Recent NILA report highlights harmful impacts of misguided PAMA implementation on labs and seniors
A report recently published by the National Independent Laboratory Association (NILA), highlights the ways in which the Protecting Access to Medicare Act (PAMA) is undermining the nation’s clinical laboratory infrastructure. Specifically, the report demonstrates the harmful impacts the legislation has already had on community and regional labs across the country and the threats current PAMA implementation poses to seniors’ access to lifesaving clinical tests.
The implementation of PAMA—enacted by Congress in 2014 with the intent of having Medicare reimbursement for clinical laboratory services more closely reflect private market rates—has been flawed and misguided. Rather than collecting data on private market payment from a broad range of labs as directed by Congress, the Department of Health and Human Services (HHS) cherry-picked data from less than 1 percent of labs across the country to determine rates for the new Medicare Clinical Laboratory Fee Schedule (CFLS).
By ignoring reimbursement data from more than 99 percent of labs, HHS has released and implemented a CFLS that completely fails to reflect the full clinical laboratory market, flying in the face of Congress’ directive and resulting in extreme cuts to vital lab services and jeopardized care for the most vulnerable Medicare beneficiaries.
NILA’s report, which surveyed nearly a dozen representatives from community and regional laboratories, demonstrates that many of the potential harms posed by HHS’ flawed implementation of PAMA, have already taken hold. The survey found that the broad and deep cuts made to the CFLS this year have resulted in:
- Reduced or limited service offerings. Many community and regional labs have reduced house-calls to homebound patients, discontinued 24-hour emergency STAT testing or restricted their services at skilled nursing facilities in response to the 2018 PAMA cuts.
- Forced changes to laboratory business models. All of the labs surveyed indicated that PAMA has already negatively impacted their operations and business. As labs’ uncertainty about the ability to keep their doors open past 2018 grow, some labs are reconsidering their client lists based on costs, patient population and location, while others are feeling pressure to diversify their services or expand direct billing to patients.
- Reductions in workforce. Four of the 11 laboratories surveyed reported that they have had to reduce their workforce in order to adapt to cuts made by PAMA. One lab reported terminating 45 full-time employees this year—marking the first time in decades that the lab has reduced its workforce.
Further, the majority of labs interviewed by NILA also expressed concerns about the how PAMA will impact their services and patient access into the future. Representatives from laboratories participating in the survey, indicated concerns about the long-term impacts of PAMA on laboratory innovation, the ability of labs to continue to provide services to skilled nursing facilities. Given this feedback from the laboratories surveyed, it raises concerns about the future of the community independent laboratory sector as a whole.
Read NILA’s full report on the adverse impacts of PAMA here.
