Medicare cuts, PAMA reporting suspended until 2023 under new legislation

December 8, 2021

For the second year in a row, Congress has acted to suspend scheduled Medicare cuts in order to provide financial relief to hospitals and providers amid the COVID-19 Public Health Emergency.

Additionally, the legislation calls for next round of Protecting Access to Medicare Act (PAMA) data reporting and associated Clinical Lab Fee Schedule (CLFS) cuts to be delayed one year until 2023. Without the delay, many tests were set to see cuts of up to 15% of 2021 rates.

The deal, which is part of The Protecting Medicare & American Farmers from Sequester Cuts Act, was approved by the Senate Thursday after passing the House Tuesday night. The package essentially averts a 6% cut to Medicare reimbursement for physicians in early 2022.

The bill avoids a 4% statutory cut from the pay-as-you-go (PAYGO) provision, and extends the moratorium on the Medicare payment sequester until April 2022. A separate provision will then temporarily lower the 2% Medicare sequester to 1% from April through June. However, Congress will again need to take action in late 2022 to eliminate these cuts from taking place in 2023.

The package also mitigates the 3.75% payment cut to Medicare Physician Fee Schedule (PFS) payments finalized for calendar year 2022 by implementing a one-year, 3% increase to the PFS conversion factor.

The PAMA reporting delay is now the third labs have experienced since 2020, when they were set to report their 2019 private payer rates for lab tests. Labs will now report their 2019 data during Q1 of 2023. This data will be used by CMS to calculate CLFS rates for 2024-2026.

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