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Protecting Access to Medicare Act (PAMA)

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).

In Lawsuit Against HHS, ACLA Has Strong Positions

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…

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ACLA Sues HHS over Market Price Study, Fee Cuts

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 …

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ACLA hits Medicare fee schedule cuts with lawsuit

This is an article from the Dec. 11, 2017 issue of THE DARK REPORT. The complete article is available for a limited time to all readers. This article plus a full analysis of 2017 developments in the PAMA process are available at all times to paid members of the Dark Int…

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Looming CMS lab fee schedule cuts unite AMA, AHA and labs in opposition

This is an excerpt from a 1,237-word article in the Oct. 8, 2017 issue of THE DARK REPORT. The complete article is available for a limited time to all readers, and available at all times to paid members of the Dark Intelligence Group. CEO SUMMARY: In what m…

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AMA, AHA Join Labs to Request Delay, Fix

CEO SUMMARY: In what may be a first for the clinical lab industry, the American Medical Association and the American Hospital Association joined with 20 other healthcare associations to ask CMS Administrator Seema Verma to address the problems with the CMS proposal involving Medicare Part B f…

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For Top 20 Tests, CMS to Cut Payment by 28% in 2018-2020

ON SEPT. 22, MEDICARE OFFICIALS RELEASED THE DRAFT PRICES for the 2018 Clinical Laboratory Fee Schedule. The bad news for the lab industry is that the fee cuts are deeper than the federal Centers for Medicare and Medicaid Services had predicted earlier. The price cuts to clinical la…

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XIFIN CEO White Analyzes Medicare 2018 Fee Cuts

CEO SUMMARY: If the draft lab rates that CMS published Sept. 22 for the Clinical Laboratory Fee Schedule for 2018 go into effect Jan. 1 as proposed, then clinical labs will see a cut of 28% in what they get paid for the top 20 most common tests, according to a recent analysis. The rates t…

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Labs Serving Nursing Homes, Rural Areas to Suffer Most

CLINICAL LABORATORIES WITH A HIGH percentage of Medicare Part B lab test reimbursement are expected to suffer the most under the Part B Clinical Laboratory Fee Schedule (CLFS) cuts that the Centers for Medicare and Medicaid Services proposed Sept. 22. With the proposed rates schedul…

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2014’s PAMA Fix Comes Back to Haunt Big Labs

AS YOU READ THE INTELLIGENCE BRIEFINGS IN THIS ISSUE about lab industry efforts to convince Congress, the administration, and the new leaders of the Centers for Medicare and Medicaid Services to delay implementation of the PAMA final rule on market price reporting, keep in mind that…

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Hospital Lab Data Essential For CMS Market Price Study

CEO SUMMARY: In five months, Medicare officials will implement a new Part B clinical laboratory fee schedule based on private payer lab price data submitted by certain medical laboratories required to report that data. At this year’s Executive War College, the CEO of XIFIN, Inc., reported o…

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