Association Representatives Say PAMA is #1 Concern for Lab Industry

In the kick-off event of G2 Intelligence’s 2017 Laboratory Institute (Washington D.C.; Oct. 25-27), representatives of the biggest laboratory-related associations shared their top priorities, which could be summed up in one word—PAMA.

The panel was unanimous in their belief that the draft 2018 Medicare reimbursement rates for clinical laboratory testing under the Protecting Access to Medicare Act (PAMA), if implemented on Jan. 1, 2018, will have devastating consequences for the laboratory industry. With wide agreement from attendees, the panelists explained the proposed rates were “not market-based” and do not reflect the cost or the value of performing clinical lab services. They described the methodology used to determine the rates as “flawed” and called for a delay in implementation and reform of the methods to calculate reimbursement rates by utilizing data reflective of the entire laboratory market, including hospital outreach laboratories, which were notoriously excluded.

The panel consisted of Julie Khani, president of the American Clinical Laboratory Association (ACLA); Vince Stine, Ph.D., director of Government Affairs for American Association for Clinical Chemistry; Julie Scott Allen, from the National Independent Laboratory Association; and John H. Scott, vice president of policy and advocacy for College of American Pathologists. Pictured left to right are Allen, Stine and Khani.

Khani said the draft PAMA rates were not reflective of Congress’ intent to tie reimbursement to market rates. She said that while ACLA did initially support development of a market-based fee schedule that would provide predictability and rationality for payment of laboratory services, the draft is “not anywhere close” to what was promised. She said only 2,000 or so of the anticipated 12,500 laboratories expected to report, in fact contributed data. Only 1 percent of reported data came from hospital outreach laboratories, even though they account for 24 percent of Medicare laboratory spending. In addition to flawed methods, Khani says the integrity of the data used to calculate the rates is also questionable. She cited prices for a basic metabolic panel ranging from one cent to $24,000 and that there were millions of entries for tests costing nothing.

Allen warned of potentially “great consolidation” in the laboratory industry if PAMA is implemented as is. She added that while the consequences are predicted to be catastrophic if PAMA is implemented, it is not just against the laboratory’s interests to implement PAMA but that there will be serious, negative consequences for patients. She predicts that the downstream effects of PAMA implementation include creating severe disruptions in access to laboratory services, particularly for the most vulnerable populations including those in nursing homes and in rural and other low-access areas.

The panelists urged attendees to actively engage in efforts to stop the implementation of PAMA by calling Congress and telling lawmakers how devastating PAMA would be for the industry, local economies, and patients.