Lab Impact of the Protecting Access to Medicare Act
On April 1, 2014 the Protecting Access to Medicare Act (PAMA) was signed into law. Section 216 of the act transforms the Medicare reimbursement system for clinical labs. This is the first major reformation of the Clinical Laboratory Fee Schedule since it was first introduced in 1984.
Clinical diagnostics account for 80% of all clinical decisions and as such is a critical component of quality healthcare delivery. Yet diagnostic tests consume just under 3% of total US healthcare spend. According to market research estimates, the total global market is $54 billion dollars.
The PAMA will change the current reimbursement model to market-driven reimbursement based on the weighted median of the payment rates for private payers for a given test. The objective is to ensure that the Centers for Medicare and Medicaid (CMS) reimburse labs at the lowest possible amount in an effort to lower CMS lab costs. This will impact several lab market sectors, including large clinical labs such as Quest Diagnostics and LabCorp and medium and smaller labs that have greater service Medicare patients. As important, it will impact new molecular, nex-gen sequencing, genetic and routine tests differently.
To learn more about the impact of this important legislation on various segments of the clinical diagnostic industry, please contact your Zintro representative and schedule an individual consult.