The recent passage of a funding bill for Health and Human Services (HHS) delays until January 2027 the implementation of a payment reduction of up to 15% for approximately 800 lab services.
This allows the industry more time to seek reform of reimbursement provisions under the existing Protecting Access to Medicare Act (PAMA) of 2014. PAMA intended to update the Medicare Clinical Laboratory Fee Schedule (CLFS) to create competitive market-based laboratory testing prices and changed the way Medicare calculates the CLFS, resulting in reductions of 10% each year for many lab tests for the years of 2018, 2019, and 2020. PAMA’s flawed methodology has threatened the future of organizations offering clinical laboratory services.
The American Clinical Laboratory Association (ACLA), an industry trade group, will use the time gained by the extension to continue its work to establish a sustainable Medicare pricing methodology for laboratory services. The Reforming and Enhancing Sustainable Updates to Laboratory Testing Services (RESULTS) Act replaced previous efforts to correct flaws in the PAMA reimbursement provisions. It has bipartisan and bicameral Congressional support, as well as widespread industry backing, but action must be taken this year in order to avoid the drastic cuts in 2027.
A fact sheet on the ACLA website states the RESULTS Act will:
- Give CMS access to comprehensive private payor data that is representative of payments received by hospital outreach, independent, and physician office laboratories.
- Dramatically reduce administrative burden on clinical laboratories and CMS.
- Set annual “guardrails” to protect against destabilizing decreases in CLFS rates.
- Exclude non-market based rates from CLFS rate calculations. The RESULTS Act would exclude Medicaid managed care rates from CLFS rate calculations, as they are not truly market-based rates.
- Extend the time between data collection periods from three years to four.
The website Stop Lab Cuts provides further information about the potential impact of the RESULTS Act, along with a “Take Action” form to communicate with members of Congress.
Liz Hansard, CPC, COC, Vice President of Pathology for MSN Healthcare Solutions, stated “We are relieved the delay in implementation gains us a year to work on passage of a more realistic payment methodology but the situation is still threatening. Each year our laboratories face rising operational costs in an environment of payment reductions and that is unsustainable. MSN will continue to monitor progress and provide updates as they are available.”
