NEW YORK (360Dx) – The American Clinical Laboratory Association Tuesday filed the opening brief in an appeal of its lawsuit over the implementation of new Medicare pricing for lab tests under the Protecting Access to Medicare Act, alleging that Health and Human Services Secretary Alex Azar's implementation of the law violated Congress's intent.
ACLA's brief argues that Congress directed HHS to "collect data from any 'laboratory' that receives a majority of its Medicare revenues from relevant fee schedules," to establish market-based Medicare pricing for lab tests, but that Azar's implementation of the rule effectively excluded hospital lab pricing data from being included.
"The Secretary's rule rewrites the statute's majority-of-revenues test to take into account non-laboratory revenue and, through this rewrite, exempts virtually all hospital laboratories from the data reporting requirement," the brief stated.
Because hospital laboratories compete directly with independent and physician-office labs, and represent a significant portion of the market, the HHS secretary's rule "guarantees that the data collected does not reliably represent the private market as Congress intended," the brief stated.
US District Judge Amy Berman dismissed the lab association's lawsuit against Azar in September, citing a "lack of subject matter jurisdiction." ACLA filed a notice of appeal with the Appellate Court of the District of Columbia in October.
ALCA's brief argues that Berman's ruling is wrong and should be reversed.
"If the district court were correct, the statutory bar would prevent a laboratory from challenging the Secretary's final rule as in excess of his delegated powers in response to an enforcement action imposing civil penalties for alleged noncompliance," the brief stated. "There is no clear indication that Congress intended such an extraordinary departure from the basic principle that when an agency seeks to impose legally binding obligations, judicial review is necessary to safeguard lawful and accountable government."
The district court ruling also failed to address the question of whether HHS's final rule "falls within an exception to any judicial bar," according to the ACLA brief.
If the district court had addressed this question, it would have found that Azar "exceeded his lawful authority," the brief stated.
"It is imperative that the Court put a stop to the Secretary's regulatory overreach," ACLA President Julie Khani said in a statement. "Seniors are bearing the direct harm from the Department's continued reliance on a failed process that directly contradicts the stated goals of Congress in protecting beneficiaries' Medicare lab benefits."
Khani also called on Congress to take immediate action to reform and modernize the Clinical Lab Fee Schedule.