CEO SUMMARY: Both the pending VALID Act and SALSA Act continue to push ahead as 2022 comes to an end. Meanwhile, a new bill centered on the Physician Fee Schedule may protect pathologist payments. These three different proposals share something in common: To pass this year, they need to be part of a larger spending bill that will likely go before Congress in December.
THREE LABORATORY-RELATED PROPOSALS are seeking ways to get attached to a larger spending bill that will go before Congress by year’s end, though nothing is guaranteed for any of them. Observers are eyeing the status of the following proposals:
- Verifying Accurate Leading-edge IVCT Development (VALID) Act, which seeks to move oversight of laboratory-developed tests (LDTs) to the U.S. Food and Drug Administration (FDA).
- Saving Access to Laboratory Services Act (SALSA), which aims to reduce lab test reimbursement cuts already called for under the Protecting Access to Medicare Act (PAMA) of 2014.
- The new Supporting Medicare Providers Act, which would temporarily reduce cuts to the Physician Fee Schedule, including to pathology services, that will go into effect in 2023.
Recent mid-term election results will have little influence on VALID Act or SALSA, said Erin Will Morton, Partner at CRD Associates in Washington, D.C. Morton represents the National Independent Laboratory Association (NILA) in legislative matters. Rather, the lab proposals will compete with other priorities to get added to the year-end spending bill.
“Regardless of what happened with the election, policy makers will want to come back in January and start fresh,” Morton said. “So, I think they want to get a year-end spending bill out of the way before the end of this year.”
Of immediate concern to clinical laboratories and anatomic pathology groups are reimbursement cuts of up to 15% for 800 laboratory tests. These price changes are set to occur on Jan. 1 under the PAMA statute.
SALSA seeks to halt the severity of those decreases by taking three actions:
- Eliminate scheduled Jan. 1 price cuts.
- Implement caps on future payment decreases to the Medicare Part B Clinical Laboratory Fee Schedule (CLFS).
- Reconfigure how federal agencies calculate lab test payments for the CLFS.
“We’re having conversations with Congressional committee staff and the bill’s sponsors about including SALSA in the year-end package that gets put together,” Morton said. “However, anything that gets put into that year-end bill needs to be paid for.”
If SALSA does not make it into a spending bill in December, the PAMA cuts would remain for Jan. 1. (See TDR, “PAMA Cuts Might be Reduced to Zero for 2023,” Aug. 8, 2022.) Under those circumstances, lab industry associations would try to negotiate another short-term delay in pricing cuts, Morton noted.
VALID Act’s Focus on LDTs
Currently, LDT approval comes via the Clinical Laboratory Improvement Amendments of 1988. The VALID Act aims to instead require LDT developers to submit an FDA application and related clinical data, with some exceptions.
NILA, which Morton represents, has expressed concerns about provisions within the VALID Act, as have other laboratory organizations. Among the biggest worries is that it would stifle LDT innovation at labs because of the cost associated with FDA review.
On the other hand, champions of the VALID Act feel LDTs are akin to medical devices and thus should undergo pre-market approval by the FDA to protect patient safety.
New Bill Wants to Protect Payments
The Supporting Medicare Providers Act was introduced in September to combat cuts to the Physician Fee Schedule.
“Estimates indicate the overall impact to pathology payments from 2022 to 2023 would decrease by 1%,” the College of American Pathologists (CAP) noted earlier this year. Part of the cuts are due to the expiration of a one-time increase in physician payments passed by Congress in late 2021.
The new bill is short and would simply amend dates to avoid reductions in reimbursements to physicians. The proposal does not represent an overhaul to the Physician Fee Schedule.
Lab professionals who have strong views on any of these proposals still have time to express their opinions to their senators and representatives, which could influence whether they get attached to the larger spending bill.
Contact Erin Will Morton at emorton@dc-crd.com.
Important Lab Bills Pending in Congress
HERE IS A RUNDOWN of pending legislative action that could affect clinical laboratories and pathology groups:
- Saving Access to Laboratory Services Act (SALSA—S.4449) aims to permanently reduce scheduled cuts to lab test pricing under the Protecting Access to Medicare Act of 2014 (PAMA) and adjust how pricing data is reported by labs to the federal government.
- Supporting Medicare Providers Act (H.R.8800) attempts to reduce cuts to the Physician Fee Schedule, including to pathology services, that are scheduled to go into effect in 2023.
- Verifying Accurate Leading-edge IVCT Development Act (VALID Act—S.2209) seeks to move oversight of laboratory-developed tests from the Clinical Laboratory Improvement Amendments of 1988 to the U.S. Food and Drug Administration.
