PAMA Headquarters
PAMA: Strategies Moving Forward
Now that the second data collection and reporting round is underway, make sure your laboratory is ready
Get the Guide!NEW in 2020! CARES Act Further Delays PAMA Reporting
Buried in the Coronavirus Aid, Relief, and Economic Security (CARES) Act are provisions that affect how clinical laboratories will be paid by Medicare in the coming years:
CARES Act delays when applicable laboratories (including hospital outreach laboratories) must report private payor data for PAMA. Under the CARES Act, the next reporting period will be January 1, 2022 to March 31, 2022. This reporting period will be based on the original data collection period of January 1, 2019 through June 30, 2019.
Previously, up until the end of 2019, all applicable laboratories were required to collect this data from January 1, 2019, to June 30, 2019, and report the data to CMS during the period of January 1, 2020, to March 31, 2020. However, with Congress passing the Laboratory Access for Beneficiaries (LAB) Act as part of an end-of-year spending package at the end of 2019, PAMA reporting requirements were delayed for 1 year until January 1, 2021, to March 31, 2021.
The CARES Act passed in March 2020 further delays the reporting period by an additional year, until January 1, 2022, to March 31, 2022. This means that Medicare payment rates determined by data reported in 2017 will continue through December 31, 2022.
The CARES Act also delays the 15% further cuts dictated by PAMA, that were to become effective January 1, 2021. Medicare Clinical Laboratory Fee Schedule reimbursement amounts will not be further cut in 2021, but the 15% cuts will go into effect January 1, 2022.
After the next data reporting period, there is a three-year data reporting cycle for CDLTs that are not ADLTs, (that is 2025, 2028, etc.). The statutory phase-in of payment reductions resulting from private payor rate implementation is extended, that is, through CY 2024. There is a 0.0 percent reduction for CY 2021, and payment may not be reduced by more than 15 percent for CYs 2022 through 2024.
See CMS MLN document dated September 24, 2020, for more information.
Visit the XIFIN COVID-19 Resource Center for more information on the CARES Act.
Ugly Truth about Payers and PAMA: XIFIN's Lâle White Speaks at Executive War College 2019
What Labs Can Expect and How to Respond
Executive War College May 1, 2019
REVISED PAMA Schedule
Under the final rule:
- January 1, 2016 – June 30, 2016: Labs collected the private payor amounts and volumes for all their tests.
- January 1, 2017 – May 30, 2017: Labs reported the private payor amounts and volumes to CMS.
- Late Summer/Early Fall: CMS published the draft 2018 Medicare rates.
- January 1, 2018 – December 31, 2020: New Medicare rates in effect. Rates are equal to the median weighted private payor’s rate (limited to a -10% year-over-year decline).
- January 1, 2019 – June 30, 2019: Round 2 - Labs collect the private payor amounts and volumes for their tests.
- January 1,
20202022 – March 31,20202022: Labs will report the private payor amounts and volumes to CMS that was collected for period Jan-Jun 2019. January 1, 2021 – December 31, 2023: New Medicare rates go into effect. Rates are equal to the weighted median private payor’s rate (limited to a -15% year-over-year decline). After the next data reporting period, there is a three-year data reporting cycle for CDLTs that are not ADLTs, (that is 2025, 2028, etc.)- The data collection and reporting periods will repeat every three years indefinitely.

WEBINAR: Hospital Outreach Labs—PAMA Has Come to Your Door
PAMA for Hospital Outreach: What You Need to Know and Do NOW!
Hear from XIFIN's Executive Chairman and CEO, Lâle White and Financial Analyst, Craig Young in this complimentary webinar as they walk you through what you need to know to prepare, collect, and report.
Watch Now
'The post PAMA world is going to be one where laboratorians need to be directly involved with where their money is going and where it’s coming from. Revenue cycle management represents a key area that needs to be focused on if you’re going to sustain the laboratory business for the long term.'
Liana Romero, PhD, MBA, MT (ASCP)
Senior Director, Strategic Marketing and Clinical Affairs, Siemens Healthineers
XIFIN and PAMA—In the News
Reduce and Minimize the PAMA Impact with XIFIN by Your Side
XIFIN's Revenue Performance Management (RPM) solution is designed to meet the needs of today's margin-challenged diagnostic environment. XIFIN's powerful technology platform meets the high-volume data and transaction needs of laboratories. Deliver optimized billing for maximized revenue with:
PAMA Solution - XIFIN RPM
FAQs
What is 'PAMA'?
PAMA stands for Protecting Access to Medicare Act of 2014 and was published by The White House Office of Management and Budget to modify the Medicare reimbursement rate methodology for lab services. The Final Rule was published on June 17, 2016.
Full details here, https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ClinicalLabFeeSched/PAMA-Regulations.html.
How is PAMA related to the Clinical Laboratory Fee Schedule (CLFS)?
CMS created the CLFS to guarantee the new fee schedule continues to ensure adequate access to lab services for Medicare beneficiaries. But, the pre-PAMA Medicare Clinical Lab Fee Schedule (CLFS) payments were based on 1984 cost data and sometimes updated for inflation. A limited reconsideration process was in place for new tests.
The hope for the new CLFS was that by performing a market-based pricing exercise, pricing could be brought up to date and in-line with current practices.
Does PAMA pricing apply to me?
ALL Part B Medicare FFS lab billings are subject to pricing determined by PAMA, even if the laboratory was not required to participate in the reporting effort.
Does PAMA reporting apply to me?
PAMA reporting requirements apply to any “applicable laboratory.” An applicable laboratory is a laboratory that receives a majority of its Medicare revenue under the CLFS, the Physician Fee Schedule (“PFS”), or the new section 1834A of the Social Security Act, as added by PAMA. Those are:
Hospital Labs:
- Inpatients
- Outpatients
- Non-Patients (“Outreach”)
Physician Office Labs:
- Point of Care/Traditional Tests
- Provider-Performed Microscopy
- Pathologists’ Practices
Independent Labs:
- Standard Tests
- Drug Abuse Testing
- Molecular Diagnostics
The Final Rule defines it as:
- A laboratory, as defined in CLIA, that bills Medicare Part B under its own NPI
- And receives the majority of its Medicare revenue from the PFS or CLFS
- And receives more than $12,500 Medicare revenue from the CLFS in a year
- The $12,500 threshold does not apply to a single laboratory that furnishes an ADLT (but does apply to any CDLTs that the laboratory performs)
What happens if I do not comply?
Submission accuracy will be the responsibility of senior official and penalties could be $10,000 a day per line item.
What role does CMS play in the PAMA regulation?
CMS is involved in the proposal to change payment rates which is linked to Congress passing the first major reform of the Clinical Laboratory Fee Schedule (CLFS) in April 2014─ § 216 of Protecting Access to Medicare Act of 2014 (PAMA).
CMS is needed to develop or clarify definitions of several key terms, determine when private payor rates must be reported and for what timeframe, build a technology platform capable of accepting millions of discrete pieces of data, and establish coding processes for certain new tests.
Why should I care about PAMA?
The PAMA legislation will have a substantial impact on the rates and transform Medicare's payment system for clinical laboratory testing while establishing significant new compliance demands. It also has the potential to impact other payors’ rates, as many private payors and state Medicaid programs base their reimbursement levels on Medicare rates.
Medicare rates for lab services are best determined when payment and volume data reflect true market rates for clinical lab testing.
What information do I need to submit?
PAMA requires laboratories to report private payor rates, excluding price concessions. Every rate paid by every payor for each test on a laboratory's test menu adds up to a lot of data. The applicable information required is:
- Volume of tests paid at each private payor rate
- Include changes in rate during period – volume at rate 1, volume at rate 2
This data is required for each test on test menu, excluding unlisted / NOC codes/CPCS Code. In addition, the reporting entity executive (President, CEO, or CFO, or designee) must attest that data is accurate, complete, and truthful, and meet all the reporting parameters.
To report applicable information, reporting entities must:
-
- Register in the Enterprise Identity Management system (EIDM)
- Request a CLFS submitter or certifier role in the Fee-for-Service Data Collection System
- The CLFS Submitter must be certified in PECOS as a User or Authorized User on the PECOS Medicare Enrollment forms (CLFS submitters must have their name appear within one of the following 855 application forms: A,B,C,I,R).
What do I need to do immediately? How can I prepare?
With the new fee schedule in place and ongoing reporting obligations, it's more important than ever to have a financially grounded revenue cycle management system that gives you the necessary visibility and auditability. You need a system that can capture the following information and aggregate the data into timely buckets:
- Date paid
- Payor / payor type
- Number of tests for each procedure code
- Amount allowed – $ paid by insurer plus patient share of cost
- Contractual rates, where applicable, including volume and other discounts
It is imperative to have a revenue cycle management system that can capture the necessary information, and that has been capturing the information for the capture/reporting periods.
Resources: Industry Webinars
To help you better understand the legislation and what will be required, XIFIN has partnered to create a series of in-depth webinars that help laboratories prepare to comply with the rules and succeed in the new reimbursement environment.
Industry Response
On November 17, 2017, CMS released its final ruling and new clinical laboratory fee schedule reimbursement rates, effective January 1, 2018. On December 11, ACLA filed a lawsuit against the Department of Health and Human Services (HHS), asking the US federal district court to stop HHS from implementing PAMA and halt newly issued lab test prices from going into effect in January until the agency aligns its interpretation of "applicable laboratory" with statutory language and congressional intent. In the lawsuit, ACLA alleged that more than 99.3% of hospitals were prohibited from reporting their market-rate data.
More than 20 other organizations have also urged CMS not to implement the new pricing.
PAMA CLFS Reform As Implemented
PAMA changed the CLFS from a static fee schedule to a fee schedule based on the private market rates of Medicare lab providers. CMS, however, has implemented PAMA in an arbitrary way that ignores Congressional intent and threatens beneficiary access.
PAMA's Intent | PAMA as CMS Implemented | Detail |
Market-based system | CMS cherry-picked highest volume, lowest priced tests in market-place | System neither follows private market make-up nor the Medicare market make-up |
Data from all market segments | Skewed data excluding market segments | Over 99% of laboratories were prohibited from reporting, especially hospital labs |
Predictable and sustainable | Arbitrary and unsustainable | Agency cherry-picked lowest pricing labs to report and arbitrarily applied regulations to the data set, resulting in unpredictable and unsustainably low reimbursement |
Fair and accurate rate-setting | Rate cuts 3-4x greater than government estimates | Top 25 test cut by average of 32%, rural hospital labs cut by average of 28.5% |
Medicare beneficiary access | Beneficiary access threatened | Vulnerable beneficiaries at greatest risk of losing access to laboratory services, including rural, nursing home and home health patients |
ADLT Status
Along with the new guidance, CMS published the actual form that labs are supposed to use when applying for ADLT status. Read this article for an overview and it will also point you to the instructions set out in the application.