PAMA Update: OIG Status Report on Implementing New Medicare Fee Schedule for Part B Lab Tests

Transition to the new Medicare Part B payment system for lab tests under the Protecting Access to Medicare Act of 2014 (PAMA) is in full swing and about to heat up. With D-day set for Jan. 1, 2018, the Office of Inspector General (OIG) just issued a report documenting the progress the Centers for Medicare and Medicaid Services (CMS) is making in implementing the different aspects of the new payment system. Here is what lab managers need to know about the report to keep on top of their own PAMA implementation efforts.

What CMS Has Done So Far
CMS has already reached a few of the most important implementation milestones: In December, it completed the IT system that labs will use to report their private payer data; and on June 17, 2017, it issued the final rule. And as we reported last month (see GCA, Sept. 2016, p. 5), CMS has since issued guidance materials on the final rule, including:

• The HCPCS reporting codes;

• Guidance for collecting and reporting private payer data; and

• The data reporting template.

The Remaining Implementation Timetable
As a lab manager, you need to be prepared for the next moves. The good news is that the information contained in the new OIG report enables us to outline a pretty definitive implementation timetable:

• October 2016: CMS to complete independent validation of data collection system;

• Late October, Early November 2016: CMS to make system available for labs to begin registering;

• By Dec. 31, 2016: CMS must:
  • Finish educating labs on the new reporting requirements; and
  • Publish guidance describing the new Advanced Diagnostic Laboratory Tests (ADLT) application procedure;

• Jan. 1, 2017: Labs begin reporting of private payer data;

• April to August 2017 (roughly): CMS must:
  • Conduct testing to verify the accuracy and completeness of reported data; and
  • Use the data to calculate preliminary pricing rates;

• September 2017: CMS to publish preliminary pricing rates and seek public input on their accuracy;

• November 2017: CMS to finalize pricing rates;

• Jan. 1, 2018: New pricing rates take effect.

The 6 Implementation Tasks and the Progress Being Made on Each
A good way to monitor progress is by considering the six discrete things CMS must do to implement the new PAMA lab fee schedule. The OIG report explains what each of these "tasks" involves and describes the progress CMS has made on each one so far, as summarized by the chart on page 9.

PAMA Briefing: Current Status of Part B Payment Changes
Implementation Final Implementation Deadline: Jan. 1, 2018

Takeaway: 5 Things You Should Be Doing to Get Ready for PAMA. At this point, there are five things labs should be doing to get ready for the new Medicare Part B lab test payment system:

1. Familiarizing themselves with the Final PAMA Rule;
2. Getting ready to register on the CMS's new data collection system when registration begins;
3. Looking out for the two sets of materials CMS intends to release by year's end before reporting begins on Jan. 1, 2017:
   • Educational materials explaining the payer data reporting process; and
   • Guidance explaining the process to follow when applying to have CMS designate a test as an ADLT;
4. Preparing for the release of the preliminary lab test fee schedule in September 2017 and, if warranted, providing feedback on its accuracy; and
5. Being on the lookout for the final PAMA fee schedule which CMS intends to issue in November 2017.