Monday, June 27, 2022

Very Brief Blog: Congress Considers Legislation to Fix PAMA Lab Pricing

 A brief heads-up blog.  ACLA and other lab stakeholders support, and Congress has introduced, a legislative fix for PAMA called "SALSA" - Saving Access to Laboratory Services Act.

  • Open coverage at 360Dx here.
  • News at XIFIN, here.
  • Press release from NILA, here.
  • Press release ("two pager") from ACLA, here.  Advocacy page from ACLA, June 30, here.
  • News from Congr. Pascrell (NJ) here. (Wednesday, June 22, 2022).

The most complete analysis is at the ACLA two-pager, linked above.  It's now also posted at CONGRESS.GOV, as S. 4449, here.

From ACLA's two pager, key bullets are:

  • Use statistical sampling instead of reporting billions of transactions.
  • Guardrails against too-rapid payment reduction.
  • Exclude Medicaid managed-care rates.
    • By law, Medicaid rates can't exceed Medicare rates, so these could only pull downward.  Manually-processed claims would also be excluded from PAMA.
  • Report every 4 years (not every 3).

PAMA Sometimes Yielded Crazy Rates on New Codes

PAMA sometimes yielded crazy rates especially on more recent codes.  For example, in 2017, CMS paid about $2500 for BRCA testing (81162) and $931 for 81432 (BRCA and related genes panel.)  But 81432 priced at $136 via PAMA, a crazy price unrelated to costs.   81435, Lynch colon cancer panel, was being paid at $802 on the CLFS, but got a $37 price under PAMA - even crazier.  The impact of these lunatic PAMA results was tempered by the guardrails on the speed of annual price reductions.  Oops:  SALSA limits rate decreases to 5% or less, but also, caps rate increases to 5%.   This means the Lynch gene code priced at $37 would never normalize to the $500 range (rising at 5% a year from $37; 54 years to reach $500).  
History tidbit.  PAMA comes from March 2014; in 2008, an effort to replace lab pricing by competitive bidding was stopped in court - here.

SALSA Support:

Representatives Bill Pascrell (NJ-09), Richard Hudson (NC-08), Scott Peters (CA-52), Kurt Schrader (OR-05), and Gus Bilirakis (FL-12) introduced companion legislation in the U.S. House of Representatives on June 22, 2022.

Senator Richard Burr (R-NC), Ranking Member of the Senate Committee on Health, Education, Labor and Pensions (HELP), and Senator Sherrod Brown (D-OH) introduced the Saving Access to Laboratory Services Act, bipartisan legislation to update Medicare’s payment system for clinical diagnostic laboratory services, ensuring seniors have access to the most innovative tests and treatments on the market.