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Whatever Happened to Those Part B Lab Test Spending Reductions?

by | Feb 17, 2022 | Articles, News

The Protecting Access to Medicare Act (PAMA) was supposed to significantly reduce Medicare Part B lab tests spending. But it hasn’t happened. In FY 2018 and 2019, the first two years under the PAMA system, Medicare payments under the Clinical Laboratory Fee Schedule (CLFS) actually increased. The latest results follow the same pattern with overall […]

The Protecting Access to Medicare Act (PAMA) was supposed to significantly reduce Medicare Part B lab tests spending. But it hasn’t happened. In FY 2018 and 2019, the first two years under the PAMA system, Medicare payments under the Clinical Laboratory Fee Schedule (CLFS) actually increased. The latest results follow the same pattern with overall year-over-year spending on lab tests increasing by 4.2 percent from $7.7 billion to $8.0 billion, according to a Dec. 30 OIG report.

The FY 2020 spending figures are in line with the average annual increase of 4.3 percent over the past five years. But this time there were actual declines in spending on non-COVID-19 tests. The FY 2020 increases, in other words, were driven by COVID-19 tests, which weren’t even a thing before the pandemic. In 2020, Medicare Part B spent $1.5 billion on COVID-19 tests, roughly 19 percent of all lab test expenditures.

At $4.99 billion, Medicare Part B spending on the top 25 tests increased by eight percent in 2020. After not existing in 2019, four different COVID-19 tests cracked the top 25 in 2020, including the rapid COVID-19 test (procedure code U0003) that was number one on the list, with $1.02 billion paid for more than 10 million of the tests. This marks the first time a new test entered the top 25 as the number one test since OIG began monitoring spending on the top 25 tests in 2014, the report notes.

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