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​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Clinical Laboratory Services Rate Methodology

March 2024 Update:

The Department of Health Care Services (DHCS) has calculated the Clinical Laboratory rates, effective July 1, 2023 in compliance with California Welfare and Institutions Code section 14105.22.

On November 8, 2023, the Centers for Medicare & Medicaid Services (CMS) approved SPA 23-0019. The procedure codes with rates adjusted in accordance with SPA 23-0019 are listed below. The new rates are effective retroactively to July 1, 2023.

Procedure Code Code Description  July 1, 2023 Rate
80307
DRUG TEST PRSMV CHEM ANLYZR             $43.50
86480TB TEST CELL IMMUN MEASURE              $43.39
87529HSV DNA AMP PROBE                       $24.56
80074ACUTE HEPATITIS PANEL                   $34.86
87522HEPATITIS C REVRS TRNSCRPJ              $31.51
87591N.GONORRHOEAE DNA AMP PROB              $25.36
87491CHYLMD TRACH DNA AMP PROBE              $25.59
82306VITAMIN D 25 HYDROXY                    $20.72
84154ASSAY OF PSA FREE                       $12.87
88313SPECIAL STAINS GROUP 2                  $34.26
86147CARDIOLIPIN ANTIBODY EA IG              $17.82
86800THYROGLOBULIN ANTIBODY, RIA             $11.14
83525ASSAY OF INSULIN                        $8.00
86317IMMUNOASSAY INFECTIOUS AGENT            $10.49
84481FREE ASSAY (FT-3)                       $11.93
86255FLUORESCENT ANTIBODY SCREEN             $8.63
87086URINE CULTURE/COLONY COUNT              $5.65
87324CLOSTRIDIUM AG IA                       $8.39
84436ASSAY OF TOTAL THYROXINE                $5.18
87177OVA AND PARASITES SMEARS                $7.18
86592SYPHILIS TEST NON-TREP QUAL             $3.18
87045FECES CULTURE AEROBIC BACT              $7.85
87077CULTURE AEROBIC IDENTIFY                $6.65
87147CULTURE TYPE IMMUNOLOGIC                $3.63
86141C-REACTIVE PROTEIN HS                   $11.06
80053*00 COMPREHENSIVE METABOLIC PANEL       $9.19
87186MICROBE SUSCEPTIBLE MIC                 $7.51

​February 2022 Update:

​​​Calendar Year 2021 Clinical Laboratory or Laboratory Services Data Collection

​As the first step in developing the July 1, 2023 lab reimbursement​ rates, certain providers are required to submit third-party payer rate and utilization data for calendar year 2021. Data submissions must be submitted to the Department of Health Care Services (DHCS) by June 30, 2022. The lists provided below identify the procedure codes subject to reporting and the providers by National Provider Identifier (NPI) number that are required to submit data:

Please see DHCS Form 6015 below for instructions and submission form:
Please submit completed submission forms, questions, or comments, to the DHCS Clinical Laboratory mailbox: labcomments@dhcs.ca.gov​​

​Background

In accordance with Assembly Bill (AB) 1494 (Committee on Budget), the DHCS is required to:
  • Develop a new rate setting methodology for clinical laboratory or laboratory services based on the average of the lowest prices other third-party payers are paying for similar services.
    • Effective July 1, 2015, the new rate methodology is implemented under approved SPA 15-015. 
  • Implement a 10 percent payment reduction, excluding services under the Family Planning, Access, Care and Treatment (FPACT) program and outpatient hospital services, effective July 1, 2012 through June 30, 2015, for clinical laboratory and laboratory services until a new rate setting methodology is approved by the Centers for Medicaid & Medicare Services (CMS).
    • The 10 percent payment reduction is implemented under approved SPA 12-028. 
As required by statute, the AB 97 payment reduction is also applied to the new payment methodology.

Data Collection Process

​DHCS underwent a significant stakeholder process to develop the data collection tool to be used for the development of the new methodology and to determine the new rates under that methodology.   

Beginning in 2012, DHCS conducted meetings with clinical laboratory stakeholders to develop a data collection methodology that was operationally feasible and consistent with the intent of the legislation.

DHCS requested third-party payer rate and utilization data from providers and limited the use of data to codes that met either of the following two thresholds based on the prior year's Medi-Cal paid claims data:
  • Medi-Cal paid claims volume equal to or greater than 1,000
  • Total Medi-Cal paid amount equal to or greater than $500,000  
 The thresholds for choosing providers required to submit utilization data are:
  • Medi-Cal paid claims volume equal to or greater than 5,000
  • Total Medi-Cal paid amount equal to or greater than $100,000 

Rate Methodology

Reimbursement for clinical laboratory or laboratory services shall not exceed the lowest of the following:

  1. The amount billed,
  2. The charge to the general public
  3. The rate in effect on the Medi-Cal fee schedule for the current state fiscal year, which shall be the lowest of the following:
    1. ​The rate in effect on the Medi-Cal fee schedule as of June 30 of the previous state fiscal year; or
    2. 100 percent of the lowest maximum allowance established by the federal Medicare Clinical Laboratory fee schedule and Medicare Physician fee schedule effective January 1 of the previous state fiscal year for the same or similar service.

4.    Beginning on July 1, 2023, and every three years thereafter, the weighted average of the lowest amount that third-party payers are paying for the same or similar services, but no less than 70 percent of the Medicare Clinical Laboratory rate and Medicare Physician rate effective January 1 of the previous state fiscal year for the same or similar service.

Triennially, DHCS utilizes the data collected to develop the clinical laboratory reimbursement rates. The following represents the steps taken in the determination of the average of the lowest rate.  

  1. DHCS calculates the weighted average of the lowest amount that other payers are paying for same or similar clinical laboratory or laboratory services based on the data collected from providers.
  2. In order to address the possibility of outliers in the third-party payer data, for codes with weighted average market rates more than 30% lower than the current Medicare rate, DHCS implemented a backstop to set the rate at no less than 70% of Medicare.
  3. The methodology is individually applied to each code meeting threshold requirements, excluding codes for which no third-party rate and/or utilization data was submitted, or if the services under that code were terminated or no longer a Medi-Cal benefit.

To ensure that requirements of the provisions of statute continue to be met, DHCS will collect third-party payer rate and utilization data every three years, beginning in 2019, from clinical laboratory or laboratory services providers. Beginning on July 1, 2020, and every years thereafter, rates are required to be calculated based on the prior year’s data and application of the methodology will be limited to those codes meeting either of the two thresholds. DHCS will continue to monitor the thresholds and methodology and make changes as necessary to comply with the law, access requirements, and account for other operational or programmatic issues.

Contact DHCS

Questions or comments can be submitted to the DHCS Clinical Laboratory email box: labcomments@dhcs.ca.gov.  

Legislation

Last modified date: 6/4/2024 3:15 PM