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Congress Introduces Legislation to Update PAMA Lab Reporting Requirements

NEW YORK – Congress on Wednesday introduced legislation to update the laboratory reimbursement reporting requirements under the Protecting Access to Medicare Act (PAMA).

Called the Saving Access to Laboratory Services Act (SALSA), the bill would require the Centers for Medicare and Medicaid Services (CMS) to use a statistically representative sample of rates from the laboratory market to determine Medicare's Clinical Laboratory Fee Schedule (CLFS) and would increase the time between reporting periods from three to four years.

Passed in 2014 and implemented in 2018, PAMA called 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.

Under PAMA, the US Department of Health and Human Services established criteria for determining which labs were required to report pricing data. However, the agency's initial definition of an applicable laboratory excluded the vast majority of hospital outreach labs, which typically have some of the industry's higher reimbursement rates. Industry organizations have argued that omission of data from these labs led to lower CLFS prices.

The American Clinical Laboratory Association filed a suit in 2017 against HHS challenging the implementation of PAMA. That case is still ongoing.

In 2019, Congress passed the Laboratory Access for Beneficiaries Act, which delayed by one year the reporting of lab payment data required by PAMA and called for the Medicare Payment Advisory Commission, or MedPAC, to review the law's implementation.

In its report, the commission concluded that the lab industry was correct that the original HHS data collection process led to deeper payment cuts than would have occurred had price reporting been more representative of the industry as a whole. The commission also proposed that a random-sampling approach to collecting lab pricing data could address this problem, while also reducing the number of labs required to report data, and therefore the overall administrative burden for the industry.

SALSA would implement such an approach. The bill was introduced by Sens. Sherrod Brown, D-Ohio, and Richard Burr, R-N.C., and Reps. Gus Bilirakis, R-Fla., Richard Hudson, R-N.C., Bill Pascrell, D-N.J., Scott Peters, D-Calif., and Kurt Schrader, D-Ore.

"ACLA is grateful for Sens. Brown and Burr and Reps. Pascrell, Peters, Hudson, Bilirakis, and Schrader for introducing the Saving Access to Laboratory Services Act, and for fighting for our seniors’ access to clinical laboratory services and keeping the clinical laboratory infrastructure healthy," ACLA President Susan Van Meter said in a statement. "Congress must act to permanently end these senseless cuts. Patients and their healthcare providers depend on accessible, high quality laboratory testing to prevent, diagnose, and manage illness. They are counting on Congress to act."

"Community and regional independent laboratories are an indispensable part of our nation’s healthcare infrastructure. These laboratories continue to respond to the COVID-19 pandemic and provide critical laboratory services in underserved communities across the country, despite declining and often uncertain reimbursement," Mark Birenbaum, executive director of the National Independent Laboratory Association, said in a statement. "NILA is grateful to the bipartisan group of legislators who are committed to putting an end to steep laboratory reimbursement cuts and enacting a long-term fix to PAMA."