Keys to Countering PAMA

The second round of PAMA cuts are projected to cut individual test payment rates by up to 15%. With this in mind, now is the time that labs should be looking to market trends and strategies in order to prosper. At  the NYSCLA Annual Meeting this year XIFIN CEO and Executive Chairman gave a presentation on strategies to offset PAMA cuts.

Here are the most important keys to mitigate future price cuts:

Solid Reporting:

  • Report on actual collections versus expected
  • Validate accuracy of payments
  • Optimize appeals activity to avoid reporting under payments

Contracting at a Percentage of Medicare:

  • Eliminate contracts tied to CLFS in favor of market based contracts that are percentage of billed or CPT based contracts that reflect a cost basis
  • Contracts tied to CLFS that cannot be eliminated should be fixed to 2017 CLFS

Contracting Without Consideration to the Market Value of Testing:

  • Calculate the fully loaded and incremental cost for each lab test (RVUs as guideline)
  • Establish a standard fee schedule proportionally aligned with cost
  • Establish a minimum contracting rate for each test that is above payor allowables
  • Identify & Renegotiate Low Pricing/Pricing Below Cost

Patient, Physician, and Payor Engagement

  • Partner with payors to develop appropriate coverage criteria
  • Active engagement in optimizing physician’s diagnostic orders and therapy decisions
  • Pricing transparency with patients

PAMA is going to have an effect on labs all over the country but that does not mean you can’t come up with strategies to offset these cuts and continue to increase revenues.

Want to learn more about PAMA and how to combat it? View Lâle Whites full presentation slides above and download our Executives Guide to PAMA Impact to learn about the financial ramification of the PAMA exercise and resultant CLFS.

Published by XiFin
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