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Industry Insights

PAMA laboratory reimbursement cuts delayed through 2024

PAMA Reporting Delayed Again as Permanent Fix Sought

Labs received a welcome reprieve from looming Clinical Lab Fee Schedule (CLFS) cuts this month when Protecting Access to Medicare Act (PAMA) reporting and associated test reimbursement reductions were delayed until 2025 with the passage of a short-term government funding bill. This marks the fifth time Congress has acted to delay PAMA cuts and reporting.

Had this stopgap measure not passed, many CLFS tests would have undergone cuts of up to 15% in January and labs would have faced requirements to report new private payer data. If reporting requirements under the act as currently written are eventually reinstated, labs will be required to report their private payer data originally collected between January and June 2019.

In 2014, Congress passed PAMA, to reform the CLFS to a single national fee schedule based on private market data from all types of laboratories that service Medicare beneficiaries, including independent laboratories, hospital outreach laboratories, and physician office laboratories (POLs).

Unfortunately, the first round of data collection in 2017 failed to capture an adequate and representative sample of private market data, leaving out virtually all hospital outreach laboratories and significantly under-sampling POLs, according to analysis from the College of American Pathologists. The significant under-sampling led to nearly $4 billion in cuts to those laboratories providing the most commonly ordered test services for Medicare beneficiaries. For context, the total CLFS spend for 2020 was only $8 billion, less than 3% of Medicare Part B spending.

While we’re celebrating this win, the industry must ultimately work to pass the Saving Access to Lab Services Act (SALSA) in 2024 to institute a sustainable fix to the broken process introduced by PAMA. Thank you to the American Clinical Laboratory AssociationNational Independent Laboratory Association, and all other lab advocates who fought for this change!


Medicare Physician Fee Schedule Final Rule

The Medicare Physician Fee Schedule Final Rule was released earlier this month by CMS. Here’s a quick overview of what labs and pathologists should know:

The 2024 Conversion Factor is set at $32.74, a roughly 3.4% decrease from the 2023 CF.

Overall payments for pathologists are expected to decrease by 2%, while payments for independent labs are projected to drop by 1%. (Keep in mind, most labs receive the bulk of their reimbursements from the CLFS). Analysis from CAP attributes the reductions primarily to the addition of the E/M add-on code G2211 and a 1.25% reduction in payments granted by the Consolidated Appropriations Act.

The MIPS/QPP Pathology Measure Set will remain unchanged, as will the 75-point scoring threshold required to avoid a payment penalty. However, the data completion threshold for quality reporting will be raised to 75%.

Our RCM Solutions Team is diving into these changes and analyzing the fee schedule impact for our clients. If you have questions about how your revenue in 2024 stands to be impacted by rate changes to a particular code, don’t hesitate to reach out to us directly for a free consultation!


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