42 USC 1395m-1 - Improving policies for clinical diagnostic laboratory tests

U.S Code last checked for updates: May 02, 2026

§ 1395m–1.

Improving policies for clinical diagnostic laboratory tests

(a)

Reporting of private sector payment rates for establishment of medicare payment rates

(1)

In general

(A)

General reporting requirements

(B)

Revised reporting period

In the case of reporting with respect to clinical diagnostic laboratory tests that are not advanced diagnostic laboratory tests, the Secretary shall revise the reporting period under subparagraph (A) such that—

(i)

no reporting is required during the period beginning January 1, 2020, and ending April 30, 2026;

(ii)

reporting is required during the period beginning May 1, 2026, and ending July 31, 2026; and

(iii)

reporting is required every three years after the period described in clause (ii).

(2)

Definition of applicable laboratory

(3)

Applicable information defined

(A)

In general

In this section, subject to subparagraph (B), the term “applicable information” means, with respect to a laboratory test for a data collection period, the following:

(i)

The payment rate (as determined in accordance with paragraph (5)) that was paid by each private payor for the test during the period.

(ii)

The volume of such tests for each such payor for the period.

(B)

Exception for certain contractual arrangements

(4)

Data collection period defined

(A)

In general

(B)

Exception

(5)

Treatment of discounts

(6)

Ensuring complete reporting

(7)

Certification

(8)

Private payor defined

In this section, the term “private payor” means the following:

(A)

A health insurance issuer and a group health plan (as such terms are defined in section 300gg–91 of this title).

(B)

A Medicare Advantage plan under part C.

(C)

A medicaid managed care organization (as defined in section 1396b(m) of this title).

(9)

Civil money penalty

(A)

In general

(B)

Application

(10)

Confidentiality of information

Notwithstanding any other provision of law, information disclosed by a laboratory under this subsection is confidential and shall not be disclosed by the Secretary or a Medicare contractor in a form that discloses the identity of a specific payor or laboratory, or prices charged or payments made to any such laboratory, except—

(A)

as the Secretary determines to be necessary to carry out this section;

(B)

to permit the Comptroller General to review the information provided;

(C)

to permit the Director of the Congressional Budget Office to review the information provided; and

(D)

to permit the Medicare Payment Advisory Commission to review the information provided.

(11)

Protection from public disclosure

(12)

Regulations

(b)

Payment for clinical diagnostic laboratory tests

(1)

Use of private payor rate information to determine medicare payment rates

(A)

In general

(B)

Application of payment amounts to hospital laboratories

(2)

Calculation of weighted median

(3)

Phase-in of reductions from private payor rate implementation

(A)

In general

(B)

Applicable percent defined

In this paragraph, the term “applicable percent” means—

(i)

for each of 2017 through 2020, 10 percent;

(ii)

for each of 2021 through 2026, 0 percent; and

(iii)

for each of 2027 through 2029, 15 percent.

(C)

No application to new tests

This paragraph shall not apply to payment amounts determined under this section for either of the following.

(i)

A new test under subsection (c).

(ii)

A new advanced diagnostic test 1

 So in original. Probably should be preceded by “laboratory”.

(as defined in subsection (d)(5)) under subsection (d).

(4)

Application of market rates

(A)

In general

(B)

Other adjustments not applicable

(5)

Sample collection fee

(c)

Payment for new tests that are not advanced diagnostic laboratory tests

(1)

Payment during initial period

(A)

using cross-walking (as described in section 414.508(a) of title 42, Code of Federal Regulations, or any successor regulation) to the most appropriate existing test under the fee schedule under this section during that period; or

(B)

if no existing test is comparable to the new test, according to the gapfilling process described in paragraph (2).

(2)

Gapfilling process described

The gapfilling process described in this paragraph shall take into account the following sources of information to determine gapfill amounts, if available:

(A)

Charges for the test and routine discounts to charges.

(B)

Resources required to perform the test.

(C)

Payment amounts determined by other payors.

(D)

Charges, payment amounts, and resources required for other tests that may be comparable or otherwise relevant.

(E)

Other criteria the Secretary determines appropriate.

(3)

Additional consideration

(4)

Explanation of payment rates

(d)

Payment for new advanced diagnostic laboratory tests

(1)

Payment during initial period

(A)

In general

(B)

Actual list charge

(2)

Special rule for timing of initial reporting

(3)

Application of market rates after initial period

(4)

Recoupment if actual list charge exceeds market rate

(5)

Advanced diagnostic laboratory test defined

In this subsection, the term “advanced diagnostic laboratory test” means a clinical diagnostic laboratory test covered under this part that is offered and furnished only by a single laboratory and not sold for use by a laboratory other than the original developing laboratory (or a successor owner) and meets one of the following criteria:

(A)

The test is an analysis of multiple biomarkers of DNA, RNA, or proteins combined with a unique algorithm to yield a single patient-specific result.

(B)

The test is cleared or approved by the Food and Drug Administration.

(C)

The test meets other similar criteria established by the Secretary.

(e)

Coding

(1)

Temporary codes for certain new tests

(A)

In general

(B)

Duration

(i)

In general

(ii)

Exception

(2)

Existing tests

Not later than January 1, 2016, for each existing advanced diagnostic laboratory test (as so defined) and each existing clinical diagnostic laboratory test that is cleared or approved by the Food and Drug Administration for which payment is made under this part as of April 1, 2014, if such test has not already been assigned a unique HCPCS code, the Secretary shall—

(A)

assign a unique HCPCS code for the test; and

(B)

publicly report the payment rate for the test.

(3)

Establishment of unique identifier for certain tests

(f)

Input from clinicians and technical experts

(1)

In general

The Secretary shall consult with an expert outside advisory panel, established by the Secretary not later than July 1, 2015, composed of an appropriate selection of individuals with expertise, which may include molecular pathologists, researchers, and individuals with expertise in laboratory science or health economics, in issues related to clinical diagnostic laboratory tests, which may include the development, validation, performance, and application of such tests, to provide—

(A)

input on—

(i)

the establishment of payment rates under this section for new clinical diagnostic laboratory tests, including whether to use crosswalking or gapfilling processes to determine payment for a specific new test; and

(ii)

the factors used in determining coverage and payment processes for new clinical diagnostic laboratory tests; and

(B)

recommendations to the Secretary under this section.

(2)

Compliance with chapter 10 of title 5

(3)

Continuation of annual meeting

(g)

Coverage

(1)

Issuance of coverage policies

(A)

In general

(B)

No effect on national coverage determination process

(C)

Effective date

(2)

Designation of one or more medicare administrative contractors for clinical diagnostic laboratory tests

(h)

Implementation

(1)

Implementation

(2)

Administration

(3)

Funding

(i)

Transitional rule

(Aug. 14, 1935, ch. 531, title XVIII, § 1834A, as added Pub. L. 113–93, title II, § 216(a), Apr. 1, 2014, 128 Stat. 1053; amended Pub. L. 116–94, div. N, title I, § 105(a), Dec. 20, 2019, 133 Stat. 3100; Pub. L. 116–136, div. A, title III, § 3718, Mar. 27, 2020, 134 Stat. 425; Pub. L. 117–71, § 4, Dec. 10, 2021, 135 Stat. 1507; Pub. L. 117–286, § 4(a)(251), Dec. 27, 2022, 136 Stat. 4333; Pub. L. 117–328, div. FF, title IV, § 4114, Dec. 29, 2022, 136 Stat. 5901; Pub. L. 118–22, div. B, title II, § 502, Nov. 17, 2023, 137 Stat. 123; Pub. L. 118–83, div. B, title II, § 221, Sept. 26, 2024, 138 Stat. 1538; Pub. L. 119–37, div. F, title II, § 6209, Nov. 12, 2025, 139 Stat. 633; Pub. L. 119–75, div. J, title II, § 6226(a)–(c), Feb. 3, 2026, 140 Stat. 684.)

cite as: 42 USC 1395m-1