NEW YORK – The American Clinical Laboratory Association said on Friday that it filed a notice of its appeal in its lawsuit against the US Department of Health and Human Services challenging the implementation of the Protecting Access to Medicare Act.
Initially filed by ACLA in 2017, the lawsuit was dismissed the US District Court for the District of Columbia in 2018, but that dismissal was overturned in 2019 by the US Court of Appeals for the DC Circuit, which sent the case back to federal district court. The federal district court again dismissed the suit this past March, leading to the notice of appeal ACLA filed last week.
Passed in 2014 and implemented in 2018, PAMA calls for the Centers for Medicare and Medicaid Services to set prices for lab tests based on private payor rates that it collected using payment data from clinical labs nationwide. At the heart of ACLA's complaint is the method HHS used to determine what labs were required to report pricing data under PAMA.
According to the organization, the agency's definition of an applicable laboratory excluded the vast majority of hospital outreach labs, which typically have some of the industry's higher reimbursement rates. This, ACLA argued, caused payment data from large reference labs like Quest Diagnostics and Laboratory Corporation of America to dominate the rate setting process, and because such labs typically receive lower reimbursement than many hospital and small independent labs, this skewed prices lower than they otherwise would have been.
Industry observers have previously noted that the lawsuit is something of an uphill battle for ACLA but that a legislative fix could be a possibility. The organization appeared to indicate as much in a statement last week from ACLA President Julie Khani.
"While we continue our advocacy in the courts, it is even more critical for Congress to take legislative action on PAMA reform," Khani said. "ACLA will continue to work with policymakers to establish a Medicare Clinical Laboratory Fee Schedule that is truly representative of the market and supports continued innovation and access to vital laboratory services, as Congress originally intended. Now is the time to strengthen our laboratory infrastructure and support continued access to the high-quality lab services that seniors depend on."
HHS has since the initial passage of PAMA revised the applicable lab qualifications to include a larger sample of hospital outreach labs. Additionally, in December 2019, Congress passed the Laboratory Access for Beneficiaries Act, which delayed by one year the reporting of lab payment data required by PAMA. The Coronavirus Aid, Relief, and Economic Security Act signed into law in March 2020 provided another one-year delay from PAMA reporting requirements as well as a one-year delay of rate cuts.