Throughout the COVID-19 pandemic and subsequent Mpox Public Health Emergency (PHE), ACLA members provided extraordinary leadership and support for the U.S. Government’s response efforts by rapidly developing tests and scaling nationwide testing services. Essential to a robust response is strong public-private collaboration rooted in an appreciation for the critical role that clinical laboratories serve in our nation’s public health infrastructure. While the COVID-19 PHE may have officially ended May 11, 2023, the need for quality COVID-19 testing remains and ACLA members will continue to provide these testing services to communities across the country.
ACLA is engaging with policy makers to share recommendations, informed by the experience and expertise of ACLA members. These recommendations are included in a report, the National Diagnostics Action Plan, which ACLA co-authored with the Johns Hopkins Center for Health Security. The Plan proposes actionable steps in advance of future public health emergencies to optimize the readiness and response of public and private stakeholders in the testing ecosystem.
At the end of 2022, Congress passed several policies from the Prepare for and Respond to Existing Viruses, Emerging New Threats, and Pandemics Act (PREVENT Pandemics Act) that took important steps toward improving some aspects of preparedness, including the provision of new authorities to strengthen public-private collaboration. As Congress undertakes the reauthorization of the Pandemic and All-Hazards Preparedness Act (PAHPA) this year, ACLA is advocating for additional advances in our nation’s public health emergency preparedness and response efforts to bring meaningful improvements in our nation’s ability to respond to future pathogens of concern swiftly and meaningfully with quality testing.
These recommendations are also reflected in ACLA’s responses to Requests for Information (RFIs) on PAHPA from the House and Senate issued in early 2023:
ACLA is calling on Congress to pass the bipartisan, bicameral Saving Access to Laboratory Services Act (SALSA) to ensure patient access to laboratory testing services, protect the nation's clinical laboratory infrastructure, and support innovation in testing to advance the next generation of personalized care. More than 60 patient, provider, and consumer organizations support this important legislation.
SALSA is critically needed to correct flaws in the implementation of the Protecting Access to Medicare Act (PAMA), passed by Congress in 2014 to reform the Medicare Clinical Laboratory Fee Schedule (CLFS). Congress intended for private market data collected from all types of laboratories, including hospital outreach laboratories, independent laboratories, and physician office laboratories to be the basis for CLFS payment rates. Unfortunately, the first round of data collection captured fewer than 1 percent of laboratories, artificially reducing laboratory test payments.
The result has been three years of up to 10 percent cuts for 75 percent of laboratory tests, amounting to $3.8 billion in payment reductions for the most commonly ordered test services for Medicare beneficiaries. Congress, on a bipartisan basis, has intervened three times to prevent further PAMA cuts. However, cuts of up to 15 percent will resume January 1, 2024, absent congressional action.
If imposed, these steep Medicare cuts for clinical laboratory services could reduce patient access to testing and impede research and innovation in the next generation of laboratory services that can improve and save lives. These cuts would also undermine the nation's testing capacity and infrastructure that is critical in times of health emergency, day-to-day care, and essential to meeting the growing health care needs of the country, including in medically underserved communities.
SALSA would simplify the data collection process by providing the Centers for Medicare & Medicaid Services (CMS) with the authority to collect data from a statistical sampling of all major types of laboratories that provide services to seniors, including independent, hospital, and physician office laboratories. Targeted sampling, as designed by SALSA, is a straightforward solution to collecting complete representative private market data to achieve accurate and sustainable Medicare rates for laboratory services.
In the long-term, sustainable reimbursement for laboratory services will support strong clinical laboratory infrastructure to protect patient access and public health, while fostering innovation in tomorrow's diagnostics to improve and save lives.
Join the Stop Lab Cuts campaign. Clinical laboratories along with many provider, patient, and consumer stakeholder groups are coming together to advocate for sustainable Medicare rates for laboratory services. The Stop Lab Cuts campaign advocates for passage of the Saving Access to Laboratory Services Act to ensure patient access to laboratory testing services, protect the nation's clinical laboratory infrastructure, and support innovation in testing to advance the next generation of personalized care.
Visit StopLabCuts.org to learn more.Updated March 2023
Clinical laboratories are reimbursed for providing services to Medicare beneficiaries using either the Physician Fee Schedule (PFS) or the Clinical Laboratory Fee Schedule (CLFS), depending on the nature of the service. In addition, clinical laboratories provide services to beneficiaries of other government programs such as Medicaid, TRICARE and the Federal Employee Health Benefit Plan (FEHBP), as well as commercial plans.
Lab reimbursement in many of these programs has been reduced in recent years, and in the case of the Medicare program, annual cuts are scheduled in current law not only as a result of sequestration, but also through annual cuts built into the Affordable Care Act.
While payments for lab services are being slashed, the costs associated with providing critical laboratory services - including labor, supplies, and transportation - continue to climb.
Although many labs have managed to navigate changes in markets and reimbursement and while still continually improving quality, continued arbitrary and severe payment reductions will result in reduced access to essential tests for critically ill patients, less innovation, more closures or consolidation of businesses, and more people out of jobs.
Developing a comprehensive approach to diagnostic reform – one that fosters innovative care delivery – is vital to our ability to tackle the most challenging and complex health needs of the country. Meaningful reforms must balance federal oversight with support for cutting-edge innovations and should account for distinct differences between laboratory developed tests (LDTs) and in vitro diagnostics (IVDs).