LAB sUPPORT FOR PAMA REFORM

In 2014, Congress passed the Protecting Access to Medicare Act (PAMA) which included changes to Medicare’s methodology for reimbursing laboratory testing. Rather than a complex regional approach, the Clinical Laboratory Fee Schedule (CLFS) was adjusted to a national payment rate based on a weighted average from the market. Since the implementation of PAMA, there have been widespread cuts to laboratory test reimbursement because of flawed data collection by the Centers for Medicare and Medicaid Services (CMS). According to the Medicare Payment Advisory Commission (MedPAC), cuts across the lab industry will be 24 percent on average by 2025.

LAB has consistently supported PAMA reform and has successfully advocated for delays in payment cuts in both the 117th and 118th Congresses. In 2022 when Congress was struggling to afford comprehensive PAMA reform, LAB sent a letter to congressional leaders requesting a one-year delay of PAMA reporting and payment cuts. This letter focused on the following aspects of PAMA and its impact on laboratories:

• Delay impending reporting requirements and payment cuts scheduled to hit the medical CLFS next year until 2023. As the pandemic persists and many laboratories are focused on supplying COVID testing for individuals to comply with new testing mandates, the scheduled reporting, and payment cuts should be delayed until after the pandemic ends.

• The implementation of PAMA has caused widespread cuts to laboratory test reimbursement because of flawed data collection by the Centers for Medicare and Medicaid Services (CMS). According to the Medicare Payment Advisory Commission (MedPAC), cuts across the lab industry will be 24% on average by 2025.

• Due to strains from the COVID-19 pandemic, laboratories quickly developed, tuned, distributed, and performed novel tests to help respond to the public health emergency, working to maintain staff and testing supply as Americans became dependent on their diagnostic testing results to function in everyday life.

• Congress recognized the impact of PAMA on the lab industry: first in the Further Consolidated Appropriations Act of 2020 to correct the clear problems from PAMA implementation and again in the Coronavirus Aid, Relief, and Economic Security (CARES) Act to address the strains the pandemic has placed on labs. Both laws delayed the reporting requirements and payment cuts scheduled in PAMA. Nothing has changed–neither the need to adjust PAMA’s flawed data collection methods nor the complications of the public health emergency.

• Moving the timelines of these policies to reflect the ongoing pandemic will help the laboratory industry function and will give additional time to ensure data collected by CMS represents the realities of the market.

LAB also helped secure delay of PAMA cuts in 2024 by advocating for another delay in 2023.