Agreements entered into with laboratories remain in effect for 1 year. Each agreement specifies the kinds of laboratory services it covers and the agreed
upon payment for these services. It provides for termination or nonrenewal of the
agreement at the end of the year, and for a mutually acceptable method for renewal
and/or renegotiation of the reimbursement rate.
The carrier reviews any proposal received, determines the laboratory’s eligibility,
and works out with the laboratory any modifications deemed advisable or necessary.
It submits the proposal to the Medicare RO with its evaluation, recommendations, and
information on the current allowable charges for the laboratory’s services. The Medicare
RO reviews all the information, requests additional information as needed, and forwards
the proposal to Central Office with its analysis and recommendations. CMS determines
whether the proposal is acceptable and/or what changes may be necessary. When a mutually
acceptable proposal has been worked out, the laboratory and carrier involved are notified
by the Medicare RO of the formal and final procedures necessary to effectuate the