ACLA Leads Clinical Laboratory Community in Urging CMS to Address State Medicaid Rate Cuts for Lab Services

(Washington, D.C.) – The American Clinical Laboratory Association (ACLA) along with a dozen clinical laboratory stakeholders sent a letter to Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma today urging her to discourage states from making cuts to Medicaid rates for lab tests. The letter notes that with the flawed implementation of the Protecting Access to Medicare Act (PAMA) significantly reducing Medicare rates for lab tests, states moving forward with additional Medicaid cuts for testing services will exacerbate an already clear and present threat to patient access.

“ACLA has been a strong and vocal advocate for protecting patient access to lab tests,” said Julie Khani, president of ACLA. “The current reimbursement policies in both Washington, D.C. and now certain states, will pose hardships for patients and for clinical laboratories providing this key healthcare service. Medicaid cuts on top of Medicare cuts target the most vulnerable patient populations in the U.S.  This is not sound policy.”

The letter reads, “We urge you to educate state Medicaid agencies by issuing a State Medicaid Director letter and an Informational Bulletin regarding the recently-implemented PAMA cuts and remind them of their obligation to provide Medicaid reimbursement for laboratory services that is sufficient to ensure access to those services.” It goes on to say, “Patient access to laboratory services is already at risk due to PAMA cuts, especially for vulnerable patients and patients in rural and underserved areas where there are relatively few laboratory providers. Furthermore, those rural providers have a disproportionately larger percentage of Medicare patients than urban providers, which exposes those providers to greater losses as a result of the recent Medicare cuts. These providers not only have to manage Medicare cuts to laboratory reimbursement, but potentially also even deeper Medicaid reimbursement cuts.”

States that base their Medicaid reimbursements for clinical laboratory services on the federal Medicare Clinical Laboratory Fee Schedule (CLFS) are already expected to realize significant savings due to PAMA cuts without taking any action of their own. For example, Missouri which bases its Medicaid rates on the Medicare CLFS is planning cuts 20 percentage points – or an estimated $13.2 million – to its Medicaid reimbursements for lab tests, potentially impacting hundreds of thousands of the state’s beneficiaries who rely on laboratory services to prevent, diagnose, and monitor disease.

Congress enacted PAMA in 2014, which aimed to establish a market-based system for determining lab payment rates. However, CMS instituted a flawed data collection methodology that excluded the vast majority of U.S. laboratories and instead relied on a tiny, non-representative sample to determine rates. As a result, Medicare reimbursements to clinical labs are estimated to be cut by $670 million this year and additional rate reductions scheduled for 2019 and 2020 will slash payments by nearly 30 percent for many tests critical for Medicare beneficiaries.

“Clinical laboratories represent a vital component of the healthcare continuum by targeting diagnoses and helping to guide physician treatment decisions,” said Khani. “Diagnostic innovation is at the forefront of precision medicine and impacting patient care every day.  Reimbursement rates at both the state and federal level should recognize the value of clinical laboratory services and promote patient access – not deter it.”

The ACLA was joined by the American Medical Technologists, the American Society for Clinical Laboratory Services, the American Society for Clinical Pathology, the Association of Public Health Laboratories, the Clinical Laboratory Management Association, the College of American Pathologists, the Medical Group Management Association, the National Association of the Support of Long Term Care, the New York State Clinical Laboratory Association, the New York State Society of Pathologists, the National Independent Laboratory Association and the Point of Care Testing Association.

To read the letter in its entirety, click here.

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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, ESRD, hospital 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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