Cuts to the Medicare Clinical Laboratory Fee schedule threaten to further erode the precarious finances of America’s clinical laboratories, severely limiting their ability to staff laboratories and pushing an exhausted workforce even further into burnout.
These cuts will severely limit access to laboratory services that over 56 million seniors rely on to manage chronic conditions, cancer, and other complex health issues. Our most vulnerable seniors bear the brunt of these cuts. Some specialized labs that serve nursing homes, skilled nursing facilities, and long-term care facilities have already been forced to shut down operations, reduce services, and lay off employees Infectious disease testing may further be limited. Rural beneficiaries in need of routine testing to monitor chronic diseases may face delays.
Congress has repeatedly taken bipartisan steps to mitigate the harmful impacts of PAMA cuts, including the passage of the Laboratory Access for Beneficiaries (LAB) Act in 2019, and more recently, a delay of cuts and data reporting as part of the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Unless Congress acts by December 31, further significant cuts and another round of flawed data collection will both occur on January 1 and threaten access to testing. To keep patients safe and healthy amid the ongoing public health emergency, please take action to urge your members of Congress to enact a one-year delay of cuts and data reporting by December 31 to provide the additional time needed to enact permanent common-sense changes to Medicare lab rate calculation.
When it became law in 2014, provisions in the Protecting Access to Medicare Act (PAMA) were intended to set rates for Medicare’s reimbursement for diagnostic testing to the private market. Unfortunately, flaws in the law and its implementation led to a narrow definition of “the market” to mean mostly large commercial laboratories, leaving most hospital laboratories and physicians office laboratories, where the majority of testing is performed, out of the market calculation. Since many private payors use the Medicare fee schedule as the basis for their own reimbursement rates, the impact on laboratories has been profound while trying to manage critical personnel shortages and supply chain disruptions.
On January 1 of each year from 2018 to 2020, the Centers for Medicare and Medicaid Services (CMS) implemented 10% cuts to reimbursement rates for most of the tests reimbursed by Medicare. Fifteen percent cuts scheduled for January 2021 were delayed by Congress as part of COVID relief and to give time for the Medicare Payment Advisory Committee (MedPAC) to study the problem. MedPAC’s report released in June of this year confirmed that the current system for collecting market data is deeply flawed and that alternative approaches would provide both a better representation of the market and reduce the administrative burden on healthcare institutions with applicable laboratories that are required to report data to CMS.
Without Congressional action, CMS is set to implement 15 percent cuts to reimbursement rates for 500 of the most common tests performed for Medicare beneficiaries.
ASCLS and our partner societies in the clinical laboratory community are committed to advocating for longer-term and permanent fixes to ensure Medicare pricing is based on the actual market, but Congress must act in the next few weeks to prevent a deeper spiral.
Congress needs to hear from the front lines where laboratory professionals have been working to make our fellow citizens safer and healthier in the middle of a global pandemic.