Originally put into effect in 2017, the Protecting Access to Medicare Act (PAMA) requires many labs to report private payer data for clinical diagnostic lab tests to CMS every three years. The data is used to determine median payments in an effort to bring the Clinical Laboratory Fee Schedule (CLFS) in line with market rates.
Tests could be reduced by no more than 10 percent annually for the program’s first three years, with reductions now set to cap at 15 percent between 2022-2025 (scheduled rate reductions were frozen in 2021 due to provisions in the CARES Act.)
Initially, the next round of reporting for payer data collected between January and June of 2019 was supposed to take place during the first quarter of 2020. However, legislative and public health emergency-related delays pushed the reporting schedule back two years. Now, between January and March 2022, labs are required to report data collected between January and June 2019. This data will be used to establish CLFS rates from 2023 to 2025.
After the initial reporting cycle in 2017, 75 percent of CLFS tests saw price reductions, with 58 percent having phased-in decreases because of the annual reduction cap. Despite these cuts, overall Medicare spending on laboratory services rose by 6 percent, or $459 million, between 2017 and 2018, according to the U.S. Department of Health and Human Services (HHS) Office of the Inspector General (OIG). Lab industry advocates, however, attribute that increase to spending on genetic tests, which increased by $496 million during that same period.
So, how do you know if your lab is required to report PAMA data next year, and what penalties could you face for failing to do so? Read our summary below to find out:
Which labs are required to report?
- Labs DO NOT REPORT PAMA data if they received $12,500 or less in Medicare Clinical Laboratory Fee Schedule revenue during the data collection period (January 1 to June 30, 2019).
- Applicable lab: Includes all labs that have a NPI (lab or individual) that collects more than 50% of its Medicare revenue during the collection period under the CLFS or Medicare Physician Fee Schedule (MPFS).
- Hospital outreach labs that bill under the hospital’s NPI and utilize a CMS-1450 14x type of bill (TOB) form are also included.
- Medicare Advantage (Part C) is excluded from calculation of total Medicare revenue.
- Report by TIN.
What pricing/test information do I report?
- Specific HCPCS Code:
- For each test on the CLFS, excluding unlisted or NOC codes.
- A full list of applicable codes may be downloaded here: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ClinicalLabFeeSched/PAMA-Regulations.html
- Private Payer Rate:
- Final amount paid for a CDLT between January 1 and June 30, 2019.
- Report based on allowed amount.
- Does not include info about denied payments.
- Include volume of tests paid at each private payer rate.
- Include change in rate during reporting period.
- DON’T INCLUDE:
- Medicaid fee-for-service.
- Other government payers.
What penalties could my lab face for failing to report PAMA data?
- CMS reserves right to determine if a lab has failed to report all applicable info.
- Law allows for penalties of up to $10,000 per day, per violation!
- No labs were penalized for 2018 reporting; however, the OIG has recommended CMS levy penalties for noncompliance during this reporting round to increase participation.
As this stage, labs should have their 2019 data collected and ready to submit when January 2022 hits. If you have not already established who will certify and submit the data to the CLFS Data Collection System, now is the time to register those individuals to do so! For more assistance on this process, a step-by-step guide is available here. Labs seeking guidance on this process may also reach out directly to our RCM Consulting team.