NEW YORK – A bipartisan group of US House members last week put forth a bill that would revamp laboratory data reporting requirements under the Protecting Access to Medicare Act (PAMA).
Introduced by Rep. Scott Peters (D-Calif.), Rep. Gus Bilirakis (R-Fla.), Rep. Bill Pascrell (D-N.J.), Rep. Kurt Schrader (D-Ore.), Rep. Richard Hudson (R-N.C.) and Rep. George Holding (R-N.C.), the Laboratory Access for Beneficiaries (LAB) Act would delay the reporting of lab payment data required by PAMA by one year and collect recommendations from the National Academy of Medicine on how to improve the law's requirements around lab payment data reporting.
The proposed legislation was applauded by laboratory industry groups including the American Clinical Laboratory Association, AdvaMed, the National Independent Laboratory Association, and the Point of Care Testing Association, which have argued that existing payment reporting practices have resulted in steeper-than-intended cuts to lab test reimbursement.
Under PAMA, the Centers for Medicare & Medicaid Services set prices for lab tests based on private payor rates that it collected using payment data from clinical labs nationwide. Industry groups have argued, however, that large swaths of labs were not required to report payment data, leading to an overweighting of data from large firms like Quest Laboratories and Laboratory Corporation of America, which, industry advocates claim, have lower cost structures than the typical clinical lab.
In 2017, ACLA filed a lawsuit against the US Department of Health and Human Services challenging the rate-setting process, noting in its lawsuit that "99.3 percent of the laboratory market" was excluding from payment reporting requirements and that, although 7,000 hospital labs billed Medicare for testing services in 2015, accounting for nearly a quarter of the Medicare payments made under the Clinical Laboratory Fee Schedule, only 21 hospital labs reported payment information under PAMA.
That lawsuit was dismissed in September of 2018, but ALCA is appealing the ruling.
In its Physician Fee Schedule for 2019, CMS changed its regulations in ways that could result in a broader set of labs reporting payment data. The new regulations require labs that submit Medicare claims using 14X billing, which is used by hospital outreach labs, to report payment data. The regulations also changed the formula labs use to determine the percentage of revenue coming through the Clinical Laboratory Fee Schedule or Physician Fee Schedule in a way that will likely lead to more labs having to report payment data.
The ultimate impact of these changes remains unclear, though, and hospital and other labs potentially subject to the new regulations have complained about the challenges involved in determining whether they are required to report payment data and collecting that data.
The most recent payment data collection period just ended, running from January 1, 2019 to June 30, 2019. Laboratories are slated to report this payment data between January 1, 2020 and March 31, 2020, with rates based on that data to be implemented starting January 1, 2021.
The LAB Act would delay that process by a year while potentially devising new payment data reporting requirements.
"Our most vulnerable seniors are at the whim of a flawed data collection and reporting process that is fundamentally at odds with the quality care they deserve," ACLA President Julie Khani said in a statement. "The LAB Act is a meaningful step forward to achieving comprehensive PAMA reform for clinical laboratory services."