ACLA Files Appeal in ACLA v. Azar, Asks U.S. Court of Appeals to Address HHS’s Overreach in Data Reporting

HHS’s continued flawed implementation of PAMA threatens beneficiaries’ access to critical lab services

Washington, D.C. – Today, the American Clinical Laboratory Association (ACLA) advanced its case against the U.S. Department of Health and Human Services’ (HHS) flawed and harmful implementation of the Protecting Access to Medicare Act (PAMA). ACLA’s opening brief argues that HHS has exceeded its statutory authority, circumventing Congress’ stated directive of establishing a market-based reimbursement model for laboratory services.

ACLA initially filed its lawsuit against HHS in 2017. Since then, ACLA and various stakeholders—including organizations representing patients, health care professionals, laboratories and diagnostic manufacturers—have reiterated the ongoing harm caused by the Department’s attempt to exempt nearly 99 percent of the laboratory market from the data reporting requirements under PAMA.

As ACLA’s brief notes, the Secretary’s final rule ” violates Congress’s unambiguous statutory directive to collect data from any ‘laboratory’ that receives a majority of its Medicare revenues from the relevant fee schedules. Instead, the Secretary’s rule rewrites the statute’s majority-of-revenues test to take into account non-laboratory revenue and, through this rewrite, exempts virtually all hospital laboratories from the data-reporting requirements. Because hospital laboratories are significant participants in Medicare and compete with independent laboratories and physician office laboratories in the private market, the Secretary’s rule guarantees that the data collected does not reliably represent the private market as Congress intended.”

HHS’ statutory violation has serious consequences for millions of Medicare beneficiaries, particularly the most vulnerable, who rely on essential lab services to monitor and manage a range of chronic diseases. Laboratories, including those serving rural communities and homebound seniors, have been forced to reduce services and care for Medicare beneficiaries as a result of the flawed data collection process.

“It’s imperative that the Court puts a stop to the Secretary’s regulatory overreach,” Julie Khani, President of ACLA, said. “Seniors are bearing the direct harm from the Department’s continued reliance on a failed process that directly contradicts the stated goals of Congress in protecting beneficiaries’ Medicare lab benefits.”

While the Court reviews the appeal, it is imperative that Congress take immediate action to address the harm facing millions of seniors and their access to essential lab services. Congress must reform and modernize the Clinical Laboratory Fee Schedule to ensure that all patients can continue to access the lab services upon which they depend.

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ACLA is a not-for-profit association representing the nation’s leading clinical and anatomic pathology laboratories, including national, regional, specialty, hospital, ESRD and nursing home laboratories. The clinical laboratory industry employs nearly 277,000 people directly, and generates over 115,000 additional jobs in supplier industries. Clinical laboratories are at the forefront of personalized medicine, driving diagnostic innovation and contributing more than $100 billion to the nation’s economy.

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