Understanding the PAMA Regulation for Lab Reporting

November 18, 2015

If you answer YES to any of these questions, you’d better read further:

  • Am I a lab as defined by CLIA, or do I have at least one component that is a lab?
  • Is my entity reporting under a unique Tax ID number under which all NPIs of the entity are associated?
  • Does my Tax ID receive more than 50% of all Medicare revenue (meaning allowed amounts) from fee-for-service payments under Medicare part A, B, C and D?
    • If yes, you can be exempted from reporting if your CLFS revenues are less than $50,000 in a year (or less than $25,000 in 2015). This caveat provides a full exemption for you, even if you answer yes to all of the above.

By now we have all heard about the PAMA regulation for lab reporting, but do we really understand what this is and what it really means to each of us?  Below is a just a little breakdown giving the what, when, who, and why of this regulation.

WHAT:  The general idea of lab reporting is to provide CMS a foundational average payment by private payers on clinical lab services.  With this information, CMS will then start making reductions on the Clinical Lab Fee Schedule going forward.

WHEN: This is still in the comment period.  People have the option to comment up until Nov 24th.  These comments can help ensure clarification of the regulation, as well as help direct some much needed changes.  If this rule goes through, the initial reporting period begins Jan 1, 2016, and you have until March 31, 2016 to get your reporting completed (reporting data from July 2015-Dec 2015).

WHO:  This has been the biggest question of all.  Below is a breakdown of questions to ask to determine if you fall into the requirement for reporting.  If you answer yes to any of these questions, then you are a group who needs to report.  If you fall in this category, be sure to review the final point below, as this may be the one item that will provide a full exemption for you:

  1. Am I a lab as defined by CLIA, or do I have at least one component that is a lab?
  2. Is my entity reporting under a unique Tax ID number under which all NPIs of the entity are associated?
  3. Does my Tax ID receive more than 50% of all Medicare revenue (meaning allowed amounts) from fee-for-service payments under Medicare part A, B, C and D?
    • If yes, you can be exempted from reporting if your CLFS revenues are less than $50,000 in a year (or less than $25,000 in 2015). This caveat provides a full exemption for you, even if you answer yes to all of the above.

WHY:  CMS was ready to make CLFS cuts across the board, which would have been implemented in 2015.  This regulation is giving labs the opportunity to drive these cuts.  This is why the comment period is so important.  With the lack of hospital labs participating (a really large part of the market), this will drive the actual payment per CPT down substantially, and we know if the CLFS goes down, the commercial carriers will follow suit.  Kiss your clinical lab revenue goodbye.

So, given this information, where do you go from here?  We have the following recommendations:

  • First understand the type of information that you will need to report: CDLT and ADLT have different requirements.  See below for more details.
  • Start working with your billing system to ensure that each CPT has the proper allowable captured on paid claims—at minimum from July 2015 forward. The best way to gather this data would be to use ERAs and EOBs.  It is absolutely imperative to ensure payment accuracy.  Remember, your lab CEO or CFO has to sign off on this, and this makes them fully liable.
  • Data points will need to be refined when final instructions are released, so be prepared to take some time on this.
  • System must be able to capture at minimum:
    • DOS
    • Date paid
    • 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
    • Aggregate data in timely buckets: e.g., 7/1/15-12/31/15
  • Data should be captured in a contracted scenario as well as non-contracted scenario and then compare to CMS to give a broad idea of what to expect.

PAMA Make Comments Now

The PAMA regulation is almost ready to roll out, but we still have some time to fight.

The comment period for Medicare’s Clinical Laboratory Fee Schedule (CLFS) proposed rule “Medicare Program: Medicare Clinical Diagnostic Laboratory Tests Payment System” (CMS-1621-P) is open until November 24, 2015, and we must make all the comments we can NOW.

Making our voices heard is the only way to ensure that this regulation is put into place in the most effective way possible.  The lab reporting regulation is specific to certain types of labs only, so you may be wondering why it is important for YOU to comment.  Here are some primary reasons why we ALL must get involved:

  • CMS was going to cut the CLFS anyway, but this is your opportunity to be involved and help create some direction to the changes that are on the table.
  • There are too many unknowns in this regulation right now. We must insist on full disclosure and clarification before moving forward.
  • Because the definition for “applicable lab” takes hospital labs out of the equation (because most are paid on the DRG), this will reduce the volume of reporting, thus driving the final average price of each CPT down. This average is what the new CLFS will be based on.  Once the CLFS is driven down, the commercial carriers will follow on this pricing.  Your lab will ultimately be affected.

So, get on board and send in your comments/questions now.  Every comment has to be responded to, so the more comments there are, the longer it will take to get this regulation passed.  See below for comment options:

  • Comment electronically by using the American Clinical Laboratory website https://www.capwiz.com/acla/home/. At this link, you will also find a sample letter that you can base your comment on.  Under “Take Action Now,” there is a link that takes you directly to the Regulations.gov website, the very place where you can easily make comments and/or upload a document of your choosing that contains your comment.
  • Comments by express or overnight mail: Centers for Medicare and Medicaid Services, Department of Health and Human Services, Attention: CMS-1621-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, Maryland 21244-1850
  • Comments by regular mail: Centers for Medicare and Medicaid Services, Department of Health and Human Services, Attention: CMS-1621-P, PO Box 8016, Baltimore, Maryland 21244-8016

 

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