Tuesday, June 15, 2021

MedPAC Releases June Report to Congress; Chapter on PAMA, Lab Pricing

In December 2019 - pre COVID - Congress passed a law that included a delay of the CMS PAMA lab pricing process, while asking the advisory body MEDPAC to look into Medicare's implementation of PAMA law.   MEDPAC flagged some of its early PAMA findings in a PowerPoint presentation to its advisory committee this past April 2.

The MEDPAC PAMA report was due by June 2021, and it's out.  It's part of a bundle of different reports and topics, totaling 403 pp, 40 pp of which are about PAMA and lab pricing.

  • See the full report (403pp) here.  
    • It's a big locked PDF, so you can't note or highlight.  
    • I've put an editable PDF of Chapter 9, the PAMA report, in the cloud, here.
    • You can also get MEDPAC's locked version of Chapter 9 here.
MEDPAC reports that:
  • CMS markedly undersampled hospital and physician labs.
  • CMS and physician labs both were paid substantially more for lab tests than independent labs.
  • If CMS sampled all labs, PAMA prices would rise, but not drastically, since independent labs are such a large market and the median price is fairly robust to sampling changes.
  • MEDPAC is concerned that some innovative high cost labs may have high pricing power with commercial payers.
  • MEDPAC considers possible survey-based methods, based on work by RTI consultancy. [*] 

To my eye, MEDPAC understates the fact that a huge part of the growth of "expensive tests" in 2018, 2019, was due to what the DOJ has alleged are fraudulent claims under Operation Double Helix, which DOJ says tallied $2B in charges, thus swamping out the normal industry for genomic tests.

MEDPAC inserts several pages on the profitability of COVID tests for large suppliers.

Taken as a whole, the 403-page report covers many topics and is summarized in a MEDPAC press release, here.

In its April committee presentation, MEDPAC staff suggested that CMS or Congress consider banning telemedicine genetic test orders.  It was also mentioned in a different context, the March report on telehealth.   That isn't mentioned in the June report today.


[*] MEDPAC states in Chapter 9 p.315 that the full RTI report is on the MEDPAC master website, but I didn't find it yet.