PAMA-geddon: Lab Industry Goes to Court to Stop 2018 Medicare Fee Schedule

With CMS refusing to back down, the lab industry has escalated the dispute and asked a U.S. District Court to step in and prevent enforcement of the 2018 PAMA-inspired Part B Clinical Lab Fee Schedule (CLFS).

The Claims
The Dec. 11 lawsuit filed by the American Clinical Laboratory Association asserts three basic claims:

1. CMS exceeded its PAMA statutory authority to determine market prices by deliberately excluding hospital labs, which represent the vast majority of the lab market;
2. Not counting hospital labs was an unreasonable interpretation of PAMA—specifically the term "applicable laboratories"; and
3. The CMS pricing formula is "arbitrary, capricious" and an "abuse of discretion."

What ACLA Wants the Court to Do
Rather than award money damages, the ACLA wants the court to take injunctive action to resolve the problem by:

• Barring CMS from putting the 2018 CLFS into effect; and
• Ordering CMS to obey PAMA by revising its pricing formula to include hospital labs as "applicable laboratories" for purposes of calculating market rates.