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PROGRAM MEMORANDUM
INTERMEDIARIES/CARRIERS
Department of Health
and Human Services

Health Care Financing
Administration


Transmittal No. AB-99-99 Date DECEMBER 1999

Change Request 1081

SUBJECT: Cervical or Vaginal Smear Tests (Pap Smears) Included in Calendar Year (CY) 2000 Clinical Diagnostic Laboratory Fee Schedule

This program memorandum (PM) provides instructions for implementing 224 of the Balanced Budget Refinement Act (BBRA) (Public Law 106-113) which was enacted November 29, 1999. Specifically, 224 of the BBRA (Increase in Reimbursement for Pap Smears) revises 1833(h) of the Social Security Act (the Act) to modify reimbursement for Pap Smears paid under the CY 2000 clinical diagnostic laboratory fee schedule.

Section 1833(h) directs that the Medicare Part B payment for conventional Pap smears is determined by a fee schedule established on a local (regional, statewide, or carrier service area) basis not to exceed a national limit of 74 percent of the median of all the local fee schedules established. This statute, in addition to other limiting factors, results in a national limit amount of $7.15 for CY 2000.

Congress has now established a national minimum payment amount for diagnostic or screening Pap smear laboratory tests (including all cervical cancer screening technologies that have been approved by the Food and Drug Administration as a primary screening method for detection of cervical cancer) of not less than $14.60 for dates of service in the year 2000. This PM supplements PM AB-99-84, dated November 1999, in order to implement the provision effective January 1, 2000. If the pricing amount for the following codes is less than $14.60 for CY 2000, it must be increased to $14.60. Standard Systems must be modified to assure payment of at least $14.60 for dates of service 1/1/2000 and later. Do not search for previously adjudicated claims, however, timely filed claims may be reprocessed if brought to your attention.

In addition, 1833(a)(1)(D) of the Act provides that payment will be the least of the local fee schedule, the National Limitation Amount, or the actual charge billed for the test. Therefore, the payment shall not exceed the actual charge where it is less than $14.60. Attachments B and C from PM AB-99-84 (November 1999) continue to apply to the following gap-fill codes: 88142, 88143, 88144, 88145, 88147, 88148, G0123, G0143, G0144, G0145, G0147, and G0148. Report the gap-fill amounts by May 5, 2000 to the RO. The gap-fill amount reported to the RO can be any amount (i.e. less than $14.60). The actual payment must be either the lesser of: actual charges, the gap-filled amount if it is higher than $14.60 or $14.60 if the gap-filled amount is less than $14.60 (Please see examples on table 1 of page 2). In subsequent years, HCFA will update the national minimum payment amount in accordance with the statute and compute the pricing for Pap smear codes. The affected HCFA Common Procedure Coding System (HCPCS) codes on the clinical diagnostic laboratory fee schedule are G0123, G0143, G0144, G0145, G0147, G0148, P3000, 88142, 88143, 88144, 88145, 88147, 88148, 88150, 88152, 88153, 88154, 88164, 88165, 88166, and 88167.

NOTE: Public Law 106-113 also included 223 that states: "The Secretary of Health and Human Services may not use, or permit fiscal intermediaries or carriers to use, the inherent reasonableness authority provided under section 1842(b)(8) of the Act until after the Comptroller General of the United States releases a report pursuant to the request for such a report made on March 1, 1999, regarding the impact of the Secretary's, fiscal intermediaries', and carriers' use of such authority." Therefore, HCFA has suspended its activities related to the inherent reasonableness authority for the examination of the payment amounts for Pap smears.

HCFA-Pub. 60AB

Table 1

  Charge Gap-filled amount 1833(h) amount Payment
Example 1 $10.00 $13.00 $14.60 $10.00
Example 2 $20.00 $15.00 $14.60 $15.00
Example 3 $17.00 $13.00 $14.60 $14.60

The effective date for this PM is January 1, 2000.

The implementation date for this PM is January 17, 2000.

These instructions should be implemented within your current operating budget.

For questions regarding this document, contact Brett James on 410-786-9358.

This PM may be discarded after December 31, 2000.

Source: Health Care Financing Administration

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