PAMA’s Payment Impact & Strategies To Protect Your Lab’s Revenue

Medicare’s new pricing plan under the Protecting Access to Medicare Act (PAMA) is damaging to the bottom line for most clinical laboratories. Only 10% of rates for codes on the clinical laboratory fee schedule (CLFS) increased, while the weighted median of the private payor rates shows a decrease over current payment rates for three quarters of all codes on the CLFS.

This should not be a surprise since the most recent CMS estimates indicate the changes in lab prices would save Medicare Part B a whopping $670 million in calendar-year 2018 alone. Since State Medicaid programs cannot reimburse at a rate greater than the Medicare rate, labs will see decreases there as well. States that have established rates at a percentage of Medicare, such as Nevada and Massachusetts, will experience the greatest impact.

PAMA is causing severe ramifications for virtually every payor category and laboratory—from independent labs of all sizes to hospital outreach, and physician office laboratories. Even labs not servicing Medicare should be concerned about the impact on private payors.

What Can We Do?

1. Solid reporting from labs is the key to mitigate future price cuts
2. Correct contracting problems prior to the next reporting period
3. Establish financial systems with appropriate reporting capabilities and retain source documents
4. Eliminate, where possible, contracts tied to the CLFS
5. Let your voice be heard – Industry support for the ACLA lawsuit & legislative changes are needed

How Can We Learn More?

Register to attend the upcoming Roche LabLeaders webinar “Medicare’s PAMA-Based CLFS Payment Impact: Strategic Options to Protect Revenue” with Lale White, Executive Chairman and CEO, XiFin, Inc. on Wednesday, May 2, 2018 at 1:00 pm ET / 10:00 am PT.