ACLA v. Becerra: Frequently Asked Questions

What is ACLA’s response to the court’s recent dismissal of the lawsuit? 

On March 30, 2021, the district court for the District of Columbia issued a memorandum opinion and order that for the second time dismissed the lawsuit filed by ACLA.  The court’s decision acknowledged that the Court of Appeals for the D.C. Circuit previously determined that ACLA’s case is not precluded by the statutory provision barring judicial review of the “establishment of payment amounts.”  It also recognized that the D.C. Circuit remanded the case for the district court “to address in the first instance the merits of [ACLA’s] arbitrary and capricious challenge.”  Nonetheless, instead of addressing the merits, the district court dismissed the case as moot, asserting that because of the statutory provision barring judicial review of the “establishment of payment amounts” no live controversy exists between the parties that can be redressed by a favorable judicial decision.   

In its previous appeal, ACLA has argued that “Congress precluded judicial review of only ‘the establishment of payment amounts.’ It did not bar review of the Secretary’s final regulations establishing the parameters for collecting confidential data from laboratories.” The Court of Appeals upheld this distinction in July 2019, and noted that, “PAMA’s data collection provision…is distinct from its rate-estimation provisions.” The D.C. Circuit expected the district court on remand to address the merits of ACLA’s claims. Unfortunately, as evidenced by its refusal to hold oral argument and its delay in issuing a decision, the district court failed to give the case the careful consideration it deserves and issued a ruling that is contrary to law. In response, ACLA filed an appeal on May 28, 2021. 

Is there still a need for Congress to act? 

Yes. Regardless of what happens in the appeal, a legislative solution remains necessary. 

ACLA’s lawsuit is about CMS’s implementation of the Protecting Access to Medicare Act (PAMA), a law passed in 2014 to establish a market-based laboratory payment system. Unfortunately, the intent of PAMA was not achieved due to its flawed implementation, which resulted in data reporting from just a small fraction of the laboratory market.  This resulted in artificially low Medicare rates for many laboratory services that could ultimately lead to access challenges for patients. ACLA supports the clear direction of Congress to establish a Medicare payment system based on the collection of private payor rates across the wide spectrum of the clinical laboratory community. Therefore, as ACLA continues its advocacy in the courts, the association will continue to work with policymakers to establish a Medicare Clinical Laboratory Fee 

Schedule that is truly representative of the market and supports continued innovation and access to vital laboratory services, as Congress intended.   

In an acknowledgement of the harm facing seniors, Congress has taken important initial steps to address the impact of PAMA, including the bipartisan passage of the 2019 Laboratory Access for Beneficiaries (LAB) Act and more recently, a delay of ongoing laboratory cuts as part of the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act. However, laboratory cuts are scheduled to return in 2022 and could threaten access to testing for seniors and our most vulnerable populations. These cuts will amount to up to 15 percent reductions in reimbursement for certain tests used to diagnose a range of chronic conditions, including heart disease and diabetes. The 2022 cuts are on top of cuts that have already taken place in the last three years (2018, 2019, 2020).  

What is the impact of PAMA’s flawed implementation on ACLA members and
Medicare beneficiaries?

Millions of seniors rely on lab tests for their health. Approximately 85 percent of older Americans have at least one chronic health condition, and 60 percent have at least two, according to the CDC.  By drastically cutting rates, including for many of the most commonly performed lab tests, access to critical lab services may be threatened, including lab services used to diagnose and treat beneficiaries with a range of chronic conditions, such as heart disease, diabetes and other common health conditions. According to CMS, these routine low-cost tests are facing cuts between 20 and 30 percent – with many tests being cut more than 30 percent. This unsustainable reimbursement model makes it more challenging for some laboratories to provide the testing patients need.

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