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Congress Delays PAMA Cuts and Reporting Requirements

NEW YORK – Congress again delayed implementation of lab reimbursement cuts and payment data reporting required by the Protecting Access to Medicare Act with the passage this week of the Protecting Medicare and American Farmers from Sequester Cuts Act.

The act also suspended scheduled 2 percent sequester cuts to Medicare reimbursement that would have likewise impacted lab payments. Both the PAMA and sequester cuts were delayed by the Coronavirus Aid, Relief, and Economic Security Act, which was signed into law in March 2020.

Under the legislation passed this week, the PAMA payment reporting period is now scheduled for Jan. 1, 2023, to March 31, 2023, while the rate reductions called for under PAMA will phase in beginning in 2023 as opposed to 2022.

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. The law was intended to reduce Medicare spending on lab testing and was spurred on by the recognition that for many tests, Medicare was paying higher rates than were private payors.

According to numbers from the American Clinical Laboratory Association, absent passage of the law, roughly 600 tests were scheduled for reimbursement cuts of up to 15 percent. The organization said that commonly ordered lab cuts have seen a cumulative reimbursement cut of 27 percent since PAMA went into effect in 2018.

ACLA filed a suit in 2017 against the US Department of Health and Human Services challenging the implementation of PAMA. That case is still ongoing.

In addition to the respite from reimbursement cuts and reporting requirements, the delay gives the lab industry time to continue its efforts lobbying against PAMA. In a statement, Mark Birenbaum, executive director of the National Independent Laboratory Association, said "NILA is grateful Congress took this step to delay steep cuts to laboratory reimbursement, and we urge the House and Senate in the coming year to work on a viable long-term fix to PAMA."

In a statement following passage of the law in the House, US Rep. Bill Pascrell, D-NJ, indicated his openness to revising PAMA, noting that the House was "moving with urgency to shore up Medicare while we fashion a permanent bridge to the future."

"Because of our bill, [labs] will continue doing their society-saving jobs with greater peace of mind while we work on a long-term solution to the punishing cuts they face," he added. His statement further called HHS' implementation of PAMA "misguided."

In 2019, Pascrell was one of several representatives to introduce the Laboratory Access for Beneficiaries Act, which delayed by one year the reporting of lab payment data required by PAMA and instructed the Medicare Payment Advisory Commission to prepare a report reviewing the law's implementation. The commission released that report in June 2021.