Congress Averts PAMA Cuts to Lab Test Rates for 2023

Move offers only a temporary halt to PAMA cuts to Medicare fees without more solid legislative action

CONGRESS ENACTED LEGISLATION LAST MONTH that suspends implementation of the next round of price cuts to the Medicare Part B Clinical Laboratory Fee Schedule (CLFS) that was scheduled to take effect on Jan. 1. This is a welcome development for the medical laboratory industry. 

A two-paragraph inclusion in a 4,000- page, year-end government spending bill instructs federal health officials to suspend payment cuts called for under the Protecting Access to Medicare Act (PAMA). President Biden signed the spending bill into law on December 29 after the House of Representatives and the Senate passed it the week before. 

However, much like a similar effort at the end of 2021, the reprieve is only temporary and falls short of PAMA-related reform that many in the clinical laboratory industry have called for. More action will be needed on Capitol Hill in 2023 to avert additional PAMA cuts in coming years. 

Details of Reprieve 

Under the spending bill provision, there will be no reductions in Medicare payments for diagnostic tests through 2023. Had this provision not gone into effect, laboratories faced a 15% cut in payments for approximately 800 clinical lab tests for 2023 as called for in PAMA. However, without additional legislative action the rate cuts will resume on Jan. 1, 2024. 

Additionally, the bill also suspended PAMA-related reporting requirements for labs in 2023 for one year. Per the PAMA statute, in 2023, the Centers for Medicare and Medicaid Services (CMS) was to have labs report the prices for tests that were paid by private health plans. CMS would then use that private payer price data to set prices for the CLFS. 

That data previously resulted in Medicare paying labs 10% less for tests in each of the years 2018, 2019, and 2020. Some aspects of the data collection resulted in a lawsuit by the American Clinical Laboratory Association (ACLA). (See TDR, “On Appeal, ACLA Gains PAMA Victory in Court,” Aug. 29, 2022.) 

Congress delayed scheduled PAMA cuts in 2021 and 2022 due to a combination of the pandemic and the resulting raised awareness about the role clinical laboratories played in combatting SARS-CoV-2. 

SALSA Effort Sidelined 

In 2022, a bipartisan group of lawmakers worked with the laboratory industry to craft a proposed bill called Saving Access to Laboratory Services Act (SALSA). The bill aimed to overhaul how PAMA dealt with lab test payments and data reporting. (See TDR, “PAMA Cuts Might be Reduced to Zero for 2023,” Aug. 8, 2022.) 

Efforts to include SALSA in the recent year-end spending bill were unsuccessful, possibly due to finances. The Congressional Budget Office estimated SALSA would have cost $6 billion over 10 years, while a one-year delay to PAMA cuts would instead save $730 million over 10 years in reduced test payments, according to a 360Dx report on Dec. 21. 

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