Brief Blog: The Short and Obscure Life of the CMS Date-of-Service Demo

In 2007, Medicare introduced a date of service rule for laboratory tests that locked the date of service to the date of specimen collection.  If the date fell within a hospital inpatient stay, the service was unbillable separately due to DRG bundling, even if performed after the patient left hospital (because the "date of service" remained back during the hospital stay.)   Outpatient lab tests shipped to reference, or sole-source labs, could only be billed by the hospital, since the patient was "at the hospital" on the day of service when the tissue was taken or the blood was drawn.

The Affordable Care Act included Section 3113, a demonstration program for up to two years and up to $100M of lab tests, under which reference labs could direct-bill CMS for advanced lab tests.  Because the project blocked tests using "unlisted codes," tests like Oncotype DX could not use the demo, since they did not yet have CPT codes.   CPT assigned the eligible CPT codes primarily as the historic molecular "stack codes," which were deleted by CMS and CPT in mid-demo.

Nonetheless, consistent with Congressional intent, CMS released a report on the demo project.  The report has a cover date of 2015 and a PDF edit date of January 6, 2016.  The report concludes that due to "extremely low utilization" no conclusions on impacts of the demo project could be made.

CMS noted that during the period, 1,476,590 beneficiaries were billed with molecular stack codes, and 458 beneficiaries were billed with molecular stack codes under the Demonstration Project.  CMS states that patients for whom claims were submitted under the demonstration program died at a "much higher" rate than non-demonstration patients.

Only 173 of the 458 beneficiaries with "tests billed" had "tests paid."  Total payments under the $100M demo were $35,000 for independent laboratory claims and $5,500 for hospital outpatient claims.

The report is online here.