Dive Brief:
- A bipartisan group of House lawmakers is proposing a delay in the next round of data collection for setting CMS payment rates for clinical lab tests under the Protecting Access to Medicare Act (PAMA).
- The six lawmakers last week introduced a bill that would instruct the National Academy of Medicine (NAM) and CMS to conduct a study and make recommendations for how to improve the data collection process, which has drawn the ire of the laboratory industry and criticism from the Government Accountability Office (GAO).
- The Laboratory Access for Beneficiaries (LAB) Act was introduced by Reps. Scott Peters, D-Calif., Gus Bilirakis, R-Fla., Bill Pascrell, D-N.J., Kurt Schrader, D-Ore., Richard Hudson, R-N.C., and George Holding, R-N.C.
Dive Insight:
Congress passed PAMA in 2014 with the intention of saving taxpayers money by linking laboratory reimbursement payments to private market rates, replacing a methodology based on adjusted historical data. CMS is expected to adjust its payment rates every three years based on data labs collect and report during a six-month period.
When the first adjustments went into effect in 2018, the HHS Office of the Inspector General raised concerns about the completeness and accuracy of the data CMS used to set its payment rates. In addition, a GAO report said the methodology, instead of saving the government money, could end up costing CMS billions in overpayments.
The lab industry contends the rates do not incorporate enough data from smaller laboratories and hospital laboratories and therefore do not accurately reflect the entire market. Reimbursement cuts due to PAMA have hurt the bottom line at clinical labs. For example, testing giant LabCorp's diagnostic unit saw its revenue decline 2.7% in the first quarter.
The American Clinical Laboratory Association sued the HHS in 2017 over the implementation of PAMA, arguing the collected data reflect only a small sampling of the laboratory market. A federal judge dismissed the case, but ACLA is in the process of appealing.
ACLA, the American Hospital Association, AdvaMedDx and the American College of Physicians have urged Congress to take legislative action to modify PAMA to mitigate the payment cuts that ACLA has said could cause serious financial harm to thousands of hospitals and small independent laboratories.
The House bill would delay data reporting for one year to allow more time for CMS to collect complete private payer information from laboratories to use as the basis for determining reimbursement rates, according to Peters, the bill's sponsor.
The bill also calls for NAM to provide recommendations to Congress on less burdensome data collection methods and representative reimbursement rate calculations to create a reliable market-based system. The legislation does not change the payment cuts scheduled to go into effect in 2020 under PAMA.
ACLA, AdvaMed, the National Independent Laboratory Association, and the Point of Care Testing Association welcomed the legislation, which they said in a joint statement would "address a flawed data collection process that continues to erode Medicare lab benefits for the country's most vulnerable seniors."
