News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

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News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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Medicare officials are including most hospital laboratories in this PAMA data reporting cycle, but hospitals face $10,000/day federal penalties for not filing, filing late, or filing incomplete or inaccurate data

Clinical laboratories operated by hospitals and health systems could prove to be a game changer for the lab industry in this upcoming PAMA private payer lab test price reporting cycle. But that upside comes with risk.

For this reporting period, the federal Centers for Medicare and Medicaid Services (CMS) has defined any hospital laboratory that uses the CMS 1450 14X to bill for Medicare Part B clinical laboratory tests as an “applicable laboratory” under the Protecting Access to Medicare Act of 2014 (PAMA). That means a majority of hospital labs in the United States are required to report the prices they were paid by private health insurers to CMS.

This makes the current PAMA reporting period a high-stakes endeavor, because unprepared clinical laboratories could face federal fines of $10,000/day. The reporting eligibility requirements are broad and may leave unprepared clinical laboratories at significant risk.

The CMS PAMA regulations page states:

“Under the final rule, laboratories, including physician office laboratories, are required to report private [payer] rate and volume data if they:

  • “Have more than $12,500 in Medicare revenues from laboratory services on the CLFS [Clinical Laboratory Fee Schedule]; and,
  • “Receive more than 50% of their Medicare revenues from laboratory and physician services during a data collection period.

“Laboratories will collect private [payer] data from January 1, 2019, through June 30, 2019, and report it to CMS by March 31, 2020.”

In addition to shrinking margins, increased competition, reduced reimbursement rates, and ever-changing regulations, clinical laboratories now face new fines that could prove financially catastrophic for even the largest, most efficient labs.

New Rules and Reporting Requirements Threaten Unprepared Labs

Healthcare reform continues to reshape how healthcare is both delivered and billed across the country. GenomeWeb reported in 2017 that CMS expects PAMA to save the government $3.93 billion by 2028.

While medical laboratories continue to grapple with the impact of reduced reimbursement rates under PAMA’s revised CLFS final rule, the new rules for what constitutes an “applicable lab” and the new reporting requirements that started January 1, 2019, add yet another level of complexity to reporting and compliance concerns.

Rodney Forsman, Assistant Professor Emeritus of Lab Medicine and Pathology at the Mayo Clinic College of Medicine, in Rochester, MN, told Dark Daily that “Laboratories must work to identify reporting concerns, billing and IT limitations, and identify current statutes and limitations to present to compliance officers and stakeholders. Failure to do so could leave labs liable for fines of up to $10,000 per day.”

Compliance Will Be a Team Effort

He further emphasizes that compliance with reporting requirements will involve a range of stakeholders within the hospital and its laboratory. Information technology (IT) teams, compliance officers, laboratory C-suite executives, and billing departments all will play a role in implementing the changes needed and reporting the data required.

Therefore, understanding exactly what regulations require—and what is at stake—is crucial to not only implement critical changes, but to ensure that the lab understands and is on-board with said changes.

Considerations include:

  • Understanding the new collection and reporting periods;
  • Assessing billing and IT limitations in relation to reporting requirements; and,
  • Implementing proper data capture and validation systems ahead of data submission.

To help hospital laboratories, independent clinical laboratories, and stakeholders prepare for these recently enacted requirements and avoid substantial fines, Forsman and Brian Kemp, Vice President of Change Healthcare, headquartered in Nashville, TN, will co-present a 90-minute webinar, titled, “PAMA in 2019: What Labs Need to Know to Collect Data, Report on Time, and Avoid $10,000 per Day Penalties.”

Rodney Forsman (left), Assistant Professor Emeritus of Lab Medicine and Pathology at the Mayo Clinic College of Medicine, and Brian Kemp (right), Vice President of Change Healthcare, stress that a current understanding of PAMA’s impact is crucial and that clinical laboratories are at considerable risk if they are not compliant with the latest PAMA requirements. (Photo copyright: Dark Daily.)

This important webinar will include:

  • A brief overview of PAMA;
  • The latest updates to PAMA reporting requirements; and,
  • Actionable information for applicable labs required to meet them.

The speakers will also cover concerns for hospital outreach programs and specific CMS 1450 14X Type of Bill (TOB) billing changes to help hospital COOs, CFOs, CIOs, contract officers, and compliance officers understand the latest implications of ongoing PAMA requirements.

Laboratory directors, managers, administrators, and IT and billing staff will want to attend this critical webinar to learn essential PAMA reporting considerations and pitfalls to avoid.

(To register for this critical Feb. 20th webinar, click here. Or, copy and paste this URL into your browser:

—Jon Stone

Related Information:

PAMA in 2019: What Labs Need to Know to Collect Data, Report on Time and Avoid $10,000 per day Penalties

PAMA’s Impact on Laboratory Margins

PAMA and Bundled Payments Force Labs to Feel a Reimbursement Shift

CMS 2018 PAMA Pricing Cut for Lab Tests Deeper than Prior Estimate; Advanced Dx Lab Tests Fare Well

Laboratories Take Aim at Proposed PAMA 2018 Medicare Rates for Tests

2018 Medicare Payment Cuts for Clinical Testing

Hospitals Need to Be Aware of CMS Changes to PAMA

CMS Issues PAMA Final Rule That Aims to Cut Medicare’s Clinical Laboratory Test Price Schedule Sharply Beginning in 2018

PAMA Reporting Penalties Can Be Substantial for Laboratories