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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).
2015’s Top 10 Lab Stories Show Significant Changes
CEO SUMMARY: During 2015, two stories captured the full attention of most pathologists and clinical lab managers. One was how CMS intends to gather lab price market data as mandated by PAMA. The other was the continued efforts by the FDA to move ahead on proposed guidance for regulation o…
Labs React with Criticism to Proposed ADLT Rule
CEO SUMMARY: Some in the lab industry had high hopes that passage of the Protecting Access to Medicare Act (PAMA) last year would favorably resolve a number of important issues. However, those hopes were dashed following the September 25 release by CMS of a proposed rule setting out how i…
Will 2016 Bring Opportunity or Tribulations for Labs?
WE ARE JUST ABOUT EIGHT WEEKS FROM THE ADVENT OF 2016. Given the rapid transformation of healthcare that continues to unfold, it is timely to assess how clinical labs and pathology groups are likely to fare during the coming year. On the plus side, the ongoing evolution toward integration of clinica…
Are Labs Facing a Collapse in Test Prices?
IS IT REASONABLE, AT THIS TIME, TO ASK IF THE LAB INDUSTRY IS FACING a potential collapse in lab testing pricing? Were I to have asked that question several years ago, most of you would probably have responded with skepticism. But how the times have changed! Take the Protecting Access to Medicare Ac…
Beware Ides of March! Lawmakers Are in Session
CEO SUMMARY: Few pathologists and lab administrators know that, when the Protecting Access to Medicare Act of 2014 (PAMA) became law last April 1, language in the bill was scored to reduce Part B clinical laboratory test fees by $2.5 billion over 10 years. Congress used those lab…
Market Price Report Rules Must Address All Issues
CEO SUMMARY: Under the Protecting Access to Medicare Act, CMS must collect market price and volume data from certain labs beginning January 1, 2016. CMS will use this data to establish Part B clinical laboratory fees beginning in 2017. One lab association representing community a…
Lab Industry to Confront Major Issues during 2015
CEO SUMMARY: Will 2015 turn out to be a watershed year for the clinical laboratory industry? Not only are two federal agencies pushing forward with initiatives that will touch nearly every medical lab in the United States in the next 12 months, but other equally powerful trends c…
Healthcare Cost Solutions Will Continue to Pinch Lab Industry Revenues in 2015
CEO SUMMARY: Will 2015 turn out to be a watershed year for the clinical laboratory industry? With healthcare cost solutions continuing to squeeze laboratory profits, two federal agencies are pushing forw…
PAMA’s New Rules Affect Lab Test Pricing, Coverage
CEO SUMMARY: For several reasons, the “Protecting Access to Medicare Act” (PAMA) has the potential to be the most disruptive federal legislation directed at the clinical lab industry since the enactment of CLIA 1988. Following passage of the law, some lab industry groups have taken di…
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