COVID-19 Relief Bill Defers 2021 Medicare Part B Lab Test Price Cuts for One Year

The $2 trillion COVID-19 relief bill, CARES (Coronavirus Aid, Relief and Economic Security Act), provides for free coronavirus testing without adequately compensating the labs who perform the tests. But it’s also not totally devoid of financial relief, including a badly needed—albeit temporary—respite from the next round of PAMA Part B lab test price cuts.

Labs Shortshrifted on Immediate, Direct Relief . . .

 Under CARES, insurers must pay for COVID-19 tests without imposing cost sharing charges. And with patients out of the picture, payors will seek to alleviate their costs out by reducing reimbursement to testing labs. This leaves labs in what the American Clinical Laboratory Association describes as “an untenable situation, absorbing growing, uncompensated costs for testing specimens with no assurance that they will be appropriately or fairly reimbursed for all the tests they are performing.”

Regrettably, CARES doesn’t do much to alleviate this situation. Instead of the $5 billion the industry requested for direct support, testing labs will have to get what they can from the allocated $100 billion for hospitals, $11 billion for diagnostics, treatments and vaccines and $16 billion for the Strategic National Stockpile via the Public Health and Social Services Emergency Fund.

. . . But Get a Bit of Relief from PAMA

 To make up for the relative lack of direct financial support, CARES provides labs a bit of relief on the PAMA front. In 2021, the reduction cap, i.e., maximum amount by which CMS could reimbursement for Medicare Part B lab tests was scheduled to rise to 15% in 2021. But CARES puts the cap rise and resulting reimbursement cuts on hold for one year. And given how the political tide had been turning in the lab industry’s favor before the COVID-19 crisis, that extra year may prove extremely valuable down the road.