Just a few weeks ago, the OIG issued its annual report on PAMA and lab test spending at CMS - see report here, see blog here. While the main goal of the report was to examine the impact of PAMA lab test pricing changes on utilization and sepnding, the OIG report also gave quite a bit of attention to the rapid growth of molecular testing. MoPath spending rose from circa $500M in CY2017 to circa $1B in CY2018.
Meanwhile, COVID legislation last spring both delayed the implementation of the next three-year PAMA cycle, AND also asked the federal advisory body MEDPAC to study PAMA and report back to Congress. I think the lab community largely viewed this congressional request to MEDPAC as a good thing, hoping MEDPAC would scold CMS for rules that lowered lab test pricing and for creating a data system that was more burdensome than necessary. (The MEDPAC report had circulated previously as part of the LAB ACT, a PAMA delay bill last winter; here.)
MEDPAC is well underway with its report on PAMA and lab tests, and it's not all good news. An interim report was presented last week - written by MEDPAC permanent staff and presented to the dozen experts who are the MEDPAC panelists. (Note - the panelists have variable acquaintance with the world of Medicare laws and policies).
- See MEDPAC agend here, powerpoin here, and transcript here.
- Transcript on PAMA is lengthy, about page 144-203.
The report discussed the basics of PAMA, but also noted that molecular spending rose by a lot, doubling from 2017 to 2018. Panelists asked a range of questions, such as whether CMS had policies to constrain utilization growth, and whether PAMA should set prices to something lower than the median, e.g. the 25th not the 50th percentile of commercial prices. Overall, there were a lot of references to "expensive tests."
One panelists suggest that since genomic pricing falls, CLFS prices should automatically deflate.
Another panelist suggesting that the pricing of "commodity tests" and genomic tests were so different that different rules should apply.
Another suggest CMS institute "competitive bidding" for lab tests. (While CMS does source some DME products by competitive bidding, Congress and CMS tried a demo project for lab competitive bidding around 2007/2008 and it collided with lawsuits.)
Overall, I suspect lab industry viewers watching online were looking at their watches and just waiting for this discussion period to end.
In another part of the discussion, MEDPAC discusses whether telemedicine visits should allow ordering of lab tests, and if so, only for established patients.
The deck PowerPoint covers the basics, sort of a PAMA 101, most of the interest is in the discussion in the transcript.
Panelists noted that MEDPAC is asked not only to opine on the CMS implementation rules and data burdensomeness, but "other topics" MEDPAC finds appropriate.
MEDPAC may have an interim presentation next spring on its PAMA findings and recommendations; the report to Congress is due next summer.
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I believe one version of the LAB act, PAMA delay, had the Hill requesting a PAMA report from National Academy of Medicine, but the passed legislation gave the report to MEDPAC, an organization that favors frugality in its reports.
