Lab Stakeholders Take Action to Prevent Drastic Cuts in the Medicare Lab Fee Schedule

Letter from Congress to CMS asks for delay in reporting rule of Protecting Access to Medicare Act of 2014

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WITH MANY CLINICAL LABORATORY STAKEHOLDERS anticipating major revenue shortfalls due to the Protecting Access to Medicare Act lab test market price reporting rule that went into effect January 1, THE DARK REPORT reports overlooked news that, at the behest of clinical laboratory associations, elected officials in Congress have signed a letter that asks the Centers for Medicare & Medicaid Services to delay the rule’s implementation. The lab industry fears that the reporting rule will result in big cuts in the Medicare lab fee schedule.

CLINICAL LABORATORY ASSOCIATIONS are using a letter-writing campaign to members of Congress as a last-minute Hail Mary attempt to head off the controversial lab price market reporting rule that CMS intends to implement after January 1.

Both Democrats and Republicans in the U.S. House of Representatives and the U.S. Senate have signed a letter to the acting administrator of the federal Centers for Medicare & Medicaid Services asking for a delay of the rules to implement the Protecting Access to Medicare Act.

Copies of the letter, dated December 14, circulated in both houses of Congress. The letter asks CMS Acting Administrator Andrew Slavitt to delay implementing the Medicare Clinical Diagnostic Laboratory Tests Payment System Proposed Rule. CMS published the proposed rule in the Federal Register on October 1.

Fears of Skewed Data

Alan Mertz, President of the American Clinical Laboratory Association, said, “This Dear Colleague letter vigorously illustrates that the proposed timeline for reporting data and pricing will result in skewed data and Medicare [Part B] rates that do not reflect the market.”

Specifically, the fear is that drastically reduced test prices to be reported by the country’s two largest labs, Quest Diagnostics and Laboratory Corporation of America, will results in major cuts in the Medicare lab fee schedule, which would in turn create revenue shortfalls for already-struggling labs. CMS has stated that it projects cost reductions of $5 billion over 10 years from implementation of this mandate.

The letters signed by senators and representatives explain the biggest problems labs have with PAMA since the Act was signed into law in 2014. In the letter, members of Congress say they are concerned about several specific provisions of the proposed rule. First, the letter says CMS should “…provide clinical laboratories with sufficient time to implement these important changes, and preserve market competition to ensure continued access to laboratory services.”

The timeline calls for CMS to set rates for clinical laboratory tests starting January 1, 2017, based on lab-pricing data to be collected starting January 1, 2016. Clinical labs have no idea how to comply with CMS’ data collection system as outlined in the Medicare Clinical Diagnostic Laboratory Tests Payment System Proposed Rule, published October 1, 2015. Under the proposal, some labs are prohibited from participating in the reporting process CMS recommends, the letter said.

“We are deeply concerned that this prohibition will skew market data, resulting in Medicare rates that are not reflective of true market prices,” the letter said.

Another concern involved CMS’ definition of a new category of tests— advanced diagnostic laboratory tests (ADLTs).

What issues do you have with the PAMA lab test market price reporting rule? Are you more concerned with the potential loss of revenue, or with CMS’ proposal to regulate ADLTs? Please share your thoughts with us in the comments below.


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