to be billed as a “drug class” instead of an individual drug, the number of tests to be performed can be much higher than the number of “drug classes” in each of CMS’s four tiers for definitive drug testing.

There are hundreds of medications and/or illicit substances that are tested under each of the 37 drug classes. Apparently, CMS based its pricing decision on the incorrect belief that definitive drug testing using LC/MS-MS produces results for multiple medications and/or illicit substances with one analyte or aliquot. Depending on the referring provider’s order, however, toxicology laboratories will prepare and run multiple analytes or aliquots for medications and/or illicit drugs within one drug class, frequently requiring several separate runs on the testing instrument given that different drugs or drug groups require different analytic reagents and instrument set ups due to variances in the chemical structure of particular drug classes. As a specimen is tested for a higher number of drugs, per a physician’s order, additional specimen preparation is likely to be necessary, and additional runs on the LC/MS-MS instrument are required.

The following illustrates an example of the number of drugs that can often be tested under each of the drug classes and number of analytes and aliquots prepared for the purpose of performing the testing under Tier 1 (G0480):

G0480 – Up to 7 drug classes

Drug Class Medications and Illicit Drugs Number of Analytes/Aliquots
Amphetamine Phentermine 3
Barbiturates Butalbital, Phenobarbital 2
Synthetic Stimulants 20
Cannabinoids, synthetic JWH-018 4,5-Hydroxypentyl 6
JWH-019 5,6-Hydroxyhexyl
JWH-122 4,5-Hydroxypentyl
JWH-210 4,5-Hydroxypentyl
JWH-250 4,5-Hydroxypentyl
JWH-073 3,4-Hydroxybutyl
Cocaine Cocaine, Benzoylecgonine 2
Oxicodone Oxicodone, Noroxycodone 2
Fentanyl Fentanyl, Norfentanyl 2

NILA concluded that the CMS pricing for Tiers 1-4 (G0480-G0483) in CY 2016 underestimated the time, work, expertise and expense to perform definitive drug testing because the payment unit was established as a “drug class” without understanding the operations of toxicology testing and the number of tests that are often needed for review within a given drug class.

Therefore, NILA (and other laboratorians) requested CMS, at its July 18, 2016, public meeting on Medicare pricing and coding, reconsider the payment rates for codes G0480-G0483. Originally, CMS agreed to reconsider pricing only for Tiers 2-4 (G0481-G0483), but not Tier 1 (G0480). NILA appealed that decision and CMS agreed to reconsider pricing for code G0480 as well. NILA considered this essential because code G0480 is frequently billed. NILA urged other laboratory interests to unite behind one pricing proposal-which they did, a major accomplishment for a sector of the industry that is rarely united on such issues.

Following is a summary of CMS’s pricing for CY 2016 and NILA’s proposal for CY 2017:

G Codes for Toxicology Tests

Code Number of Tests Per Tier CMS’s Pricing for CY 2016 NILA’s Proposal for CY 2017
G0480 Up to 7 $79.95 [3.25 x 82540] $147.60 [6 x 82540]
G0481 8-14 $123.00 [5.00 x 82540] $196.80 [8 x 82540]
G0482 15-21 $166.05 [6.75 x 82540] $246.00 [10 x 82540]
G0483 22+ $215.25 [8.75 x 82540] $295.20 [12 x 82540]

*based on pricing for 82540 = $24.60

The PAMA Advisory Panel discussed the pricing of definitive drug tests issue in detail on July 18, 2016, and voted overwhelmingly to recommend re-pricing the G0480-G0483 codes as proposed by NILA (and others).

CMS is now considering the PAMA Advisory Committee’s recommendations and will, in September, announce a decision whether to re-price the G0480-G0483 codes-and, if so, by how much. We understand that CMS is still attempting to understand the costs involved in providing testing under the specific drug classes in order to justify an adjustment in the rates. After CMS releases its proposed decision, a 60-day comment period will follow. CMS is expected to finalize its decision in November 2016.

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About Author

Mark S. Birenbaum

Mark S. Birenbaum, PhD, is the administrator of both the National Independent Laboratory Association (NILA) and the American Association of Bioanalysts (AAB).

Julie Scott Allen

Julie Scott Allen represents the interests of community and regional clinical laboratories through the National Independent Laboratory Association (NILA), serving as their Washington representative and advocating before Congress and regulatory agencies.

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