Clinical Labs Win Challenge to Medicare Reimbursement Rule

An HHS rule used to calculate Medicare reimbursements for clinical laboratories was flawed because it exempted most hospital labs from data-reporting requirements, creating the risk that reimbursement levels were too low, a federal appeals court said Friday.

The 2016 rule was arbitrary and capricious under the Administrative Procedure Act, the US Court of Appeals for the District of Columbia Circuit said in overturning a lower court’s dismissal of the lawsuit.

The Department of Health and Human Services failed to reasonably explain its decision to exclude a “sizable portion” of laboratories from the requirement to provide data to be used in ...