NEW YORK (GenomeWeb) – The Centers for Medicare & Medicaid Services has agreed to "exercise enforcement discretion" for 60 days, giving laboratories some more time to report private payor pricing data required under the Protecting Access to Medicare Act (PAMA).
The American Clinical Laboratory Association last week asked CMS to delay implementation of PAMA for another year. PAMA, which was originally slated to take effect this year, will retire the current system by which Medicare pays for lab tests, relying on Medicare contractors to "crosswalk" or "gapfill" pricing, and begin paying for tests base on private payor rates.
CMS issued a final rule on implementing the law last year, and at the urging of lab and diagnostic industry stakeholders, agreed to push the implementation date to Jan. 1, 2018. But labs had a deadline of March 31 to report private payor rates. After hearing from labs that they were having trouble submitting data using CMS' data reporting system, CMS has again agreed to push back the reporting deadline to May 30, but is still planning to go live with the new private payor rate-based clinical lab fee schedule at the start of 2018.
"Industry feedback suggests that many reporting entities will not be able to submit a complete set of applicable information to CMS by the March 31, 2017, deadline, and that such entities require additional time to review collected data, address any issues identified during such review, and compile the data into CMS’s required reporting format," the agency said in a statement. "This 60-day enforcement discretion period is the maximum amount of time CMS can permit to still have sufficient time to calculate the CLFS payment rates scheduled to go into effect on Jan. 1, 2018."
ACLA lauded CMS' willingness to extend the reporting time frame, but continued to express concern about the way the agency has defined "applicable labs" that will report the private payor rates upon which CMS will calculate pricing. According to the agency's criteria, a lab would be able to report rates to CMS if by using its National Provider Identifier it receives more than 50 percent of its Medicare revenues from lab and physician services and gets more than $12,500 in Medicare revenues from lab services.
ACLA has said that CMS' definition fails to capture lab pricing across the entire market. According to a report from the Office of Inspector General, around half of the more than 3,200 independent labs, a small portion of the physician office labs, and a few hospital outreach labs that obtain an NPI, will be required to report data. As such, new payment rates under PAMA will be based on data provided by 5 percent of labs that received 69 percent of Medicare payments in 2015.
CMS said in its final rule, meanwhile, that its applicable lab definition would allow hospital outreach labs with separate NPIs to be able to report pricing.
Several lab industry groups, including ACLA, the diagnostics interest group AdvaMedDx, and the College of American Pathologists sent a letter to HHS Secretary Tom Price stating that they are worried that CMS would implement changes to the clinical lab fee schedule "while significant programmatic issues remain unresolved."
ACLA President Julie Khani noted that the organization supports the push to reform Medicare payment procedures, "but it is imperative that modifications work in favor of patient access, and recognize the value and role of diagnostics. We look forward to continuing to work with CMS on addressing these issues and achieving a fair and effective solution that reinforces a robust laboratory market and protects patient access to important diagnostics."