PAMA Reform

ACLA is urging Congress enact long-term reform to correct flaws in the implementation of the Protecting Access to Medicare Act (PAMA), passed by Congress in 2014 to reform the Medicare Clinical Laboratory Fee Schedule (CLFS). Congress intended for private market data collected from all types of laboratories, including hospital outreach laboratories, independent laboratories, and physician office laboratories, to be the basis for CLFS payment rates. Unfortunately, the first round of data collection captured fewer than 1 percent of laboratories, artificially reducing laboratory test payments.

The result has been three years of up to 10 percent cuts for 75 percent of laboratory tests, amounting to $3.8 billion in payment reductions for the most commonly ordered test services for Medicare beneficiaries. Bipartisan leaders in Congress have been striving to protect patient access to clinical laboratory services and have effectively raised awareness on Capitol Hill about the need for long-term relief from PAMA cuts. Congress, on a bipartisan basis, has intervened five times to prevent further PAMA cuts. However, cuts of up to 15 percent will resume January 1, 2026, absent congressional action.

If imposed, these steep Medicare cuts for clinical laboratory services could reduce patient access to testing and impede research and innovation in the next generation of laboratory services that can improve and save lives. These cuts would also undermine the nation’s testing capacity and infrastructure that is critical in times of health emergency, day-to-day care, and essential to meeting the growing health care needs of the country, including in medically underserved communities.

ACLA is proposing a sensible, long-term solution that would provide payment stability and predictability for the Medicare program, simplify data reporting processes for clinical laboratories, and facilitate investment in innovative diagnostics. ACLA’s proposal is a commonsense pathway forward to protect patient access to innovative laboratory testing services by addressing the most significant flaws of PAMA, and recognizing increasing cost pressures on laboratories, including compliance with FDA’s onerous new rule to regulate laboratory developed testing services as medical devices.

Join the Stop Lab Cuts campaign. Clinical laboratories along with many provider, patient, and consumer stakeholder groups are coming together to advocate for sustainable Medicare rates for laboratory services. The Stop Lab Cuts campaign advocates for a long-term solution to ensure patient access to laboratory testing services, protect the nation’s clinical laboratory infrastructure, and support innovation in testing to advance the next generation of personalized care.

Visit StopLabCuts.org to learn more.

Updated September 2024