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OIG Surveys How CMS is Doing on PAMA Implementation

by | Oct 28, 2016 | CMS-nir, Essential, Fee Schedules-nir, National Lab Reporter, Reimbursement-nir

With D-day set for Jan. 1, 2018 for implementation of a new payment methodology for lab services under the Protecting Access to Medicare Act of 2014 (PAMA), the Office of Inspector General (OIG) just issued a report documenting the progress the Centers for Medicare and Medicaid Services (CMS) is making in implementing the different aspects of the new payment system. Here is what lab managers need to know about the report to keep on top of their own PAMA implementation efforts. What CMS Has Done So Far CMS has already reached a few of the most important implementation milestones: In December, it completed the IT system that labs will use to report their private payer data; and on June 17, 2017, it issued the final rule. And as we reported last month (see NIR, Sept. 29, 2016, p. 2), CMS has since issued guidance materials, including: the HCPCS reporting codes; guidance for collecting and reporting private payer data; and the data reporting template. CMS’ 6 Implementation Tasks and the Progress Being Made The OIG report explains each of CMS’ "tasks" it must complete and describes the progress CMS has made on each one, as summarized by the chart below. PAMA […]

With D-day set for Jan. 1, 2018 for implementation of a new payment methodology for lab services under the Protecting Access to Medicare Act of 2014 (PAMA), the Office of Inspector General (OIG) just issued a report documenting the progress the Centers for Medicare and Medicaid Services (CMS) is making in implementing the different aspects of the new payment system. Here is what lab managers need to know about the report to keep on top of their own PAMA implementation efforts.

What CMS Has Done So Far
CMS has already reached a few of the most important implementation milestones: In December, it completed the IT system that labs will use to report their private payer data; and on June 17, 2017, it issued the final rule. And as we reported last month (see NIR, Sept. 29, 2016, p. 2), CMS has since issued guidance materials, including: the HCPCS reporting codes; guidance for collecting and reporting private payer data; and the data reporting template.

CMS' 6 Implementation Tasks and the Progress Being Made
The OIG report explains each of CMS' "tasks" it must complete and describes the progress CMS has made on each one, as summarized by the chart below.

PAMA Briefing: Current Status of Part B Payment Changes
Implementation Final Implementation Deadline: Jan. 1, 2018

Task Status What CMS Has Done What CMS Still Must Do
1. Issue final rule and lab industry guidance Almost complete
  • ƒƒJune 17, 2016: Final rule issued
  • Issued guidance on data reporting procedures and requirements
  • By January 2017: issue guidance on process for labs to apply to have a test designated as an ADLT
  • Determine if additional regulations or guidance is needed
2. Establish and consult with advisory panel Complete
  • April 2015: Panel created
  • 2015-2016: Panel met four times
  • Panel has formed 2 subcommittees:
    • One advises CMS on payments for automated "profile" tests
    • Other advises on ADLT application process
  • Through April 2017: Continue to receive and consider recommendations of panel and subcommittees
3. Collect private payer data reported by labs Significant progress
  • ƒƒƒƒDecember 2015: Completed building of data collection system used by labs to report private payer data
  • Testing of data collection system user experience, security and capacity partially completed—stress testing of user capacity hindered due to limitations of CMS's Presentation Zone
  • ƒƒFinish testing of data collection system user experience
  • October 2016: Independent validation of system
  • October 2016: Data collection system to be made available for labs to begin registering
  • By January 2017: Finish educating labs about reporting requirements
  • January 2017: Reporting begins
  • January to March 2017: Collect first set of labs' private payer data
4. Ensure accuracy and completeness of reported data In progress
  • Creation of preliminary plans to conduct checks in midto late 2017 after labs submit first round of data
  • Automated data verification and certification features incorporated into CLFS module
  • April to August 2017: Conduct checks on first round of data labs submit
  • September 2017: Publish pricing and volume data
  • Starting September 2017: Seek public input on accuracy of preliminary Medicare payment rates
  • CMS does not plan to independently verify whether all applicable labs submit their private payer data as required or the accuracy and completeness of the data of the labs that do report their data—Result: Risk of inaccurate payment rates
5. Determine and publish new Medicare payment rates In progress
  • ƒƒCapacity to calculate new rates from data labs report incorporated into data collection system
  • Early 2017: Collect data reported by labs
  • Calculate Medicare payment rates from data
  • November 2017: Publish the new payment rates
  • January 2018: New payment rates take effect
6. Identify ADLTs In progress
  • June 2016: Publication of criteria for test to qualify as ADLT (as part of final rule)
  • July 2016: Advisory panel subcommittee recommends ADLT application procedure
  • By January 2017: Decide and issue guidance describing ADLT application procedure
  • Thereafter: Review applications and decide whether tests qualify as ADLTs

Takeaway: 5 Things Labs Should Be Doing to Get Ready for PAMA
At this point, there are five things labs should be doing to get ready for the new Medicare Part B lab test payment system:

  1. Familiarizing themselves with the Final PAMA Rule;
  2. Getting ready to register on the CMS's new data collection system when registration begins;
  3. Looking out for the two sets of materials CMS intends to release by year's end before reporting begins on Jan. 1, 2017:
    • Educational materials explaining the payer data reporting process; and
    • Guidance explaining the process to follow when applying to have CMS designate a test as an ADLT;
  4. Preparing for the release of the preliminary lab test fee schedule in September 2017 and, if warranted, providing feedback on its accuracy; and
  5. Being on the lookout for the final PAMA fee schedule which CMS intends to issue in November 2017.

Takeaway: As the deadline for full implementation of PAMA draws near, the OIG indicates CMS and labs still have much to do.

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