Payer Roundup—Grassley calls on HHS, CMS to explain inflated lab spending

Senate Finance Committee Chairman Chuck Grassley, R-Iowa, is calling for the Department of Health and Human Services to explain the potential for a big increase in costs to Medicare for laboratory services. Grassley's letter follows a recent report from the Government Accountability Office which found that changes made by the Centers for Medicare & Medicaid Services (CMS) to establish a national fee schedule for laboratory services may have resulted in hundreds of millions of dollars in increased payments because it used a maximum payment rate as a baseline instead of an average payment. The report also found that Medicare changed the way it processed some laboratory tests and often paid an individual rate for panel tests instead of a lower, bundled rate, which could cost more than $10 billion.