Industry Questions How Many Hospital Labs Will Be Reporting Under PAMA

When the Centers for Medicare & Medicaid Services (CMS) announced in mid-June the final rules governing the Protecting Access to Medicare Act (PAMA), it drew praise from several groups that had lobbied for major changes. PAMA requires labs to gather their commercial billing data and submit it to CMS for review and as the basis for future rate-setting. Under the rules, labs have to submit payer data for the first half of this year to CMS by the end of the first quarter of 2017. CMS’ payment recalculations would then begin in 2018, a year later than originally proposed. Labs are obviously not paid at uniform rates, but the differences can be significant. Hospital-based laboratories, for example, can be paid at much higher rates than standalone labs. Their inclusion on a large scale would therefore be economically advantageous for the sector as a whole.

One of the changes CMS made to the final PAMA rule was the relaxing of reporting guidelines as they relate to hospital-based laboratories. Under the proposed rule, CMS had said a qualifying hospital laboratory would not only be an independent Medicare entity, but have a taxpayer identification number (TIN) and a national provider identifier number (NPI). Instead, CMS relented, dropping the TIN requirement but keeping the NPI prerequisite. But whether or not many hospital labs actually have their own NPIs is a matter of speculation. So while the change may increase the likelihood of having at least some hospital labs reporting, it is not clear that a significant number of hospital labs will be included.

Stan Schofield, president of NorDx, the laboratory network for MaineHealth and vice president and managing principal for the Compass Group, a trade federation that represents hospital-based labs, actually believes few hospital labs will participate in reporting data. “The way (the PAMA rules) have been engineered, most big hospital labs are going to be excluded,” he said. Barry Portugal, president of Health Care Development Services, a Florida-based consulting firm, said he has contacted operators of many hospital-based labs. Most are not participating in PAMA, he noted. “Everyone with whom I have spoken has said they do not plan to participate in the PAMA data collection process because their hospital laboratory does not meet the definition of an applicable lab,” Portugal explained. For more in-depth coverage of this and other issues concerning PAMA see the September issue of G2 Compliance Advisor.