Protecting Access to Medicare Act & Laboratory Compliance & Reimbursement

Thoughtware Alert Published: Feb 17, 2022
Doctors writing down notes

The U.S. House of Representatives passed the Protecting Access to Medicare Act of 2014 (PAMA) to replace payment rates for physician services in Medicare. The act states every three years applicable laboratories need to report their private payor rates for a specified data collection period. For an advanced diagnostic laboratory test, the private payor rates are reported annually. In December 2021, changes were made for the next reporting cycle.

What types of lab providers are impacted? Hospital laboratories that bill on a 14x Type of Bill (TOB) are required to complete qualification tests to determine if they need to submit the applicable information to the CMS.

Who is required to participate? Hospitals that are certified based on the Clinical Laboratory Improvement Amendment (CLIA), bill 14x TOB using the hospital’s NPI, and meet the “Majority Medicare Revenues” and “Low Expenditure” thresholds must participate.

What is the impact of noncompliance with submission requirements? Failure to report could result in a $10,000-per-day penalty.

When do the changes go into effect? On December 10, 2021, Congress announced the next reporting period will be January 1, 2023, through March 31, 2023. The specified data collection period will be January 1, 2019, through June 30, 2019.

What is required to be submitted? The median final reimbursement for the Clinical Laboratory Fee Schedule (CLFS) for all payors except for traditional Medicare/Medicaid must be submitted. 

How will reimbursement be affected? Medicare will adjust reimbursement based on the median final reimbursement data submitted. One industry report indicates a 10 percent reduction to the CLFS.

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