Starting in July 2019, to comply with PAMA, medical laboratories are expected to analyze their private payer price data to help ensure clean, complete, and accurate reporting by March 31, 2020

Collect. Analyze. Report. Simple enough, except that the devil is in the details, according to experts who conducted a special, daylong PAMA private payer price reporting workshop following the 24th Annual Executive War College on Clinical Laboratory and Pathology Management (EWC) held in New Orleans.  

Tasked with the PAMA private payer price reporting exercise every three years, clinical laboratories face possible fines and penalties for not complying with the expectations of the Protecting Access to Medicare Act of 2014 (PAMA).

The Centers for Medicare and Medicaid Services (CMS) did not implement fines with the first round of reporting, but that could change this round, noted Lâle White, Executive Chairman and CEO of XIFIN Inc., a healthcare IT company. White offered perspectives on PAMA’s impact to medical labs during EWC earlier this week.

“In this second period of data collection, it’s becoming even more important for us to collect data accurately, precisely, and provide nearly perfect information on this because we can see the impact is fairly significant to our industry, and with payers ratcheting down their pricing, it’s becoming even more significant,” White said.

The daylong workshop dedicated to PAMA compliance featured legal and informatics experts, consultants, and also laboratory healthcare executives who shared lessons learned from the previous reporting cycle.

Sarah Simonson, Director of Client Management at Change Healthcare, advised labs to test their data extraction process now; produce a small sample of full data; then collaborate to filter out the exclusions, such as Medicaid and self-pay, among others. Simonson also recommends that labs designate a project champion.

Diana Voorhees (above), Principal/CEO for DV and Associates Inc., notes that “One benefit of the PAMA price reporting process is it can help labs identify coding errors that may not have been detected.” Voorhees was a presenter at the PAMA private payer price reporting workshop. (Photo copyright: DARK Daily.)

Things Clinical Labs Should Watch for During the Validation Process

Looking forward, July 1, 2019, marks the start of the data validation period. Here are some things labs should focus on and look out for.

Payments that are not applicable: These would include test codes paid under Medicare’s Physician Fee Schedule; denied ($0.00) payments; unresolved appeals; capitated payments; and payments where the associated test volume cannot be determined.

For example, when a private payer denies payment for a laboratory test, payments of $0.00 or “zero dollars” are not considered a private payer rate for purposes of determining applicable information under the new Clinical Laboratory Fee Schedule (CLFS), according to CMS. Laboratories should not report “zero dollars” for a laboratory test code where a private payer has denied payment within a data collection period.

Very low payments: Data reporters may be tempted to exclude very low payments. However, Joyce Gresko, JD, a Partner in the firm Alston and Bird LLP, based in Washington, DC, cautions that this choice may trigger civil monetary penalties. PAMA gives CMS the authority to issue civil monetary penalties if labs fail to report data, or if they misrepresent or omit reported data, according to CMS’ website.

Look outside the data collection window: While CMS specifies that labs report payments received between Jan. 1, 2019, and June 30, 2019, there may be important and related test data points prior to and after those dates, says Craig Young, Senior Financial Analyst for XIFIN. The adjudication date is key to helping report correctly, he said.

When in doubt, leave it out: Young emphasized double checking that payers have stated the unit correctly to help ensure the correct volume will be reported per test, per price. And he adds, when in doubt, leave it out, but be prepared to defend yourself if you do.

CMS Administrator Seema Verma Hints at the Possibility of Audits

CMS requires independent laboratories, physician office laboratories, and hospital outreach laboratories that meet the current definition of “applicable laboratory” under PAMA regulations to report specific information. This includes laboratory test HCPCS (Healthcare Common Procedure Coding System) codes, associated private payer rates, and volume data that corresponds to each private payer rate. The data reporting period starts Jan. 1, 2020, and continues through March 31, 2020. 

PAMA is particular in that it regularly resets the rates that Medicare pays for clinical diagnostic laboratory tests under the CLFS based on the data that labs submit. For the initial implementation of PAMA price reporting, CMS did not independently verify the accuracy of labs’ self-determination, but CMS Administrator Seema Verma recently made some provocative statements concerning analyzing claims data.

The CMS is “working to automatically detect claims that have inappropriately unbundled the panel tests,” Verma wrote in a letter to Senate Finance Chair Chuck Grassley (R-Iowa). As Modern Healthcare reported, “[CMS] is scrutinizing lab test bills submitted to Medicare to make sure the government hasn’t been overpaying laboratories because of inappropriate coding.”

Mining private payer price datasets out of billing systems can be tedious, difficult, and the data may be overwhelming, said Trish Hankila, Vice President of Finance for South Bend Medical Foundation in South Bend, Ind., one of the EWC PAMA presenters. Hankila advises running a global report to determine the scope of the project. Ultimately, diligence is required, and labs will benefit from developing their PAMA team as soon as possible. 

Liz Carey

Related Information:

Feb. 27, 2019 CMS Guidance

Verma Says CMS Is Working to Fix Inappropriate Lab Test Billing

CMS Administrator Seema Verma Letter to Senate Finance Chair Chuck Grassley

Senate Finance Committee Chairman Chuck Grassley on Medicare Overpayments on Lab Services