The Protecting Access to Medicare Act (PAMA) ushered in a new clinical laboratory fee schedule (CLFS) that could reduce Medicare payments up to 30% over the next 3 years.

Learn how you can survive—and thrive—in this uncertain payment climate by attending (34104) Are Your Lab Tests Viable under PAMA Medicare Reimbursements? This scientific session will take place from 10:30 a.m. to noon August 1 at the 70th AACC Annual Scientific Meeting & Clinical Lab Expo in Chicago.

PAMA went into effect this year, creating a single national fee schedule that rebases lab fees to reflect lower private sector rates.

As the March issue of Clinical Laboratory News highlighted, some laboratories and types of tests will fare better than others under the new CLFS. Labs with the most financial security, operational efficiencies, and strategic diversifications may have a leg up over smaller labs and those that receive most of their testing payments from Medicare and Medicaid. Some labs expect they might be out of business in a few years.

Syncing a test’s cost with its reimbursement is a key tool for thriving in the healthcare marketplace. During the session, Michael Baisch and Matthew Clark, principal systems engineers with the Mayo Clinic Department of Laboratory Medicine and Pathology, will inform participants on how they can put together a test budget that aligns with PAMA’s reimbursement plan and identify both high-level test cost structures and cost savings to improve a lab’s viability. They’ll also teach strategies for addressing supplies and materials and bench labor cost overruns.

There are seven primary components to consider when determining the cost of a test a test, according to Baisch and Clark. These include: bench labor, supplies and materials, scientist labor, equipment, overhead, royalties, and net contribution.

Bench labor and supplies and materials represent the largest expenses for a laboratory and thus, are the largest contributors to the cost of a test. “However, there are significant portions of either cost component that often go overlooked,” according to the presenters. Time management is often a key missing element with bench labor. “For supplies and materials, consideration is given to the primary reagent(s) that are consumed during testing, but we often overlook reagent loss and ancillary supply items,” they explained.

Other cost components are often overlooked completely or not seen as a significant contributor to the cost of a test. “However, it’s not uncommon to see a test have a 60-40 split between the two primary cost components and the remaining components,” they added.

The presentation will include two primary sections: creating and understanding a test budget, and strategies to address what happens when a test exceeds its budget.

The first section will focus on:

  • Defining cost components and what should be included in each cost component;
  • Why Medicare reimbursement is a good standard for setting the budget;
  • Guidelines for choosing a cost component; and
  • A walkthrough of a case study.

The second section will focus on:

  • Actions that can be taken to address supply, material, and bench labor concerns; and
  • High-level actions that can be considered to address concerns for the other cost components.

“The strategy section of the presentation will primarily focus on actions that laboratory leadership can take to address supply and material expenses and bench labor expenses. We will touch on some of the other cost components as well but at a more general awareness level,” Baisch and Clark said.

Register today for the 70th AACC Annual Scientific Meeting & Clinical Lab Expo in Chicago and earn 1.5 CE hours by attending this morning scientific session.