Wednesday, June 9, 2021

Is Medicare's Table of PAMA Rate Cut Rules, Confusing?

From time to time people ask me about the confusing combinations of PAMA rate cut rules, and I usually refer them to a pretty good table on the CMS website. 

Today, I noticed it may be confusing.

PAMA law reset Medicare fee schedule prices to median survey-based prices, and reset the fee schedule by a new survey every three years.  In the first three years, annual rate cuts year-to-year could not exceed 10%.   As originally planned, in the second three years, annual rate cuts year-to-year could not exceed 15%.   After that, new triennial fees would be implemented immediately without windows or brakes.

Here's the CMS table of the multiple fixes and changes that have occurred:

At the top of the table, there were rate cuts of up to 10% (a 10% reduction cap) in 2018, 2019, 2020.  Then, there were 0 reductions in 2021.  The three years of 15% cap will take place now in 2022, 2023, 2024.   The 15% in CY2022 will apply to any downward cuts remaining based on the original (2018, 2019, 2020) fee schedule.   The 15% cuts in 2023 and 2024 will apply to the first two years of the next triennial schedule for 2023, 2024, 2025.

Here's where I think it is confusing.  The table says the reduction cap is 0% for 2021 (meaning prices stayed the same) and the reduction cap is "0%" in 2025.   I'm not sure this is correct, I think that the reduction caps expire altogether at the end of 2024, and there actually is "no cap to the reduction" or "no limit to the reduction" in 2025.   

CMS itself says in the accompanying text that the payment may not be reduced year to year by more than 15% in 2022, 2023, 2024.   CMS doesn't say in the text there is any rule (nor any cap) for 2025.   If I'm reading this correctly, the last row, far right box for 2025 should say "no reduction limit" rather than "0% cap."

The law has been changed variably in different places and different times, so it's not easy to know for sure.