PAMA Update: Status Report on Implementation of New Medicare Fee Schedule for Part B Lab Tests

Changes to Medicare Part B payment for lab tests under the Protecting Access to Medicare Act of 2014 (PAMA) take effect on Jan. 1, 2018. Less than 15 months from the deadline, 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 new payment system. Here is what lab managers need to know about the report to keep on top of the PAMA implementation process.

The Implementation Timeline
Implementation of the new system for establishing Medicare price rates on lab tests is in full swing and the pace is about to pick up. Here is a review of key dates along the way to final implementation:

• October 2016: CMS to complete independent validation of data collection system and make it 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 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 Six Implementation Tasks and the Progress Being Made on Each
A good way to get a grasp of what is going on 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 with regard to each one so far, as summarized by the chart below.

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 (See "CMS Responds Positively to Requested Changes in Final PAMA Rule," LIR, July 7, 2016, p. 4);
2. Getting ready to register on the CMS's new data collection system when registration begins later this month;
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.