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PAMA Data Reporting Begins January 1

Beginning on January 1, 2017, the Protecting Access to Medicare Act (PAMA) will require certain laboratories to submit private payor rates for clinical laboratory tests. The CAP developed pathology specific PAMA resources, including an informative infographic and podcast, to help laboratories understand regulatory requirements and upcoming deadlines. These resources and additional tools can be found here.

The 2014 PAMA law reformed how Medicare calculates reimbursement for clinical laboratory services. PAMA requires the Centers for Medicare & Medicaid Services (CMS) to use the private payor data submitted by laboratories to set payment rates on the clinical laboratory fee schedule (CLFS) starting in 2018 with any reductions in rates limited to the following:

• 10% during the first three years
• 15% over the next three years

The CAP's podcast on the PAMA-Mandated Reporting Rules for Clinical Laboratory Services, led by the Economic Affairs Committee vice-chair W. Stephen Black-Schaffer, MD, FCAP, provides additional background and discusses what pathologists and laboratories need to know about PAMA. The podcast is available for download.

Applicable laboratories must report the required information for all payments received from private health insurers for specific clinical laboratory tests provided between January 1, 2016, and June 30, 2016. The CMS has published a list of 1,300 clinical laboratory services subject to data collection and reporting requirements. Applicable laboratories must then submit the data collected to the CMS between January 1 and March 31, 2017.

Which Laboratories Must Report?

As arrayed in the infographic, an applicable laboratory subject to data collection and reporting is one that bills Medicare Part B under its own National Provider Identifier (NPI). Applicable laboratories required to report must also meet the following threshold requirements based on final paid claims under its NPI:

• Received more than 50% of its total Medicare revenues from the Medicare clinical laboratory fee schedule (CLFS) and physician fee schedule (PFS), and
• Received at least $12,500 in Medicare revenue for CLFS services during a six-month data collection period.

Applicable laboratories must also be Clinical Laboratory Improvement Amendment (CLIA) certified. The CAP's infographic further explains how the CMS defines an applicable laboratory that must report private payor data.

Laboratories that do not meet these requirements will not have to collect and report data, but will be paid at the new CLFS rates effective in 2018. The payments will be based on the weighted median of private payor payments reported.

The CMS believes that approximately 95% of all physician office laboratories and about half of independent laboratories will not fall under these requirements.

For laboratories that are required to report, the CMS can levy penalties of up to $10,000 per day for each failure to report, misrepresentation of data, or omission in reporting.

What Data Must Be Reported

Applicable laboratories are required to report "applicable information" which contains three components:

• The Specific Health Care Common Procedure Coding System (HCPCS) code associated with the test
• Private payor rate for each tests for which final payment has been made during the data collection period
• Associated volume for each test

For PAMA purposes, a private payor is a health insurance issuer and group health plan (eg, a commercial health plan), a Medicare Advantage plan under Part C; and a Medicaid managed care organization.

Final Amounts paid by private payors include:

• Payments from secondary insurers
• Patient cost sharing amounts
• Multiple payment rates for the same test
• Resolved appeals
• Non-contracted, out-of-network laboratory payments including any patient cost sharing amounts

Regarding patient cost sharing, the private payor rate is 100% of the private payors' fee schedule amount for that test. For example, if that amount is $100 and the patient has a $10 copayment, $100 is reported.

If an applicable laboratory receives more than one payment rate from the same private payor for the same test, or more than one payment rate from different private payors for the same test, each unique payment rate and associated volume is to be reported.

Non-contracted amounts for out-of-network laboratories or services are to be reported.

How to Report the Data

Under PAMA, laboratories must appoint two separate people to be the data submitter and data certifier. Check out this resource for more details on data submission and certification process.

Download additional details available on the CMS' website.