Medicare Payments for Clinical Laboratory Tests in 2014:  Baseline Data (OEI‐09‐15‐00210) 1

Medicare	Payments	for	Clinical	Laboratory	Tests	

in	2014:		Baseline	Data	

The Protecting Access to Medicare Act (PAMA) of 2014

requires reform of the payment system for clinical laboratory

(lab) tests—the first such reform in 3 decades.1  The current

payment rates, which are based on lab charges from 1984

and 1985, will be replaced with recent rates paid by private

payers.  PAMA calls for the Centers for Medicare & Medicaid

Services (CMS) to begin collecting private‐payer rate data

from labs in 2016 and to begin paying new, potentially lower

rates for lab tests in 2017.  The Congressional Budget Office

estimates that the new payment system will save the

Government $2.5 billion over 10 years.2

   

To provide oversight, PAMA mandated that the Office of

Inspector General (OIG) monitor Medicare payments for lab

tests and the implementation of the new payment system.3

Specifically, PAMA requires OIG to publicly release an annual

analysis of the top 25 lab tests based on Medicare payments

and to conduct analyses that OIG determines appropriate

regarding the implementation and effect of the new payment

system.   

This data brief 

 Presents initial, baseline analyses of the top 25 lab

tests in 2014, based on Medicare payments.

 Introduces key statistics and metrics that OIG will use

for ongoing monitoring of Medicare’s implementation

of the new payment system.

 Is the first in a series of congressionally mandated OIG

products on Medicare lab test payments.  The series

builds on previous OIG work on Medicare’s payments

for lab tests.4

     

HHS OIG Data Brief • September 2015 • OEI-09-15-00210 

In 2014, Medicare Part B 

paid $7.0 billion for 

451 million lab tests 

For the top 25 lab tests 

in 2014, based on 

Medicare payments: 

Medicare Part B 

payments totaled 

$4.2 billion 

Independent labs 

accounted for the 

majority of Medicare 

Part B payments 

A small portion of labs 

accounted for the 

majority of Medicare 

Part B payments 

The tests fell into seven 

categories, 

predominantly the 

chemistry category 

Molecular pathology 

tests cost the most per 

test 

AT A GLANCE 
Medicare Payments for Clinical Laboratory Tests in 2014:  Baseline Data (OEI‐09‐15‐00210) 2

BACKGROUND 

Lab Test Payment Rates: 1984–2016 

The system that Medicare currently uses to determine

payment rates for lab tests has remained largely

unchanged since 1984.  Each Medicare claims processing

contractor established its own fee schedule of payment

rates for lab tests based on local lab charges to Medicare

in 1984 and 1985.5

  This created a total of 57 fee

schedules, collectively known as the Clinical Laboratory

Fee Schedule.  The payment rates on the Clinical

Laboratory Fee Schedule are adjusted annually to

account for inflation.  However, the base rates have not

been updated since 1984 to reflect changes in test

methods that affect test costs.

To contain costs, Medicare also established a national

limitation amount that caps payment rates for each test.  

In each jurisdiction, Medicare pays the lower of lab

charges, the jurisdiction’s payment rate, or 74 percent of

the median rate for each lab test across the 57 fee

schedules.  This last rate is known as the national

limitation amount.6

    

Lab Test Payment Rates: 2017 and After 

Beginning in 2017, Medicare will update the Clinical

Laboratory Fee Schedule using data on rates paid by

private payers.7

  For each lab test, Medicare will use the

median of private payer rates, weighted by the payers’

test volume, to set a new payment rate.  The payment

rates will apply nationally.  Medicare will update

payment rates for lab tests every 3 years using data

reported by labs.8

  Figure 1 compares the current and

future payment systems for lab tests.

Current Future 

Year Implemented 1984 2017 

Basis of Payment Rates 

Lab charges in 1984–1985, 

adjusted annually to account for 

inflation 

Private payer rate data, updated 

every 3 years using then-current 

data 

Number of Fee Schedules 57 regional fee schedules Single national fee schedule 

What are they? 

Lab tests are performed on 

specimens taken from the human 

body. The tests provide 

information integral to 

preventing, diagnosing, and 

treating disease. 

Where are they performed? 

Lab tests are usually performed 

in independent labs, hospitals, 

and physicians’ offices. 

How do lab tests differ? 

There are different categories of 

lab tests. For example, 

chemistry tests measure levels of 

specific substances, whereas 

molecular pathology tests 

analyze genetic material to 

detect variants in genes. 

What does Medicare cover? 

Medicare Part B covers most lab 

tests ordered by physicians and 

pays 100 percent of allowable 

charges. Beneficiaries do not 

have a copay, under the current 

or new payment system.

Lab Tests 

Figure 1. Comparison of Medicare Payment Systems for Lab Tests 
Medicare Payments for Clinical Laboratory Tests in 2014:  Baseline Data (OEI‐09‐15‐00210) 3

RESULTS 

It is common for Medicare beneficiaries to

receive lab tests.  As shown in Figure 2, just

over half of Medicare beneficiaries (27 million)

received at least one lab test in 2014.9

  On

average, these beneficiaries each received

17 tests, and 1 percent of beneficiaries each

received 95 or more tests.  Lab tests accounted

for about 3 percent of total Medicare Part B

payments in 2014.10, 11

Tens of thousands of labs received payment from Medicare for performing tests in 2014.  Medicare

paid 63,730 different labs an average of $109,898 each.  The top three labs, by volume, performed a

combined 69 million tests in 2014.  For these tests, they received more than $250 million each—

almost $1 billion combined—from Medicare Part B.  Each of the 3 labs performs tests at multiple

locations—1 lab performs tests at more than 100 locations—which may account for their high

volume.  In contrast, half of all labs received less than $1,019 each.

In 2014, Medicare Part B paid for 451 million tests using 1,146 procedure codes from Medicare’s

Clinical Laboratory Fee Schedule.12  These procedure codes include many categories of lab tests,

from common chemistry tests (such as a thyroid‐stimulating hormone test) to less frequently used

but more complex molecular pathology tests (such as a gene analysis test).  In addition to including

codes for lab tests, the Clinical Laboratory Fee Schedule includes two procedure codes for

venipuncture (drawing blood from a patient).  In 2014, Medicare paid a total of $239 million for

80 million venipuncture services.

Figure 2. Use of Lab Tests Covered by Medicare Part B in 2014 

In	2014,	Medicare	paid	

$7.0	billion	for	lab	tests	that,	

beginning	in	2017,	will	be	

subject	to	the	new	payment	

system	 Beneficiaries

• 27 million 

beneficiaries 

received a lab test

• 17 lab tests per 

beneficiary, on 

average

Labs

s

• 63,730 labs 

received Medicare 

payments

• $109,898 in 

Medicare 

payments per lab, 

on average

Lab Tests

• 1,146 procedure 

codes billed

• 451 million lab 

tests performed

• $7.0 billion in 

Medicare 

payments
Medicare Payments for Clinical Laboratory Tests in 2014:  Baseline Data (OEI‐09‐15‐00210) 4

Almost all lab tests paid under Medicare Part B

occurred in one of three settings:  independent

labs, hospitals, and physicians’ offices.  As shown

in Figure 3, over half of Medicare Part B

payments for lab tests went to independent

labs (i.e., labs that are independent of an

institution or a physician’s office).  

Hospital‐based labs accounted for about a

quarter of the total payments.  This amount

does not include the majority of lab tests

performed in hospitals, which are part of a

packaged payment for the beneficiary’s

hospital services.13  Physician‐based labs

accounted for the remaining 19 percent of the

total Medicare Part B payments.

Examination of Medicare Part B payments for

lab tests performed in 2014 shows that

25 tests represented over half (60 percent) of

payments for all lab tests.  Once the new

market‐based pricing goes into effect in 2017,

potentially lower payment rates for these tests

could have a significant impact on overall

Medicare payments for lab tests.  

The top three lab tests based on Medicare payments—all three of which are blood tests—each

accounted for over $400 million in 2014, or a combined 19 percent of total Medicare Part B lab test

payments:   

 blood test for thyroid‐stimulating hormone (procedure code 84443): $477 million

 blood test for a group of blood chemicals (procedure code 80053): $453 million

 complete blood cell count automated test (procedure code 85025): $431 million

Figure 4 on the next page lists the top 25 lab tests based on Medicare Part B payments in 2014, along

with a description and key statistics for each test.   

   

Source: OIG analysis of Medicare Part B lab test payments, 2015. 

* The total payment also includes $32.0 million that Medicare paid 

for lab tests that were performed in other settings, such as skilled 

nursing facilities and dialysis facilities. 

The	top	25	lab	tests,	based	on	

Medicare	payments,	totaled	

$4.2	billion	in	2014		

$4.0 billion

57% $1.7 billion

24%

$1.3 billion

19%

Total: $7.0 billion* 

Independent lab

Hospital-based lab

Physician-based lab

Figure 3. Medicare Payments for 

Lab Tests by Setting in 2014 
Medicare Payments for Clinical Laboratory Tests in 2014:  Baseline Data (OEI‐09‐15‐00210) 5

Test Description 

Procedure 

Code* 

National 

Limitation 

Amount** 

Total Number 

of Lab Tests 

(Millions) 

Total Medicare 

Payments 

(Millions)*** 

1. Blood test, thyroid-stimulating hormone (TSH) 84443 $22.93 21.3 $477 

2. Blood test, comprehensive group of blood 

chemicals 80053 $14.41 40.1 $453 

3. 

Complete blood cell count (red blood cells, white 

blood cells, platelets) and automated differential 

white blood cell count 

85025 $10.61 41.5 $431 

4. Blood test, lipids (cholesterol and triglycerides) 80061 $18.27 27.9 $386 

5. Vitamin D-3 level 82306 $40.40 8.3 $323 

6. Hemoglobin A1C level 83036 $13.24 18.1 $236 

7. 

Drug screen, qualitative; multiple drug classes 

by high-complexity test method (e.g., 

immunoassay, enzyme assay), per patient 

encounter 

G0431 $99.20 2.1 $193 

8. Opiates (drug) measurement 83925 $26.54 2.5 $173 

9. Gene analysis (cytochrome P450, family 2, 

subfamily D, polypeptide 6) common variants 81226 $451.59 0.4 $166 

10. Blood test, basic group of blood chemicals 80048 $11.54 14.1 $137 

11. Blood test, clotting time 85610 $5.37 23.9 $128 

12. Chemical analysis using chromatography 

technique 82542 $24.63 2.0 $122 

13. Parathormone (parathyroid hormone) level 83970 $56.31 2.0 $110 

14. Cyanocobalamin (vitamin B-12) level 82607 $20.56 5.3 $108 

15. Gene analysis (cytochrome P450, family 2, 

subfamily C, polypeptide 19) common variants 81225 $291.80 0.4 $106 

16. PSA (prostate specific antigen) measurement 84153 $25.09 4.2 $104 

17. Bacterial colony count, urine 87086 $11.01 7.3 $79 

18. Thyroxine (thyroid chemical) measurement 84439 $12.30 6.6 $79 

19. Natriuretic peptide (heart and blood vessel 

protein) level 83880 $46.31 1.5 $68 

20. Benzodiazepines level 80154 $25.23 2.1 $67 

21. Ferritin (blood protein) level 82728 $18.59 3.5 $63 

22. Complete blood cell count (red cells, white blood 

cell, platelets), automated test 85027 $8.83 6.8 $58 

23. Folic acid level 82746 $20.06 2.8 $55 

24. Methadone level 83840 $22.28 1.9 $52 

25. Evaluation of antimicrobial drug (antibiotic, 

antifungal, antiviral) 87186 $11.80 3.9 $50 

TOTAL MEDICARE PART B PAYMENTS $4,226

Sources: OIG analysis of Medicare Part B lab test payments, 2015. National limitation amounts are from the 2014 Clinical Laboratory Fee Schedule. 

* See endnote 12 for the American Medical Association (AMA) copyright notice. 

** The national limitation amount for a given lab test is 74 percent of the median rate or—for new tests performed after 2000 for which no limitation 

amount has been established—100 percent of the median rate for that test across the 57 fee schedules. 

*** Figures do not sum to total because of rounding.

Figure 4. Top 25 Lab Tests Based on Medicare Part B Payments in 2014
Medicare Payments for Clinical Laboratory Tests in 2014:  Baseline Data (OEI‐09‐15‐00210) 6

Just as they did for Medicare lab test payments

overall, independent labs received the majority

of Medicare payments for the top 25 lab tests

in 2014.  Specifically, they received 55 percent

of Medicare lab test payments.  Labs based in

hospitals and labs based in physicians’ offices

accounted for the remaining payments

(25 percent and 20 percent, respectively).  

Figure 5 shows how Medicare Part B payments

for the top 25 lab tests are distributed among the different types of settings.

Notably, several of the top 25 tests were performed primarily at independent labs.  Independent labs

accounted for 99 percent of two molecular pathology tests (procedure codes 81226 and 81225).  

They accounted for over 70 percent of 4 other tests in the top 25 (procedure codes 83925, 83840,

82542, and 80154).  Three of those four tests (procedures codes 83840, 82542, and 80154) are tests

for drugs with the potential for abuse.  

Source: OIG analysis of Medicare Part B lab test payments, 2015. 

Note: The total payments also include $19.1 million that Medicare paid for lab tests in the top 25 that were performed in other settings, 

such as skilled nursing facilities and dialysis facilities. 

Independent	labs	accounted	for	

the	majority	of	Medicare	Part	B	

payments	for	the	top	25	lab	

tests		

Figure 5. Medicare Payments for the Top 25 Lab Tests by Setting in 2014

$0 $100 $200 $300 $400 $500

25. 87186

24. 83840

23. 82746

22. 85027

21. 82728

20. 80154

19. 83880

18. 84439

17. 87086

16. 84153

15. 81225

14. 82607

13. 83970

12. 82542

11. 85610

10. 80048

9. 81226

8. 83925

7. G0431

6. 83036

5. 82306

4. 80061

3. 85025

2. 80053

1. 84443

Medicare Payments (Millions)

Procedure Code

Independent lab

Hospital-based lab

Physician-based lab
Medicare Payments for Clinical Laboratory Tests in 2014:  Baseline Data (OEI‐09‐15‐00210) 7

The	top	25	lab	tests	fell	into	

7	categories,	predominantly	the	

chemistry	category	

Labs varied widely in terms of the total payments

they received for performing the top 25 lab tests.  

As shown in Figure 6, 1 percent of labs (309 out of

30,816 labs) received 57 percent of all Medicare

Part B payments for the top 25 lab tests in 2014.  

These labs each received an average of 7.8 million

in 2014 for performing these tests.  The next

4 percent of labs accounted for 24 percent of the

payment for the top 25 lab tests.  These labs each

received an average of $813,250 for these tests.  

The remaining 95 percent of labs accounted for

the remaining 19 percent of payments for the top

25 lab tests.  These labs each received an average of

$28,030 for these tests.  

Thirteen of the top 25 lab tests were in the

chemistry category.  Medicare paid $2.0 billion for

these 13 tests in 2014.  As shown in Figure 7, each

of the other categories had no more than 3 tests in

the top 25.  Tests in the chemistry category

measure the level of a specific substance such as a

protein, hormone, or drug.  Some of these

substances can also be tested for by using tests in

categories other than chemistry.  For example,

among the top 25 lab tests, levels of methadone

can be measured using a test within the chemistry

category, and the presence of methadone can be

detected using a test within the drug‐screen

category.14   

Chemistry 

Organ or DiseaseOriented Panels 

Hematology and 

Coagulation 

Molecular 

Pathology 

Microbiology 

Therapeutic Drug 

Assay 

Drug Screen 

Source: OIG analysis of Medicare Part B lab test payments, 

2015.

A	small	portion	of	labs	

accounted	for	the	majority	of	

Medicare	Part	B	payments	for	

the	top	25	lab	tests		

Figure 6. Concentration of 

Medicare Payments for 

Top 25 Lab Tests Among Labs 

in 2014 

1%

57%

4%

24%

95%

19%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Labs Medicare Payments

(30,816) ($4.2 billion)

Source: OIG analysis of Medicare Part B lab test payments, 2015. 

Note: Includes only labs that performed any top 25 lab test. 

Figure 7. Top 25 Lab Tests in 2014 

by Category 
Medicare Payments for Clinical Laboratory Tests in 2014:  Baseline Data (OEI‐09‐15‐00210) 8

Two of the top 25 lab tests—procedures codes

81226 and 81225—were molecular pathology

tests.  Although these 2 tests were not billed

for as often as other tests in the top 25—

in 2014, Medicare Part B paid for fewer than

400,000 of each test—they were the most

expensive on a per‐test basis, with national

limitation amounts of $452 and $292, respectively.  In contrast, the other 23 lab tests in the top 25

had national limitation amounts ranging from $5 to $99 per test (see Figure 4 on page 5).    

CONCLUSION

Lab tests are integral to the provision of health care for millions of Medicare beneficiaries, as

physicians rely on these tests to help prevent, diagnose, and treat disease.  In 2014, more than half

of all Medicare beneficiaries received lab tests paid under the Clinical Laboratory Fee Schedule,

costing $7.0 billion in Medicare Part B payments.   

The new system of payment required by PAMA

calls for a major undertaking by CMS, with

significant implications for the lab industry.  

Implementing the new market‐based approach

will require CMS to collect data from labs about

the rates paid by private payers for all lab tests.  

We found that in 2014, Medicare paid

63,730 different labs for lab tests billed under

1,146 procedure codes; however, not all labs will

be required to report private‐payer payment rates

to CMS.

This data brief provides baseline analyses of the

top 25 lab tests for 2014, 3 years before the new

payment system goes into effect.  As required by

PAMA, in addition to issuing an annual analysis of

the top 25 lab tests, we will conduct analyses that

we determine appropriate regarding the new

payment system’s implementation and effect.  

   

Among	the	top	25	lab	tests,	

molecular	pathology	tests	cost	

the	most	per	test	

April 2014: Congress passes PAMA 

January 2016: Applicable laboratories 

must begin reporting payment rates for 

private payers 

January 2016: CMS must assign a 

unique procedure code to existing 

advanced diagnostic lab tests (ADLTs) 

January 2017: Market-based payment 

system for lab tests takes effect 

Key Dates in the 

Implementation of the New 

Payment System 
Medicare Payments for Clinical Laboratory Tests in 2014:  Baseline Data (OEI‐09‐15‐00210) 9

METHODOLOGY

We based this data brief on our analysis of Medicare’s claims data for lab tests performed in 2014

and reimbursed under the Clinical Laboratory Fee Schedule.  The claims data were from the National

Claims History Physician/Supplier Part B claims files and National Claims History Outpatient files.  The

Physician/Supplier Part B files primarily include lab test claims from independent labs and labs based

in physicians’ offices.  The Outpatient files primarily include lab test claims from hospital‐based labs.   

Our analysis included only lab tests paid under Medicare’s Clinical Laboratory Fee Schedule.  We did

not include lab tests paid under other payment systems, such as the Outpatient Prospective Payment

System or the Critical Access Hospital payment system.15  We also did not include claims for

physicians’ interpretations of tests.   

We analyzed the claims data to identify key statistics for Medicare Part B payments for lab tests.  We

analyzed the claims data by procedure code, beneficiary, lab, setting, and category.  We identified

the top 25 lab tests on the basis of total payments for each procedure code in 2014, and then

performed a similar analysis for each of the top 25 tests.  

Analysis by lab.  We used different variables to identify individual labs that billed Medicare.  For lab

tests in the Physician/Supplier Part B claims files, we identified a unique lab based on the Tax

Identification Number (TIN).  We chose the TIN because each TIN represents all locations for a lab.  

For tests in the Outpatient claims files, we identified a unique lab based on the organization’s CMS

Certification Number.  The Outpatient claims files do not include a variable for a provider’s TIN.

Analysis by setting.  We identified the setting for a lab test using either the place of service or the

type of bill.  For lab tests in the Physician/Supplier Part B claims files, we identified the setting

according to the “place of service variable.”  For lab tests in the Outpatient claims files, we identified

setting according to the “type of bill variable,” which indicates the type of facility and service.  

Analysis by category.  We categorized a lab test according to its subsection within the CPT

(2014 edition).  Each lab test that has a Level I HCPCS code is assigned to a CPT subsection.  One lab

test in the top 25—procedure code G0431—is billed using a Level II HCPCS code; we used this test’s

description to assign it to a “drug screen” category.

Standards 

This study was conducted in accordance with the Quality Standards for Inspection and Evaluation

issued by the Council of the Inspectors General on Integrity and Efficiency.

   
Medicare Payments for Clinical Laboratory Tests in 2014:  Baseline Data (OEI‐09‐15‐00210) 10

ACKNOWLEDGMENTS 

This report was prepared under the direction of Blaine Collins, Regional Inspector General for

Evaluation and Inspections in the San Francisco regional office, and Michael Henry, Deputy Regional

Inspector General.  

Sarah Ambrose and China Tantameng served as the team leaders for this study.  Other Office of

Evaluation and Inspections staff who provided support include Mandy Brooks,

Berivan Demir Neubert, Evan Godfrey, David Graf, Joyce Greenleaf, Althea Hosein, and

Christine Moritz.

   
Medicare Payments for Clinical Laboratory Tests in 2014:  Baseline Data (OEI‐09‐15‐00210) 11

ENDNOTES 

1 The Protecting Access to Medicare Act of 2014 (PAMA), P.L. No. 113‐93, § 216(a). 2 The estimate is for total savings between fiscal years 2014 and 2024.  Congressional Budget Office, Cost Estimate 

for the Protecting Access to Medicare Act of 2014, March 26, 2014, p. 2. 3 PAMA, § 216(c)(2).   4 See:  OIG, Questionable Billing for Medicare Part B Clinical Laboratory Services, OEI‐03‐11‐00730, August 2014;

OIG, Comparing Lab Test Payment Rates:  Medicare Could Achieve Substantial Savings, OEI‐07‐11‐00010, June 2013;

OIG, Coverage and Payment for Genetic Laboratory Tests, OEI‐07‐11‐00011, June 2012; and OIG, Variation in the 

Clinical Laboratory Fee Schedule, OEI‐05‐08‐00400, July 2009. 5 The Deficit Reduction Act of 1984, P.L. No. 98‐369 § 2303(d). 6 Social Security Act, § 1833(h)(4)(B)(viii), 42 U.S.C. § 1395l(h)(4)(B)(viii).  For new tests performed on or after

January 1, 2001, for which no limitation amount has been established, the limit is 100 percent of the median.   7 PAMA, § 216(a)(1). 8 In the case of advanced diagnostic lab tests (ADLTs), Medicare will update the payment rates annually.  PAMA

established advanced diagnostic lab tests as a new category of test.  The category includes tests that are performed

by a single lab and either (1) analyze multiple biomarkers combined with a unique algorithm to yield a single patient‐

specific result, (2) are cleared or approved by the Food and Drug Administration, or (3) meet other similar criteria

established by the Secretary of Health and Human Services. 9 U.S. Department of Health and Human Services, 2014 CMS Statistics, page 6.  Available online at

http://www.cms.gov/Research‐Statistics‐Data‐and‐Systems/Statistics‐Trends‐and‐Reports/CMS‐Statistics‐Reference‐

Booklet/Downloads/CMS_Stats_2014_final.pdf.  The average projected enrollment in fee‐for‐service Medicare in

2014 was 53.6 million beneficiaries.    10 Ibid., p. 29.  According to this source, Medicare Part B benefit payments are projected to be $256.2 billion for

fiscal year 2014. 11 For lab tests and other Medicare fee‐for‐service claims dated on or after April 1, 2013, Medicare paid 2 percent

less than the payment rate in accordance with the Budget Control Act of 2011, P.L. No. 112‐25, Section 302, and the

American Taxpayer Relief Act of 2012, P.L. No. 112‐240, Section 901 (i.e., sequestration).    12 Labs bill for each test on the Clinical Laboratory Fee Schedule using a Healthcare Common Procedure Coding

System (HCPCS) code, which we refer to as a “procedure code.”  The HCPCS is divided into two subsystems, referred

to as Level I and Level II of the HCPCS.  Level I HCPCS codes are comprised of Current Procedural Terminology codes.  

The five character codes and descriptions included in this study are obtained from Current Procedural Terminology 

(CPT®), copyright 2014 by the American Medical Association (AMA).  CPT is developed by the AMA as a listing of 

descriptive terms and five character identifying codes and modifiers for reporting medical services and procedures.  

Any use of CPT outside of this study should refer to the most current version of the Current Procedural Terminology 

available from AMA.  Applicable FARS/DFARS apply.  Level II HCPCS codes are established by CMS primarily for items,

supplies, and nonphysician services not covered by CPT codes.    13 Medicare pays for most lab tests furnished to hospital inpatients under the hospital inpatient prospective

payment system (IPPS) or as reasonable costs under Part A to hospitals excluded from IPPS.  CMS, Medicare Claims 

Processing Manual, Pub. No. 100‐04, ch. 3, § 10.4.  In 2014, Medicare began to pay for most lab tests performed in

outpatient hospitals under the Outpatient Prospective Payment System (OPPS).  Therefore, the amount that

Medicare paid for lab tests performed in outpatient hospitals decreased in 2014.  For more information about the

limited circumstances under which Medicare pays for outpatient lab tests under the Clinical Laboratory Fee

Schedule rather than the OPPS, see 78 Fed. Reg. 74826, 74942 (Dec. 10, 2013).    14 These tests are procedure codes 83840 and G0431, respectively. 15 In 2014, many of the lab tests performed in outpatient settings (such as hospitals, skilled nursing facilities, and

dialysis facilities) were paid under Medicare payment systems other than the Clinical Laboratory Fee Schedule.  As

we have noted, our analysis included only lab tests paid under Medicare’s Clinical Laboratory Fee Schedule.