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LAB Act Picking Up Momentum With Senate Bill, Inclusion in End-of-Year Legislative Package

NEW YORK – The Laboratory Access for Beneficiaries (LAB) Act showed signs of momentum this week as a version of the bill was introduced in the US Senate and the House version was included in the end of year legislative package.

These developments indicate that the law, which would delay by one year the reporting of lab payment data required by the Protecting Access to Medicare Act (PAMA), stands a good chance of passing before the end of the year.

The most recent payment data collection period ran from January 1, 2019 to June 30, 2019. Laboratories are slated to report the next round of data between January 1 and March 31, 2020, and rates based on that data are to be implemented January 1, 2021.

The LAB Act would delay that process by a year while potentially devising new payment data reporting requirements.

The LAB Act has been a priority for industry groups like American Clinical Laboratory Association (ACLA), which hope delaying payment data reporting will give hospital labs additional time to collect payment data and thereby increase their participation in the process. Under PAMA, the Centers for Medicare & Medicaid Services sets prices for lab tests based on private payor rates that it collects using payment data from clinical labs nationwide. However, in the first round of price reporting, most of the data came from large firms like Quest Diagnostics and Laboratory Corporation of America, which, industry advocates claim, have lower cost structures than the typical clinical lab.

Omitting data from labs such as hospital labs, which have higher reimbursements from private payors, industry insiders have said, did not reflect true market prices and thus lowered the rates that CMS reimbursed to labs.

The pricing data scheduled to be collected between January 1 and March 31, 2020 will determine Medicare lab test pricing for the next three years, which makes passing the LAB Act by the end of the year and delaying that reporting period an urgent priority for the industry.

However, while the readiness of hospital and other labs to report pricing data is an issue, so is their willingness. The American Hospital Association has opposed CMS' move to require hospital labs to collect and report private payor data under PAMA, and many hospitals appear to feel that the burden of reporting this data outweighs whatever boost in pricing reporting might provide.

The refusal of many hospital labs to participate could limit the LAB Act's effectiveness. However, the delays enacted by the law would give the industry time to pursue other efforts to blunt PAMA's impact, most notably ACLA's ongoing lawsuit against the US Department of Health and Human Services challenging the rate-setting process.