Petition to Congress to Reverse Medicare Cuts (PAMA) to Independent Clinical Laboratories

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We call on Congress to help us secure and strengthen independent clinical laboratories by providing economic relief to this important sector of the health care system. 

On January 1, 2018, CMS published the new clinical laboratory fee schedule, reducing Medicare laboratory test reimbursement 40-50%. This has trickled down to commercial payers and resulted in mass closures of clinical laboratories. As we've seen with the COVID pandemic, we lack the capacity for testing and without testing our economy is now headed into a depression. 

The lack of COVID-19 testing is a direct result of failed Congressional policy (PAMA) that unfairly targeted clinical laboratories and resulted in small rural and regional hospitals and independent clinical laboratories to shutdown and drastically reduce testing services. 

Congress must pass legislation to reverse the aggressive reduction (PAMA) in the clinical laboratory fee schedule to ensure independent clinical laboratories are able to continue to serve as a community resource for years to come, even after the immediate threat of this pandemic passes. We will not have a strong health care system without them. 

As everyone works together to fight the COVID-19 pandemic, independent clinical laboratories continue to play a vital role in providing care to patients and by providing rapid turnaround of laboratory testing to physicians and hospitals. 

Background

On June 17, 2016, the Centers for Medicare and Medicaid Services (CMS) announced the release of its final rule, implementing section 216(a) of the Protecting Access to Medicare Act of 2014 (PAMA), which requires reporting entities to report private payer fees paid to laboratories for laboratory tests. Those fee amounts were then to be used to calculate Medicare laboratory payment rates to more closely align reimbursement to commercial payers. The final rule also announced CMS’ decision to move the implementation date for the private payer rate-based fee schedule to January 1, 2018. The problem with this logic is that independent clinical laboratories always get a percentage of the

Medicare/CMS fee schedule from commercial payers. As Medicare payments are reduced, commercial payments continue to fall. The result is routine testing is not financially viable and thus  independent clinical laboratories have closed.