Labs to CMS: Push Back PAMA & Add Hospital Labs to CLFS Mix

The lab industry continues to wait nervously for word from CMS regarding PAMA.

Demand 1: Fix the Fee Schedule Methodology
The industry's paramount concern remains the formula CMS proposes to use to calculate market rates for lab tests in setting the Clinical Laboratory Fee Schedule (CLFS) under PAMA, specifically the omission of hospital outreach labs from the definition of "applicable labs." In addition to pressing CMS, representatives of the American Clinical Laboratory Association (ACLA) met with members of Congress last month to "reiterate our belief that the current PAMA regulation effectively excludes hospital outreach labs, which are a significant segment of the laboratory marketplace."

The big labs have made it clear that they are fully behind the ACLA's lobbying efforts. In a conference call following the release of its recent earnings report, Quest President and CEO Steve Rusckowski stated that "while we support reform of the Medicare payment system, we believe any modification should be market-based and appropriately include all applicable independent and hospital outreach laboratories." Meanwhile, LabCorp Chairman and CEO David King complained that the current dataset CMS is reviewing in establishing CLFS reimbursement rates as part of the PAMA process represents only 5 percent of hospital lab-based testing volume.

Demand 2: Delay PAMA Implementation
Meanwhile, the industry wants CMS to postpone the new PAMA-based CLFS pending resolution of the "applicable labs" issue. The ACLA has asked the agency to delay CLFS implementation for at least 6 months. Quest's Rusckowski also indicated that he is recommending that CMS publish the new CLFS no earlier than July 1, 2018.