In a victory for clinical labs, Congress and President Trump passed and signed into law the Laboratory Access for Beneficiaries (LAB) Act before the year’s end as part of the 2020 spending bill. The move delays the next reporting cycle for the Protecting Access to Medicare Act (PAMA) to 2021.
The following notice was recently issued by the Medicare Learning Network and is expected to be published in MLN Matters next week:
“For Clinical Diagnostic Laboratory Tests (CDLTs) that are not Advanced Diagnostic Laboratory Tests (ADLTs), the data reporting is delayed by one year. CDLT data that was supposed to be reported between January 1, 2020, and March 31, 2020, must now be reported between January 1, 2021, and March 31, 2021. Labs must report data from the original data collection period of January 1, 2019, through June 30, 2019. Data reporting for these tests will resume on a three-year cycle, beginning in 2024. (Section 105(a)(1) of the Further Consolidated Appropriations Act of 2020 [FCAA]).
In addition, the statutory phase-in provisions are updated. For 2020, the rates for CDLTs that are not ADLTs or new CLDTs may not be reduced by more than 10% of the rates for 2019. There will be a 15% reduction cap for each of 2021, 2022, and 2023. (Section 105(a)(2) of FCAA).”
In short, private payer data for applicable clinical lab tests performed between Jan. 1 to June 30 of 2019 is now expected to be reported to CMS from Jan. 1 to March 30 of 2021, instead of Q1 of 2020 as originally called for.
New payment rates derived from this data will be expected to take effect in 2022, instead of 2021. Data reporting for CDLTs will then resume its three-year cycle and will take place again in 2024.
The act also requires a study to be conducted this year on how to improve data collection and rate setting to better reflect Congress’ original intent of a market-based fee schedule for clinical laboratory services.
Many advocacy groups have called CMS’s method for collecting payment data flawed since their reporting requirements largely included independent and commercial labs while excluding most hospital-based labs. There was hope that more hospital labs would be reporting this time around with a rule change that required those utilizing a 14X type of bill to now report, but many of these labs had signaled they were either unclear on the process or unwilling to report.
For example, after the initial reporting cycle in 2017, 75 percent of CLFS tests saw price reductions, with 58 percent having phased-in decreases because of annual reduction cap that limits a test from being reduced by more than 10 percent from the previous year’s rate. That reduction cap jumps to 15 percent in 2021.
The hope is that the study will find a more equitable solution for drawing payment data from across the industry, instead of just a small sector.
“Fortunately, Congress’ decisive action today puts us on the path to enact meaningful PAMA reforms that will protect seniors’ access to essential lab services, as the law originally intended,” American Clinical Laboratory Association President Julie Khani commented in a statement on the move.
If you have any questions about how this impacts your CLFS reimbursements moving forward, don’t hesitate to contact our office at 517-486-4262.