2023 PAMA Reporting and Required Cuts Delayed Until 2024
- The next PAMA data reporting period is January 1, 2024 through March 31, 2024, and will be based on the original data collection period of January 1, 2019 through June 30, 2019.
- For CY 2023 there is a 0.0% reduction in clinical diagnostic laboratory test reimbursement rates.
- The statutory phase-in of the payment reduction cap is extended through 2026. Payment may not be reduced by more than 15% for CY 2024, 2025, 2026.
Year for CDLT Rates | Based on Data Collection Period | Based on Data Reporting Period | Reduction Cap |
2023 | 2016 | 2017 | 0.00% |
2024 | 2016 | 2017 | 15% |
2025 | 2019 | 2024 | 15% |
2026 | 2019 | 2024 | 15% |
While the Saving Access to Laboratory Services Act (SALSA) was not passed, the ACLA praised the Stop Lab Cuts campaign for helped secure a one-year reprieve from PAMA payment cuts and reporting requirements that would have gone into effect January 2023.
“ACLA is grateful to Senators Sherrod Brown and Richard Burr, and Representatives Bill Pascrell, Scott Peters, Richard Hudson, Gus Bilirakis, and Kurt Schrader, the bipartisan champions of the Saving Access to Laboratory Services Act (SALSA), who ensured temporary relief from cuts and reporting was included in the Omnibus. We look forward to working with returning SALSA champions to carry forward the strong support for SALSA this year to advance a long-term PAMA fix in 2023.”
Introduction of SALSA Seeks to Set Medicare Reimbursement Back on A Sustainable Path
New legislation called the Saving Access to Laboratory Service Act (SALSA) stands to make major permanent modifications to PAMA requirements related to determining the Medicare Clinical Laboratory Fee Schedule (CLFS) lab testing rates. There is hope that SALSA can get passed as part of the larger end-of-year Medicare spending package making it critical for lobbying efforts to happen now.
Key Provisions of SALSA:
CMS Required to Use Statistically Representative Samples
Requiring CMS to use a statistically representative sample of private payor rates from the laboratory market to determine clinical lab test rates. The maximal brewer selection method, as described in the June 2021 Medicare Payment Access Commission Report will be used to establish a statistically valid sample. Sampling would also reduce the reporting burden by requiring fewer laboratories to report.
ADLTs to Remain Under Current PAMA Requirements
Reporting on widely-available laboratory tests, defined as tests with reimbursement rates on the clinical lab fee schedule under $1,000 and offered by more than 100 laboratories. ADLTs are non-widely available tests and will remain under current PAMA requirements. An ADLT is a test only offered by a single lab.
Removal of the “Majority of Medicare Revenues” Definition
Removing the “Majority of Medicare Revenues” definition, which described applicable laboratories as laboratories that receive at least $12,500 in payments under this section during the first 6 months of the calendar year immediately preceding the applicable data collection period.
Time Between Data Collection Periods Changes
Increasing the length of time between data collection periods to four years (currently three years) with the first reporting period in 2026 on 2025 data.
Lower Annual Reduction Rate Cuts
Freezing the CLFS in 2023 and lowering the cap on annual reduction rate cuts to 2.5% in 2024 and to 5% in 2025 and each subsequent year.
CLFS Rates to Reflect the Market
Excluding Medicaid managed care rates and physically mailed remittances if these remittances do not exceed more than 10% of the lab’s claims, from required reporting. Changing the definition of “applicable information” required for reporting would help ensure the CLFS rates are more reflective of the market and ease the significant reporting burden.
Clinical Diagnostic Laboratory Test Rates Under PAMA Versus SALSA
2022 PAMA Reporting Requirements and Reimbursement Cuts Impacting Hospital and Independent Labs Delayed to 2023
PAMA reporting has once again been delayed; applicable laboratories (including hospital outreach laboratories) need to now plan for 2023 PAMA reporting requirements and payment cuts.
Between January 1, 2023 and March 31, 2023, applicable labs are required to report on data collected during January 1, 2019 and June 30, 2019. This data will be utilized to determine 2024 to 2026 CLFS rates. Data collection is scheduled to occur on a three-year cycle, however in 2020 the LAB Act delayed PAMA reporting to 2021, in 2021 the CARES Act delayed PAMA reporting until 2022, and in 2021 Congress voted for another one-year delay.
While hospital-based outreach laboratories were impacted by the 10% CLFS cut between 2019 and 2020, the flawed definition of an applicable laboratory in the original legislation excluded most hospital laboratories from the 2017 round one data reporting requirement.
Under the updated definition of an applicable laboratory, established in 2019, most hospital-based outreach laboratories will be required to report.
Updated Clinical Diagnostic Laboratory Test (CDLT) Rates Schedule
Year for CDLT Rates | Based on Data Collection Period | Based on Data Reporting Period | Reduction Cap |
---|---|---|---|
2020 | January 1, 2016 – June 30, 2016 | January 1, 2017 – May 30, 2017 | 10% |
2021 | January 1, 2016 – June 30, 2016 | January 1, 2017 – May 30, 2017 | 0.0% |
2022 | January 1, 2016 – June 30, 2016 | January 1, 2017 – May 30, 2017 | 0.0% |
2023 | January 1, 2016 – June 30, 2016 | January 1, 2017 – May 30, 2017 | 15% |
2024 | January 1, 2019 – June 30, 2019 | January 1, 2023 – March 21, 2023 | 15% |
2025 | January 1, 2019 – June 30, 2019 | January 1, 2023 – March 21, 2023 | 15% |
2026 | January 1, 2019 – June 30, 2019 | January 1, 2023 – March 21, 2023 | N/A |
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, 2023 – March 31, 2023: Labs will report the private payor amounts and volumes to CMS that was collected for period Jan-Jun 2019.
- 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.
PAMA 2019 Strategies Moving Forward
Now that the next data collection and reporting round is underway, make sure your laboratory is ready
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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.
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'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.
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.