ACLA, AHA Submit Comments to CMS Regarding PAMA Final Rules

The laboratory and hospital sector's primary lobbies have submitted comments to the Centers for Medicare & Medicaid Services prior to the agency finalizing regulations for the Protecting Access to Medicare Act (PAMA).

Both the American Clinical Laboratory Association and the American Hospital Association (AHA) are particularly concerned regarding which laboratories will be included in the rate-setting methodology, which is intended to create more parity among Medicare and private payer rates. The Office of Management and Budget has concluded that moving closer to commercial rate parity would save the Medicare program as much as $360 million for fiscal 2017 and as much as $5 billion over the next decade.

Final rules for PAMA were supposed to have been issued by the end of this year, but the consensus is that CMS likely will not issue them until at least early 2016.

Under PAMA, laboratories receiving at least $50,000 annually in payments through the Clinical Laboratory Fee Schedule would have to submit payment data next year. But under the current proposal, most hospital laboratories would be excluded from reporting. This has raised concerns from both the lab and hospital sector because hospital-based labs are generally paid at higher rates than standalone facilities.

In its comments, the ACLA noted that one-quarter of Part B payments made by the Medicare program were payments to hospital-based labs.

"The proposed rule's definition of 'applicable laboratory' would exclude much of the laboratory market in reporting pricing, and is at odds with both the statutory language and Congressional intent," said ACLA President Alan Mertz in a statement. "This flawed definition will result in skewed data and Medicare rates that do not reflect the market."

The AHA, which represents a large majority of the nation's 4,000-odd not-for-profit hospitals and hospital systems, was similarly troubled.

"We are concerned that the new CLFS rates would not be representative of overall market rates. This would cause hospitals to see precipitous declines in Medicare payments for laboratory services, which could harm patient access to laboratory testing in many communities," said the letter, which was addressed to CMS Acting Administrator Andrew Slavitt and penned by AHA Executive Vice President Thomas P. Nickels. "Specifically, while payments for most hospital laboratory tests furnished to Medicare beneficiaries are packaged into their inpatient and outpatient prospective payment systems rates, reimbursement for community outreach testing services is made under the CLFS."

ACLA also asked CMS to change its definition of an advanced diagnostic laboratory test (ADLT) to include protein biomarkers. The AHA asked for relaxation of some of the proposed ADLT guidelines in order for more hospital labs to be able to claim their own ADLTs.

Both the ACLA and AHA asked the CMS to curb the issuance of unique billing codes for any ADLT or an FDA-cleared test in order to keep billing issues to a minimum. ACLA also asked that most dialysis labs be excluded from reporting, since few receive revenue under the CLFS.

CMS was also asked by ACLA to lengthen its timetable for the collection and reporting of data, with the new pricing regime not being put into place until 2018.

Takeaway: Despite PAMA's final rules being close to finalized, the Centers for Medicare & Medicaid Services continues to be intensely lobbied by both the laboratory and hospital sectors.