Linda Goossen, PhD, MT(ASCP), ASCLS Government Affairs Committee

Nearly 120 clinical laboratory professionals from 38 states met in Washington, D.C., March 18-19 for the 31st Annual Legislative Symposium. Sponsored by six professional organizations—the American Society for Clinical Laboratory Sciences (ASCLS), the Clinical Laboratory Management Association (CLMA), the American Society for Clinical Pathology (ASCP), the American Medical Technologists (AMT), the Association of Genetic Technologists (AGT), and the National Society for Histotechnology (NSH)—this annual two-day event first enables attendees to learn about the legislative and regulatory issues at the federal level that impact laboratories, laboratory professionals, and ultimately our patients. Second, attendees are prepared to take the issues to their senators and representatives and thus advocate on behalf of the profession.

Patrick Cooney, ASCLS legislative liaison; Michael McCarty, AMT legal counsel; and Matt Schultz, ASCP director of government affairs, spoke about the current political environment in Washington, which has been impacted by the recent elections and democrats holding a majority in the House or Representatives. Our meetings on Capitol Hill this year focused on three legislative or regulatory issues that currently impact clinical laboratories: (1) crisis in the clinical laboratory workforce; (2) flawed implementation of Section 216 of the Preserving Access to Medicare Act (PAMA); and (3) regulation of laboratory-developed tests (LDTs).

The importance of our six organizations speaking with one voice as we advocate for the laboratory profession and ultimately for our patients cannot be understated. Our united voice makes a much greater impact than individual voices.

Crisis in the Clinical Laboratory Workforce
A critical issue impacting clinical laboratories is the shortage of clinical laboratory personnel. The demand for the services of clinical laboratory personnel is growing, primarily due to the aging population and increased demand for laboratory services; retirement of the aging laboratory workforce; and new laboratory tests resulting from technology advances. With more than 10,000 new beneficiaries enrolling in Medicare each day, the Medicare population will rise from 20 million in 1970 to 80 million in 2030. Long-term and pervasive shortages of qualified professionals to fill many clinical laboratory and other allied health positions are expected.

The U.S. Department of Labor’s Bureau of Labor Statistics (BLS) anticipates needed growth of 12,000 new medical laboratory professionals per year to meet the growing demand. Yet, academic programs produced just 6,300 graduates in 2017, another factor leading to the crisis in the clinical laboratory workforce. Limited or no federal investment is being provided to address the workforce shortage in allied health.

In light of the current employment outlook for clinical laboratory personnel and other allied health professionals, as documented by the BLS, attendees urged their representatives in Congress to

  • Establish a program of scholarships and loan repayment to alleviate shortages of clinical laboratory scientists and other allied health professionals. The scholarship and loan repayment program shall include a period of obligated service for recipients in a designated health professional shortage area.
  • Establish a demonstration program to improve access to clinical education opportunities for allied health professionals under which an eligible hospital may receive payment for reasonable costs associated with the provision of qualified clinical training for clinical laboratory scientists and other health professionals.
  • Require the secretary of Health and Human Services, in collaboration with the U.S. Department of Veterans Affairs, to identify which allied health occupations are in significant shortage on an annual basis.

On behalf of ASCLS, Patrick Cooney and staff are drafting the Allied Health Personnel Shortage Act, which contains the actions referred to in our visits to Capitol Hill, as listed above. We are currently looking for bill sponsors.

Flawed Implementation of PAMA
The second issue that we spoke to our representatives about is the flawed Preserving Access to Medicare Act of 2014 (PAMA). Signed into law on April 1, 2014, section 216 of PAMA includes the most extensive revision of the Clinical Laboratory Fee Schedule (CLFS) since it was established in 1984. The proposed rule required “applicable” clinical laboratories to report private payer payment rates and the test volume associated with those payment rates for laboratory services reimbursed under the CLFS. The intent of PAMA was to ensure true market-based pricing by setting the fee schedule to a weighted median of the collected data.

There were problems from the beginning. The Centers for Medicare and Medicaid Services (CMS) failed to publish the proposed rule in a timely manner; the statute required a final rule to be published by June 30, 2015, to enable laboratories to prepare their systems to submit data during 2016 for a January 1, 2017, initiation of the new fee schedule. The final rule was published June 23, 2016, in the Federal Register.

In addition, the proposed rule defined “applicable laboratory” as an entity with a National Provider Identifier (NPI), and this definition of applicable laboratory excluded virtually all hospitallaboratories and physician office laboratories, as well as over 50 percent of independent laboratories. Applicable laboratories also must have more than $12,500 in Medicare revenues from laboratory services on the CLFS and receive more than 50 percent of their Medicare revenues from laboratory and physician services during the data collection period. Excluding pricing data from hospitals and smaller laboratories allowed CMS to base industry-wide payment rates on data drawn from large reference laboratories that have significant economies of scale and, typically, much lower payment rates.

Given the definition of an “applicable” lab, 90 percent of the reported data came from independent laboratories; hospitals and POLs, which provide 44 percent of the laboratory services under Medicare, represented just 8.5 percent of the reporting entities; only 21 of the 6,994 hospital laboratories submitted data; only 1,106 of the ~ 236,000 POLS reported; and only 1.85 percent of the data collected came from laboratories serving rural areas.

The result of this bias in reporting is a significant lowering of the Medicare Fee Schedule as well as private payer rates for all laboratories, beginning in 2018. Small, local, physician office, and hospital labs that function close to the patient and thus can provide rapid results have already been impacted by this loss of revenue, to a level that has resulted in decreases in in-house testing, new technologies, funding for raises and benefits, and subsequently more tests being sent to reference labs. This situation will ultimately lead to the loss of jobs and the bankruptcy of clinical laboratories. Rather than protecting access to healthcare, these cuts are beginning to prohibit access to rapid diagnosis and treatment of disease. In the long run, patients will suffer. PAMA cuts will be particularly burdensome to the most vulnerable seniors, such as those in skilled nursing facilities, those managing chronic conditions, and seniors living in medically underserved communities.

For 2019, CMS has defined any hospital laboratory that uses the CMS 1450 14X to bill for Medicare Part B clinical laboratory tests as an “applicable laboratory” under PAMA. Under the final rule, laboratories, including physician office laboratories, are required to report private payer rate and volume data if they: (1) have more than $12,500 in Medicare revenues from laboratory services on the CLFS; and (2) receive more than 50 percent of their Medicare revenues from laboratory and physician services during a data collection period. That means a majority of hospital labs in the United States are required to report the prices they were paid by private health insurers to CMS. Laboratories will collect private payer data from January 1, 2019, through June 30, 2019, and report it to CMS by March 31, 2020.

While medical laboratories continue to grapple with the impact of reduced reimbursement rates under PAMA’s revised CLFS final rule, the new rules for what constitutes an “applicable lab” and the new reporting requirements that started January 1, 2019, add yet another level of complexity to reporting and compliance concerns. Rodney Forsman, assistant professor emeritus of lab medicine and pathology at the Mayo Clinic College of Medicine, in Rochester, Minnesota, told Dark Daily that “Laboratories must work to identify reporting concerns, billing and IT limitations, and identify current statutes and limitations to present to compliance officers and stakeholders. Failure to do so could leave labs liable for fines of up to $10,000 per day.”

Attendees urged their representatives in Congress to fix the flawed implementation of section 216 of PAMA. We urge Congress to: (a) make a statutory adjustment to the CLFS payments that provides short-term relief and allows time to revise the rate setting process conducted by CMS; (b) ensure a valid stratified random data sample is collected by CMS that represents all segments of the laboratory market; (c) require that data collection requirements streamline collection to reduce the burden on participating laboratories by focusing on data specific to the private market; and (d) revise PAMA statutory requirements to calculate final CLFS payment rates per code as a weighted mean proportionate to laboratory-type, market share, and geography.

Regulation of LDTs
The third issue brought forward during the Legislative Symposium was regulation of laboratory-developed tests (LDTs). In December of 2018, Representatives Larry Bucshon (R-IN) and Diana DeGette (D-CO), members of the House Energy and Commerce Committee, drafted a bill, called the Verifying Accurate, Leading-edge, IVCT Development Act (VALID Act of 2018). The VALID Act is an attempt to develop a new regulatory framework for LDTs.

Laboratory-developed tests are defined by the Food and Drug Administration (FDA) as in vitro diagnostic tests that are designed, manufactured, and used within a single laboratory. “ASCLS believes that LDTs must be regulated to ensure their accuracy and overall patient safety. Patients and health care providers need accurate, reliable, and clinically valid tests to make good health care decisions. Inaccurate or false tests results, or accurate measurements with an invalid claim regarding the test results’ relationship to a disease (clinical validity), can lead to substantial patient harm.”

ASCLS, representing clinical laboratory professionals, agrees that LDTs must be regulated to ensure their clinical validity, accuracy, and overall patient safety. Attendees asked their representatives in Congress to support the VALID Act of 2018.

On March 19, 2019, more than 115 clinical laboratory professionals rode the Washington, D.C., Metro system to Capitol Hill to tell our senators and representatives who we are, what we do, and to stress how critical our services are to the health of the people we serve. The experience of advocating on behalf of our profession is rewarding. The importance of our six organizations speaking with one voice as we advocate for the laboratory profession and ultimately for our patients cannot be understated. Our united voice makes a much greater impact than individual voices.

Linda Goossen is professor emerita at Grand Valley State University in Allendale, Michigan.