Dive Brief:

• Senate Finance Committee Chairman Chuck Grassley said Tuesday CMS Administrator Seema Verma provided an inadequate response to his inquiry into an oversight report that suggests Medicare could end up paying hundreds of millions of dollars more for laboratory services under its implementation of the Protecting Access to Medicare Act.
• Notably, Verma's response to the senior Iowa Republican, dated March 19, acknowledged CMS relied on maximum payment rates as a baseline for the clinical laboratory fee schedule rather than average rates, a decision the Government Accountability Office said could result in $733 million in additional costs to Medicare.
• In response to additional GAO concerns that CMS is paying individual rates for panel tests instead of a lower bundled rate, Verma said the agency is working to determine if labs billed panel tests using separate current procedural terminology codes instead of the panel code.

Dive Insight:

The American Clinical Laboratory Association and AdvaMedDx accused GAO of having "a serious misunderstanding of actual, real-world billing practices," arguing that claim data for test panels remained consistent when PAMA went into effect.

Despite pushback from industry, James Cosgrove, GAO's healthcare director, previously told MedTech Dive he stood by the report and its findings.

Verma acknowledged to Grassley CMS was unable to phase in payment reductions based on the average Medicare payment rate for a test, instead relying on the maximum rates. GAO in its report said the decision could increase Medicare expenditures by $733 million between 2018 and 2020.

"The requirements to phase-in payment rate reductions from the national limitation amounts were finalized after notice and comment rulemaking in the Medicare Clinical Diagnostic Laboratory Tests Payment System final rule," Verma said.

In its report, GAO recommended CMS "revise these rates as soon as practicable and through whatever mechanism CMS determines appropriate," but it is unclear if CMS is taking action. That does not appear to be pleasing Grassley, who said taxpayers deserve results, not only answers.  

"I appreciate that Administrator Verma and CMS is looking further into potential areas of waste and abuse regarding the rising cost of laboratory fees, particularly regarding panel testing. However, many of the concerns I raised in my January oversight letter remain unanswered," Grassley said in a statement. "I'll continue to demand accountability."

In the 2019 Medicare Physician Fee Schedule CMS took steps to expand data collection from a broader swath of labs, including hospital outreach laboratories. But while the agency has said it continues to examine if additional data collection would result in better data reporting, it does not appear the effort will meaningfully change reimbursement rates.

CMS already conducted an analysis that "determined that additional reporting requirements were not likely to result in a significant change to payment amounts, irrespective of how many additional laboratories reported."

But ACLA President Julie Khani said at the lobby's annual meeting Tuesday it continues to push for smaller laboratories to be able to submit data so CMS doesn't only rely on data from large players like Quest Diagnostics and LabCorp for the next round of data collection.