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Hopes for Permanent PAMA Relief Dashed

by | Jan 10, 2023 | News, Open Content

Though the federal spending bill passed at the end of December offers another year’s reprieve from PAMA price cuts, SALSA was not included.

The lab industry will need to wait a little longer for permanent relief from Protecting Access to Medicare Act of 2014 (PAMA)-related price cuts after Congress cut the Saving Access to Laboratory Services Act (SALSA) from the omnibus federal government spending bill passed Dec. 23.

Among other benefits to the lab industry, SALSA, a bipartisan bill introduced last summer, would have required the Centers for Medicare & Medicaid Services (CMS) to use “a more statistically reliable representative sample of lab test prices to determine CLFS reimbursement rates,” leading to fairer reimbursements for lab services, according to coverage in G2’s January 2023 Lab Industry Report.  

The main issue with PAMA is not its aim to ensure that Medicare Part B pays the same prices as private payors for lab services in the markets in which those services are provided, but in how CMS determines those prices. Because CMS did not include community and hospital-based labs when calculating market rates, they wound up with artificially deflated prices, according to previous G2 coverage.

Due to the negative financial impact to many labs from the COVID-19 pandemic, Congress had delayed the implementation of the latest PAMA price cuts each year for the past three years to spare labs further hardship. SALSA, however, would have finally rectified this key controversy permanently, but Congress cut it from the spending bill due to the projected costs of the legislation.

However, labs will at least see another temporary reprieve from PAMA price cuts, with the passage of the $1.7 trillion federal spending bill including another year’s delay in the cuts originally slated to take effect on Jan. 1. But the fate of SALSA remains up in the air as we head into 2023.

For more insight, see the full report in our January 2023 Lab Industry Report. Sign in with your account or sign up for a free trial.