What to know about the delay on PAMA laboratory reimbursements

The big picture:

Labs breathed a sigh of relief this month as looming Clinical Lab Fee Schedule (CLFS) cuts were put on hold, thanks to the passage of a short-term government funding bill. The delay, until 2025, in Protecting Access to Medicare Act (PAMA) reporting and associated test reimbursement reductions marks the fifth time Congress has stepped in to defer these measures.

Why it matters:

Without this temporary solution, January would have witnessed up to a 15% slash in numerous CLFS tests, accompanied by the burdensome task for labs to report new private payer data. Should the current reporting requirements of the act be reinstated, labs will find themselves obligated to submit private payer data collected between January and June 2019.

PAMA, introduced in 2014, aimed to revamp CLFS into a unified national fee schedule relying on private market data from a range of laboratories serving Medicare beneficiaries, including independent labs, hospital outreach labs, and physician office labs (POLs).

The initial data collection in 2017, however, fell short, omitting crucial private market data from hospital outreach labs and significantly under-sampling POLs. The consequence? Substantial cuts—almost $4 billion—for labs providing the most commonly requested test services for Medicare beneficiaries. To put it in perspective, the total CLFS spend for 2020 accounted for less than 3% of Medicare Part B spending at $8 billion.

Between the lines:

While we celebrate this temporary reprieve, the industry must now set its sights on passing the Saving Access to Lab Services Act (SALSA) in 2024 to establish a sustainable solution to the pitfalls introduced by PAMA. A heartfelt thanks goes out to the American Clinical Laboratory Association, National Independent Laboratory Association, and all lab advocates who tirelessly fought for this change.

For a deeper dive into how specific code changes may impact your 2024 revenue, reach out to your client success representative for a complimentary financial analysis and consultation.