Dive Brief:

• Despite being in the midst of a lawsuit with HHS over implementation of the Protection Access to Medicare Act, the American Clinical Lab Association praised CMS Friday for taking steps to increase the number of laboratories submitting data informing payment rates under the private payer rate-based Clinical Laboratory Fee Schedule.
• CMS said that it intends collect data from "the broadest possible representation of the national laboratory market on which to base CLFS payment amounts without imposing undue burden on those entities." Specifically, the agency will collect data from labs serving significant populations of Medicare Part C if that revenue helps qualify such labs as applicable laboratories, according to the Medicare Physician Fee Schedule final rule.
• The ACLA said the step will help increase representation of hospital outreach laboratories, but warned more needs to be done. The trade lobby called on Congress to take action to "mitigate the severe damage to laboratories ... caused by the flawed implementation of PAMA." The ACLA also stated "seniors cannot wait for the Courts to take action," signaling the group may not be confident its lawsuit will be successful.

Dive Insight:

U.S. District Judge Amy Berman Jackson dismissed the ACLA's PAMA lawsuit in September, but the group is in the process of appealing the decision. The trade lobby has argued that CMS is "unlawfully instituting a flawed data collection process in the transition to a market-based payment system."

But the latest step by CMS appears to have alleviated at least some of the trade group's concerns. 

"We appreciate the Centers for Medicare and Medicaid Services making changes in the final rule to increase representation of hospital outreach laboratories in the next round of data collection and reporting. This initial step recognizes the flaws in the agency's approach to implementing PAMA and represents a starting point in advancing a more sustainable, competitive market for millions of seniors who depend on clinical diagnostics for their health," Julie Khani​, ACLA president, said in a statement.

In 2017, Medicare spent $8.6 billion on CLFS services, according to the Medicare Payment Advisory Commission. In 2018, CMS began using the weighted median of certain private payer rates to inform CLFS payment rates, but rates cannot face reductions of more than 10% per year for an individual service through 2020. "For most services, payment rates will be in effect for three years, after which CMS will institute revised payment rates based on new data collected from laboratories," a MedPAC fact sheet states.

CMS said that it will continue to consider public comments that were submitted on its idea to alter the low expenditure threshold to include more applicable laboratories as it makes future policies.