PAMA Pay Cuts: How Have They Affected Your Practice?

FPs Encouraged to Take Survey to Help Fix Faulty Legislation

September 30, 2019 05:18 pm News Staff – As part of its ongoing advocacy efforts, the AAFP is urging family physicians to complete a brief survey on pay cuts to office-based laboratory services that resulted from the Protecting Access to Medicare Act. COLA, an independent, nonprofit laboratory accreditation organization, is conducting the survey to show how PAMA-related cuts to Medicare's clinical laboratory fee schedule have affected physicians' ability to provide office-based laboratory services to patients.

All FPs are strongly encouraged to take the survey at their earliest convenience.

Through the survey, COLA aims to make Congress aware of the negative effects of PAMA and convince legislators to make changes to the fee schedule that will help ensure that office-based labs receive sufficient payment to continue operating and that family physicians and other clinicians can continue to provide point-of-care testing services to patients in need.

Background

Among its many other components, PAMA completely overhauled the Medicare Part B clinical laboratory fee schedule. Under the act, many -- though not all -- clinical labs are required to report their private payer rates on a test-by-test basis along with their associated test volumes. CMS uses this data to calculate "weighted medians" for each CLFS billing code, which, in turn, become the new CLFS rates.

doctor testing blood tube in the laboratory / hands of a scientist holding blood tube sample in hematology lab

Although PAMA became law in April 2014, the revised CLFS payment rates did not go into effect until Jan. 1, 2018. Since that time, many clinical laboratories have seen payments for some tests reduced by as much as 20%. In 2018 alone, payments for clinical diagnostic lab tests decreased by an estimated $670 million; a similar reduction is expected for 2019.

Moreover, the PAMA payment reductions are scheduled to occur at a rate of 10% per year for three consecutive years, meaning that another 10% pay cut will go into effect on Jan. 1, 2020. And unless PAMA is reformed, beginning in 2021, payment reductions will increase to 15% a year for the next three years.

Story Highlights

Given the slim operating margins of many primary care practices, the reduced payments pose a significant financial strain on many of the office-based labs family physicians rely on to provide high-quality care for their patients.

The AAFP has repeatedly warned CMS of the negative effects the PAMA cuts would have. Between March 30, 2017, and Oct. 19, 2017, the Academy sent a series of five letters to CMS Administrator Seema Verma, M.P.H. Among other things, the letters stated that the payment cuts would "endanger Medicare patients' access to clinical testing in settings where patients receive most of their medical care" and "threaten to shutter physician office-based laboratories, which provide essential and rapid point-of-care testing to their patients."

Survey Details

The latest COLA survey consists of just seven questions. Some questions pertain directly to the impact of the PAMA cuts on lab services and patient access to testing; others collect general demographic information.

After the survey closes, COLA will make the data collected available online. For those concerned about providing information, COLA has noted the following: "Your responses will be included in the aggregate data, and no information shared with us will be uniquely identifiable to any one respondent."

This is the second survey COLA has conducted on the effects of the PAMA pay cuts. The organization conducted a similar survey last year.

Recent Activities

The Academy continues to push lawmakers to address PAMA's flaws. This summer, the AAFP joined with more than two dozen other medical and patient organizations in asking Congress to protect access to clinical laboratory services. On July 17, the groups sent a letter to the chairs and ranking members of the Senate Finance Committee, the House Ways and Means Committee, and the House Energy and Commerce Committee requesting a delay in the upcoming data reporting period associated with PAMA.

The organizations have also called on Congress to consider the Laboratory Access for Beneficiaries Act, legislation that would delay the next round of data reporting for one year and give laboratories additional time to report private payer data to CMS.

"Suspending data reporting in 2020 accomplishes two critical goals: It allows a more representative share of labs to report private market data and provides valuable time for stakeholders and policymakers to determine how to reform PAMA and ensure a truly market-based system that will protect Medicate beneficiary access," the July 17 letter stated.