It’s Time for All Laboratorians to Become Political Activists: Fight for Your Life Against PAMA!

We all know that there has been a minor slip in net revenue per test for clinical laboratories over the last couple of years.  This is nothing new—it is consistent with a story of declining reimbursements in healthcare.Under the proposed Protecting Access to Medicare Actof 2014 (PAMA) rule, hospital laboratory reimbursement for outpatients and outreach could be reduced by 42 percent in 2017.  What is new is that under the proposed Protecting Access to Medicare Actof 2014 (PAMA) rule, hospital laboratory reimbursement for outpatients and outreach could be reduced by 42 percent in 2017.

At $19.79 per test on average based on our Fourteenth Comprehensive Laboratory Outreach Survey, hospitals are paid 36 percent more than Quest and LabCorp at $14.65 and $14.52, respectively.  Many know that hospitals are currently reimbursed on a different, higher fee schedule than independent laboratories based on the assumption that hospitals have a higher cost of operations.  Continue reading

Action Needed to Avoid the Impact of Medicare Payment Reductions on the Laboratory Industry

With Medicare spending for clinical laboratory services totaling $9.7 billion and $7.0 billion in 2013 and 2014, respectively, it is not surprising that the federal government has identified this area as a prime cost reduction target. The Protecting Access to Medicare Act of 2014 (PAMA) represents the most disruptive change to laboratory payments in decades because the current laboratory payment rates, which are based on 1984 cost data (updated sometimes for inflation), will be replaced with market-based rates, defined as the calculated weighted median private payer rate for each test. The new rates will begin on Jan. 1, 2017, with large rate reductions phased in over several years. These reductions have the potential to substantially affect hospital operating revenue. Continue reading