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Lab Act Passes, But Cuts Can Continue

Federal Insider: March 2020

In a victory for AACC and other laboratory advocacy groups that supported the legislation, Congress passed the Laboratory Access for Beneficiaries (LAB) Act, which could fix what advocacy groups say are serious deficiencies in data collection for the Protecting Access to Medicare Act (PAMA). So far PAMA has resulted in significant cuts to federal reimbursement for many clinical laboratory tests. Cuts are based on the Centers for Medicare and Medicaid Services (CMS) assessment of private payer rate data reported by laboratories.

The LAB Act delayed by 1 year the requirement for laboratories to report data on private payment rates to CMS and will commission a study by the Medicare Payment Advisory Commission (MedPAC) on how to improve data collection and rate setting.

However, CMS is still able to move ahead with possible cuts to the clinical laboratory fee schedule in 2021—based on data collected in 2017. This year’s cuts are capped at 10%, but CMS can cut up to 15% each year in 2021, 2022, and 2023.

Prior to passage of the bill, AACC had warned Congress that failing to suspend data reporting would “significantly jeopardize seniors’ access to vital laboratory benefits in 2020 and beyond.” The association also noted that due to the flawed implementation of PAMA, “CMS continues to rely on data from less than 1% of the nation’s laboratories, an error that has already led to severe cuts to the most common routine lab tests—some of which will exceed 30% when fully implemented.”

PAMA already is having serious consequences for access to clinical laboratory testing. Notably, the Infectious Diseases Society of America found in a survey that more than 79% of respondents would be unable to provide the full range of testing needed to rapidly diagnose infectious diseases following the PAMA cuts of 2018 and 2019.

CMS Broadens Coverage of NGS Testing

The Centers for Medicare and Medicaid Services (CMS) expanded its coverage of next-generation sequencing (NGS) testing for patients with germline ovarian or breast cancer after advocacy and medical groups, including AACC, urged the agency to make changes to an earlier, more restrictive draft policy.

AACC had criticized the first draft of the policy for only covering tests approved or cleared by the Food and Drug Administration (FDA). “We are perplexed by this recommendation given that there is no FDA cleared or approved NGS test for hereditary risk assessment of either condition on the market,” the association wrote in a letter to CMS.

The final policy does automatically cover appropriately ordered NGS testing only if FDA cleared or approved; however, it allows Medicare’s regional contractors to develop their own policies that cover laboratory-developed tests and accommodate other scenarios not spelled out in the national coverage decision memo.

Federal Health IT Plan Focuses on Patient Access

The Department of Health and Human Services (HHS) draft 2020-2025 health information technology plan outlines the administration’s goal to put the full weight of the government’s policymaking behind promoting patient access to, and use of, electronic health information. Embedded in the plan is also the administration’s goal to increase transparency around pricing—even negotiated private payer rates—a subject that’s controversial among hospital and healthcare groups, but which the administration believes can help lower costs.

According to HHS, the goal of the plan is to “ensure that individuals have access to their electronic health information to help enable them to manage their health and shop for care.”

The plan emphasizes the goal to accelerate the use of secure mobile apps, patient portals, and other tools. To do this, HHS is calling for public and private collaboration that will: improve portability of health information through application programming interfaces; improve access to smartphones and other technologies, especially for at-risk, minority, rural, disabled, and tribal populations; and build the evidence base around the use of health information technology, including on the types of information that benefit patients most and the best ways to present information to patients and caregivers.

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