4
6
certain tests together to increase
their reimbursements. CMS may
stop this at some point
but as of now this is
Category
Total Labs
No. Required
No. Actually
% Reported
allowed and a change
to Report
Reported
in current billing
Independent Labs
3,211
1,398
658
20.5%
practices and result in
POLs
235,928
11,928
1,106
0.5%
increases for some
laboratories.
Hospital Labs
6,994
0
21
0.3%
The Expected
Total
246,133
12,547
1,785
0.7%
Impact of PAMA
With clinical
PAMA Overview
To be considered an ADLT, a test
laboratories facing Medicare cuts of
• ALL Part B Medicare fee for
must be performed by a single
up to 30% over the next 3 years
service lab billings are subject to
laboratory and either:
under the new CMS fee schedule, the
• Be approved by the FDA, or
pricing determined by PAMA,
laboratories most likely to survive the
• Be a test that:
even if the laboratory was not
cuts are those that are operationally
•
required to participate in the
Evaluates a patient’s DNA,
efficient, financially fit, and
reporting effort. This includes the
RNA, or proteins
strategically diversified, according to
• Provides new clinical
99% of hospital outreach and
experts. As labs now see the 2018
physician office laboratories that
diagnostic information that
rates reflected in their books, the real
did not report under PAMA.
cannot be obtained from any
effects of the Protecting Access to
• CMS now estimates the new fee
other diagnostic test(s)
Medicare Act (PAMA) is coming into
• Uses a unique algorithm that
schedule prices will save Medicare
sharp relief.
Part B $670M in 2018 alone,
predicts the chance of a
Small to Medium sized
nearly double the original OIG
patient developing a condition Laboratories serving Large
estimate of $390M in fee cuts.
or responding to a treatment.
Medicare Populations
• While CLFS prices were cut
New ADLTs will be paid the actual
Laboratories that have not
nearly 30% overall, yearly caps
list charge for the first 3 quarters after maximized their efficiencies are
are in place for each test, leading
being introduced. After the initial
going to face a rough road ahead.
to a potential total cut of 75%
period is over, payment for a new
“There’s going to be a lot of pain,”
across six years for those tests that ADLT will be based on the weighted said Dennis Weissman, president of
yielded market rates greatly below median private payer rate, like all
Dennis Weissman and Associates in
the 2017 CLFS rates.
other tests on the fee schedule.
Washington, D.C. Hardest hit will
• Molecular and Genetic tests be laboratories that serve nursing
a. 2018 - 2020: Cap at 10%
from the prior year
that are not ADLT’s are also
homes and receive the bulk of their
b. 2021 - 2023: Cap at 15%
seeing increases in
laboratory testing payment from
from the prior year Reported
reimbursements because private
Medicare and Medicaid, he added,
PAMA data is skewed lower
payers were paying these tests at a noting that many of these labs will
significantly higher rate than
than actual market rates.
not survive.
• 10% of codes on the CLFS will
Medicare was in 2017.
PAMA’s reimbursement cuts are
• Automated Test Panels
increase.
considered by industry experts to
Exceptions to the PAMA CLFS
(ATP): ATP’s are when certain
have potentially devastating effects,
Price Cuts
laboratories will run multiple
particularly for small-to mid-size
• Advanced Diagnostic
chemistry tests on a single sample community and regional labs,
Laboratory Tests (ADLT)
and then “stack” the billing codes physician’s office labs, and rural and
PAMA created this new category of
to Medicare. This may allow
community hospitals. The National
lab tests. Tests that meet the ADLT
larger laboratories with
Independent Laboratory Association
criteria will have separate pricing that
automated equipment to group
(NILA) reports that some of its
ONLY 0.7% OF US LABS
SUBMITTED DATA:
requires reporting of payer
reimbursements annually.
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