Company: VCYT
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001384101-25-000014
Chunk: 64

Company: VERACYTE, INC.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1A
Chunk 64
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 1% from April 1, 2022 through June 30, 2022) . Reductions resulting from the congressional sequester are applied to total claims payment made by providers to Medicare; however, they do not currently result in a rebasing of the negotiated or established Medicare or Medicaid reimbursement rates. 

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Furthermore, state legislation on reimbursement applies to Medicaid reimbursement and managed Medicaid reimbursement rates within that state. Some states have passed or proposed legislation that would revise the reimbursement methodology for clinical laboratory payment rates under those Medicaid programs. For example, California’s Department of Health Care Services has continuously updated its methodology for clinical laboratories and laboratory services, most recently in 2023.

We cannot predict whether future healthcare initiatives will be implemented at the federal or state level, particularly in light of the incoming U.S. presidential administration or in countries outside of the United States in which we do or may do business, or the effect any future legislation or regulation will have on us. The taxes imposed by the new federal legislation, cost reduction measures and the expansion in the role of the U.S. government in the healthcare industry may result in decreased revenue, lower reimbursement by payers for our tests or reduced medical procedure volumes, all of which may adversely affect our business, financial condition and results of operations. In addition, sales of our tests outside the United States subject our business to foreign regulatory requirements and cost-reduction measures, which may also change over time.

Ongoing calls for deficit reduction at the federal government level and reforms to programs such as the Medicare program to pay for such reductions may affect the pharmaceutical, medical device and clinical laboratory industries. Currently, clinical laboratory services are excluded from the Medicare Part B co-insurance and co-payment as preventative services. Any requirement for clinical laboratories to collect co-payments from patients may increase our costs and reduce the amount ultimately collected.

Additionally, CMS bundles payments for many clinical laboratory diagnostic tests together with other services performed during hospital outpatient visits under the Hospital Outpatient Prospective Payment System. CMS currently maintains an exemption for molecular pathology tests and “Criterion A” ADLTs from this bundling provision. It is possible that this exemption could be removed by CMS in future rule making, which might result in lower reimbursement for tests performed in this setting.

PAMA includes a substantial payment system for clinical laboratory tests under the CLFS. Under PAMA, laboratories that receive the majority of their Medicare revenue from payments made under the CLFS and the Physician Fee Schedule  report on a triennial basis (or annually for ADLTs), private