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Lab Fees to Increase 20 Percent to Continue Funding CLIA

NEW YORK (360Dx) – The Centers for Medicare & Medicaid Services issued a notice that fees for labs certified under the Clinical Laboratory Improvement Amendments will increase by 20 percent.

In a Dec. 31, 2018 federal register notice, CMS said it is increasing lab fees for the first time in two decades so that it may continue to pay for the general expenses of administering the CLIA program. A 20 percent fee hike will bring in $62.1 million, CMS estimated, enough to meet its obligations for fiscal year 2018 and have the necessary carryover funds needed to maintain the program into 2022.

Stakeholders have until March 1 to provide feedback on its CLIA fee methodology.

CLIA certified labs are subject to several types of fees, certificate fees, compliances fees, and additional fees, all of which CMS is increasing based on historical revenue and expenditure data, according to the notice. Certificate fees fund the issuance of CLIA certificates signifying that labs have met federal lab regulations, and cover the costs of administering key elements of program, such as proficiency testing and accrediting bodies, while compliance fees ensure labs can remain certified by continuing to meet regulations. Additional fees support inspections of non-accredited laboratories, evaluations of labs that don't partake in approved proficiency testing programs, and reviews of accrediting organizations to assess if their inspection processes are equivalent to the CLIA process.

These fees vary based on the lab's classification. CMS estimated that the fee hike would impact approximately 251,000 CLIA-certified labs.

Across 11 classification categories, average compliance fees for labs needing an inspection currently range from $300 for low volume labs to $3,673, and a 20 percent hike would increase the range to between $360 and $4,408. Current average additional fees range from $15 to $184 across the categories, and with the fee increase, they would range from between $18 and $220.

Certificate fees across the 11 lab classification categories ranged from $150 (for low volume labs) to $7,940, and would increase to between $180 and $9,528. A certificate of waiver would increase from $150 to $180, while a certificate for a provider-performed microscopy procedures lab would go from $200 to $240.

Current fees are based on cost and workload assumptions CMS made in 1992. However, according to the agency, these costs have increased because labs are developing tests based on technologically complex platforms, it takes more time to perform surveys, and to a large degree, due to general inflation in the economy.  

"Over the past several years, we have observed that the total amount of incurred obligations in a given fiscal year has outpaced the corresponding amount of CLIA fees collected over the same timeframe, leading to decreases in the level of budgetary resources available to support program operations," CMS said in the Federal Register notice.

From fiscal year 2012 to 2017, CMS' costs for administering the CLIA program has exceeded the revenue collected via CLIA fees. In fiscal years 2016 and 2017, for example, CMS had a shortfall of $4.74 million and $9.34 million, respectively. CMS has been able to avoid fee hikes by controlling costs and using carryover funds from prior years to administer the program.

Despite these cost-controlling measures, the agency said it expects that expenditures cannot be further reduced without jeopardizing key aspects of the CLIA program, such as cutting back planned regulatory and enforcement actions. CMS estimates that by fiscal year 2020, there will not be enough carryover funds to cover a projected shortfall of $1.88 million for the CLIA program. "Based on these projections, absent a fee increase, our ability to maintain effective program operations may be jeopardized, potentially comprising public health and safety," CMS said in the notice.  

The agency noted that it issued a request for information last year to gather public feedback on increasing CLIA fees, and many stakeholders indicated their support, recognizing there hasn't been an increase since 1997. CMS noted that one commenter expressed concern over proposed CLIA fee increases since labs are being asked for more money while facing revenue reductions due to changes in the Clinical Lab Fee Schedule. "While we appreciate this commenter's concerns, we note that changes to the CLFS are issued by Medicare and are separate and distinct from changes to CLIA Fees," the agency said.

CMS recognized that a 20 percent increase to CLIA fees across all lab schedule codes "can be perceived as a major increase for laboratories," but noted that it intends this to be a one-time adjustment to address the $9.34 million gap between CMS program obligations and CLIA fee collections in fiscal year 2017, and to continue funding the program up to 2022. "We will continue to review our obligations and collections and may make future adjustments as needed to avoid shortfalls," the agency said.