On April 1, 2014, President Barack Obama signed H.R. 4302: Protecting Access to Medicare Act (PAMA) of 2014. The law’s primary purpose was to extend the Sustainable Growth Rate (SGR) formula for 12 months.
Along with the SGR extension, PAMA addressed a grab bag of Medicare-related issues.
Under PAMA, many clinical laboratory organizations will see a substantial decline over the coming years in the prices paid to them for the highest-volume lab tests reimbursed under Medicare Part B. The law specifies that the federal Centers for Medicare & Medicaid Services (CMS) can begin enacting those price cuts in 2017.
Six aspects of PAMA specifically apply to clinical laboratories:
- Setting prices with market data: Certain labs are required, as of Jan. 1, 2016, to report private-payer payment rates and volumes for their tests.
- New category – Advanced diagnostics tests (ADTs): For certain tests developed and performed by single laboratories, the initial payment rate for ADTs will be set at the “actual list charge.” If the charge exceeds private-payer rates by more than 130%, CMS can recoup the overpayment.
- Setting prices for new tests and expert advisory panel: To ensure transparent and reliable decisions about pay rates and coverage, CMS will assemble a panel of outside advisors, including clinicians and other technical experts. Also, CMS must follow either the crosswalk or gapfill process to determine the initial payment rates and explain, in a transparent manner, how the calculations were made.
- Changes in how Medicare handles lab test codes: For new lab tests, CMS will use temporary HCPCS codes to enable payment prior to a permanent HCPCS or CPT code.
- Coverage requirements and decisions: In support of fair and open coverage decisions for a lab test when a local coverage determination is needed, MACs must now follow a defined development and appeals process.
- Oversight of the process to create coverage guidelines and set lab test prices: Two levels of oversight are written into the law: one by the U.S. Government Accountability Office (GAO), the other by the Office of Inspector General (OIG) of Department of Health and Human Services (DHHS).
CEO SUMMARY: On Nov. 2, the federal Centers for Medicare and Medicaid Services released its Physician Fee Schedule for 2019. It says it will expand the number of labs from which it collects data about the lab test prices paid by private health insurers. While some labs may welcome these changes, groups representing clinical laboratories
Every pathologist and clinical lab administrator should pay attention to two federal court decisions made recently in two different legal cases. One decision is bad news for the entire clinical lab industry. The other is bad news for lab companies that push compliance with federal anti-kickback laws.
The most important court decision came in the American
CEO SUMMARY: Almost half of the nation’s hospitals and health systems are rethinking how to use their clinical labs to support clinical and financial strategies. Options range from outright sale of their lab outreach businesses to lab management agreements or joint ventures with one of the nation’s three billion-dollar public lab companies. Each of the
CEO SUMMARY: Publication of the draft Medicare Physician Fee Schedule on July 12 brought unwelcome news for the clinical lab industry, at least as it pertains to whether hospital lab outreach data should be included in the PAMA market study that the federal Centers for Medicare and Medicaid Services must conduct. In the draft rule,
CEO SUMMARY: Rulings from Judge Amy Berman Jackson of the U.S. District Court in Washington, D.C., are expected soon in the ACLA’s lawsuit against HHS concerning the PAMA final rule that set the course for the new Medicare CLFS rates implemented in January 2018. One lawyer following the lawsuit explains that ACLA has presented strong
IT’S A LONG-AWAITED DEVELOPMENT! Today, a federal lawsuit was filed against the Department of Health and Human Services (HHS) by the American Clinical Laboratory Association (ACLA).
The lab association is asking a federal judge to review specific actions taken by the Centers for Medicare and Medicaid Services in how it is implementing sections of the Protecting