On July 31 and August 1, CMS held its Annual Laboratory Public Meeting to hear public consultation on coding and payment for new and reconsidered clinical diagnostic laboratory tests. For two days, the Advisory Panel heard and discussed presentations justifying crosswalked and gap-filled prices for new and reconsidered laboratory tests. Echoing the concerns of stakeholders throughout the lab test industry, a number of presenters chose to focus instead on sharing their concerns with the implementation of CMS’ new Protecting Access to Medicare Act (PAMA) regulations.

Under PAMA, reporting laboratories had until March 31 (later extended until May 30) of this year to report their private payer reimbursement for tests on CMS’ Clinical Laboratory Fee Schedule (CLFS). Beginning January 1, 2018, CMS will set Medicare reimbursement rates equal to the median private payer rate for these tests. Despite the delay in reporting, CMS’ Carol Blackford assured the audience that implementation was still on track, with proposed new rates to be released in September and final determinations made in November.

Sylvia Trujillo with the American Medical Association presented the AMA’s concerns with PAMA implementation. Specifically:

• Labs didn’t have adequate notice of what data would be collected
• Reports have emerged that inaccurate data was submitted and labs were not aware that they were subject to reporting requirements
• Data integrity remains a concern
• The regulation required too much data to be accurate

Trujillo cited a study from COLA which found that reduced payment rates under PAMA could create an access crisis for cancer patients unable to obtain laboratory tests near their home, and that these reductions could negatively affect efforts to manage risk under MACRA and 21st Century Cures.

The AMA requested that CMS:

• Publish preliminary information in August about number of labs reporting with market segment and geography information
• Publish preliminary CLFS rates in early September
• Issue an interim final rule to state that CMS will conduct market surveys to validate and adjust final payment amounts
• Allow pricing to go into effect in 2018 only for:
  • Sole source clinical tests
  • Any tests where factors establish high data integrity

These sentiments were echoed by the National Independent Laboratory Association (NILA), who expressed concern that small laboratories had inadequate time to prepare for and respond to PAMA. This caused labs to report inaccurate and incomplete data, in fear that if they reported nothing they would face steep penalties. NILA suggested that implementation of PAMA be delayed until they could better ensure data integrity.

The meeting closed with a discussion of how to pay for automated test panels under PAMA, with speakers strongly supporting an approach based on the pricing of individual tests. Ultimately, the Advisory Panel agreed to discuss the matter further in subcommittee.

If you have questions about how PAMA may affect your business and the patients you serve, you can reach us at gpugh@appliedpolicy.com or 202-558-5272.