CMS delays clinical lab fee schedule data reporting, cuts capped at 15% for 2021

Dive Brief:

CMS said Thursday it is delaying data reporting for clinical diagnostic laboratory tests, used to inform development of the clinical laboratory fee schedule, by one year until 2021.
Despite the delay, CMS said Protecting Access to Medicare Act cuts to clinical lab tests will not be frozen, with 2021 lab reimbursement based on data reporting from 2017. Cuts to lab fee schedule rates in 2020 are capped at 10%, but the reduction cap is set to rise to 15% in 2021.
Cowen Washington Research Group's Eric Assaraf wrote the decision to maintain the status quo on expected cuts comes despite hope by labs the agency would freeze rates in 2021.

Dive Insight:

The Laboratory Access for Beneficiaries Act, passed as part of funding legislation late last year, also instructs the Medicare Payment Advisory Commission to study and recommend improvements to the data reporting process, which industry argued inadequately measured rates from a number of laboratories.

Data that was set to be gathered between Jan. 1, 2020, and March 31, 2020, is now delayed until the period between Jan. 1, 2021, and March 31, 2021, after which reporting will continue on the normal three-year cycle, according to CMS. But PAMA cuts are set to continue in the meantime.

"Rather than waiting for the new data, however, CMS is now indicating it will base 2021 lab rates off of data collected in 2017," Assaraf wrote. "While this development may be disappointing for clinical labs, it's worth noting that the majority of PAMA cuts will likely be realized by the end of 2020, as it is the third year of cuts capped at 10% (for a total of 30%)."

The American Clinical Laboratory Association is in the midst of litigation to reverse PAMA cuts, which its argues HHS did not implement as Congress intended. But the court challenge is unlikely to succeed, according to Assaraf.

In a Dec. 23, 2019, reply brief to HHS's cross-motion for summary judgment in the U.S. District Court for the District of Columbia, the industry association argued that HHS "impermissibly and unreasonably redefines 'applicable laboratory' in contradiction of PAMA, exempting almost all hospital laboratories from the statute's data-collection requirements."

"There's been growing acknowledgement, most recently from Congress, that HHS's actions undermined the intent of PAMA," ACLA President Julie Khani said in a statement. "As our legal challenge advances through the courts, we will continue to work to protect seniors' access to vital laboratory services on behalf of our members and the millions of patients they serve."