Congress Lobbies CMS on PAMA Regulations

Since mid-December members of the House of Representatives and the Senate have sent letters to Centers for Medicare & Medicaid Services (CMS) imploring it to delay and make significant changes to the implementation of the Protecting Access to Medicare Act (PAMA). Their missives echo demands being made by the laboratory sector as a whole.

CMS issued proposed regulations for the implementation of PAMA in the second half of last year, and the laboratory sector vigorously lobbied to make significant changes in the final regulations. Final PAMA rules were initially expected to be issued by CMS late last year, but it has yet to issue them. The agency issued proposed rules in October, and accepted more than 1,000 comments during the public comment period. (See the December 2015 issue of National Intelligence Report for discussion of industry comments). CMS is legally required to finalize the rules by June 30.

On Dec. 14, 2015, 19 U.S. Senators signed a letter to Andy Slavitt, acting CMS administrator expressing their concern "that the proposed rule and implementation timeline impose a significant burden on clinical laboratories across the country and may threaten access to clinical laboratory services for Medicare beneficiaries." The Senators requested CMS delay implementation and "engage in constructive dialogue with stakeholders." Their objections to the proposed rule included a lack of necessary information and a reasonable time frame that will facilitate laboratories' compliance with reporting requirements, exclusion of a "significant part of the laboratory market," and the definition of Advanced Diagnostic Laboratory Tests (ADLTs). They argued that the "unrealistic" initial reporting deadlines "risk[] unduly rushed data collection that could lead to inaccurate rate setting." Finally, the Senators criticized a lack of "transparency and clarity" in the reporting system that leaves labs with no understanding of how new rates are calculated.

The House of Representatives followed up a few days later with a letter on Dec. 16, signed by 44 members, both Republicans and Democrats. That letter also noted that a "number of laboratories are prohibited from participating in the reporting process. We are deeply concerned that this prohibition will skew the market data, resulting in Medicare rates that are not reflective of true market prices." Instead, the members asked that CMS implement a "more inclusive approach to determining which laboratories should report data and to allow any laboratory to voluntarily report data."

While neither the House or Senate letters specify which labs are being excluded, the laboratory sector has expressed concern to CMS that the exclusion of hospital-based laboratories—which tend to be paid at higher rates than standalone labs—would dramatically ratchet down Medicare reimbursements. Under PAMA, laboratories receiving at least $50,000 annually in payments through the Clinical Laboratory Fee Schedule would have to submit payment data for evaluation.

The House members also asked CMS to expand its definition of an ADLT to include protein biomarkers, which it said had been inexplicably excluded from the proposed regulations. Laboratory lobbies have also asked that protein biomarkers be included.

"Protein-based diagnostics are being used to make clinical decisions regarding patient care today, and encouraging further development in this area is crucial," the House letter said.

In addition to expressing this concern, the House members also emphasized the need for more flexibility regarding the reporting deadlines for data, which under the proposed guidelines could begin as soon as this month. "The proposed timeline presents a significant challenge to the laboratory community as it provides little time to prepare, certify and submit upwards of millions of data points based on a yet-to-be released set of agency requirements," they wrote. The lab sector has also asked that deadlines for gathering and reporting data be set back, possibly into 2017.

"This Dear Colleague letter vigorously illustrates that the proposed timeline for reporting data and pricing will result in skewed data and Medicare rates that do not reflect the market," American Clinical Laboratory Association (ACLA) President Alan Mertz said in a statement, regarding the Dec. 16 letter. "This strong, bipartisan statement is in alignment with the position of clinical lab community, strongly urging CMS to delay implementation of the PAMA CLFS reforms until improvements can be made, not only to protect access to clinical laboratory services for Medicare beneficiaries, but also to ensure continued diagnostic innovation."

Most recently, Chairman of the Senate Committee on Finance, Orrin Hatch, and Ranking Member Ron Wyden issued their own letter to Slavitt on Jan. 6, 2016. Reiterating the criticisms expressed in the House and Senate letters, Hatch and Wyden provided more specific objections and detailed suggestions. They criticized use of Tax Identification Numbers to identify reporting laboratories saying it was "too limiting" and would exclude "important segments of the laboratory market, especially hospital outreach laboratories," which they note serve beneficiaries and compete with community-based labs. Instead, they suggest Clinical Laboratory Improvement Act numbers be used to identify reporting labs, while maintaining the $50,000 annual revenue threshold. Like the other letters, Hatch's and Wyden's comments also criticize the reporting timelines as "particularly unrealistic given that a final rule containing the information that laboratories will need to report has yet to be published."

ACLA praised the Senators' leadership in sending the letter and referenced their request to include outreach laboratories, with Mertz commenting in a statement: "It is clearly the intent of Congress that the entire clinical laboratory community report payment rates, including independent, physician, and hospital outreach laboratories. Leaving out major segments of the market, as the proposed CMS rule does, will only skew the data and lead to a misrepresentation of payment rates in the marketplace." Similarly, the National Independent Laboratory Association (NILA) also lauded the Senate leaders for their letter and claimed "The Hatch/Wyden letter came as a result of NILA's aggressive advocacy efforts, including grassroots outreach to the Senate Finance leaders, persuading them to press CMS that the timing of the PAMA rule is impossible and CMS's proposed methodology violates the statute."

As the efforts to resolve objections to PAMA continue, the industry waits for CMS to issue a final rule.

Takeaway: Members of Congress have been recruited to voice the concerns of the laboratory sector to CMS regarding the proposed PAMA regulations.