In 2014, Congress passed The Protecting Access to Medicare Act (PAMA) to reform the Medicare Clinical Laboratory Fee Schedule (CLFS) to a single national fee schedule based on private market data from all types of laboratories. Unfortunately, the first round of data collection in 2017 failed to capture adequate and representative private market data, leaving out virtually all hospital outreach labs and significantly under-sampling physician office laboratories (POLs). Only 1,942 labs out of 250,000+ reported information to CMS, including only 21 hospitals nationwide.

The significant under-sampling led to the Centers for Medicare and Medicaid Services (CMS) to drastically underestimate the market rates for virtual all clinical laboratory tests. Nearly $4 billion in cuts to those labs providing the commonly ordered test services for Medicare beneficiaries have occurred so far, already surpassing the original, ten-year projected cost savings by $500 million. For context, the total CLFS cost for 2020 was only $8 billion or less than 3% of Medicare Part B spending.

Congress has intervened on a bipartisan basis three times to delay CLFS reporting periods and twice to delay cuts to maintain patient access to lab services.

  • In 2019, the Laboratory Access for Beneficiaries (LAB) Act became law and delayed further reporting of data and mandated a report from MEDPAC on the impact on the cuts already in place. The report showed that the data reporting system was deeply flawed and didn’t reflect the current market, and also showed that alternative reporting methods, like statistical sampling, would produce more accurate results and reduce the burden on those who were required to report data.
  • In 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, prevented any cuts to the CLFS.
  • One year later, the Protecting Medicare and American Farmers from Sequester Cuts Act of 2021 delayed any further cuts until January 2023.

Without a sustainable solution to this problem, labs face another round of cuts of up to 15 percent in January 2023. The clinical laboratory remains at the forefront of patient care, responding to public health disruptions and threats such as COVID-19. These cuts will exacerbate critical workforce shortages and reduce investment in the infrastructure necessary for clinical laboratories to identify and test for future pandemic-causing microorganisms.

The Saving Access to Laboratory Services Act (SALSA) (H.R. 8188/S.4449) is a permanent solution that would set Medicare reimbursement for lab services on a sustainable path forward. SALSA will give CMS new authority to collect private market data through statistically valid sampling from all laboratory segments for the widely available test services where previous data collection was inadequate. The bill ensures accurate private market rates are collected, provides a much-needed reduction in reporting burden, and protects labs and Medicare from dramatic rate increases or decreases with a gradual phase-in approach.