ACLA Goes for Knockout Punch in PAMA Lawsuit

Case: Having survived a first-round setback, the American Clinical Laboratory Association (ACLA) went back on the offensive asking a federal court to strike down CMS’ scheme for implementing PAMA’s market-based prices for lab tests as “unreasonable” and contrary to the intent and terms of the statute. The agency’s decision to exclude hospital labs from data collection resulted in artificially low prices that don’t reflect true market rates, the ACLA contends. Consequently, some labs “face a serious threat of being forced out of business, others are being forced to scale back essential services, and patients are being deprived of the services they need.”

Significance: The court challenge is, in some ways, just a sideshow in the lab industry’s campaign for PAMA pricing relief. If ACLA prevails on the summary judgment motion, CMS would probably appeal to the federal circuit court, just the way ACLA did last year when the roles were reversed and CMS won on summary judgment. A decisive litigation outcome would probably require years, and perhaps a Supreme Court ruling. Chances are, the issue will be decided way before then via negotiation and compromise. And if CMS doesn’t relent on the regulatory front, there’s also the possibility that Congress will intervene by enacting new pricing legislation. The real significance of the court case is in how it affects leverage. Thus, winning on summary judgment would put the ACLA and lab industry in a much stronger bargaining position. (For more on the PAMA court challenge, see Lab Compliance Advisor (LCA), Sept. 10, 2019.)