The Senate’s government funding proposal includes a 30-day delay in PAMA cuts, giving clinical labs more time to prepare for reduced Medicare reimbursement rates.
Tucked into the Senate’s government funding proposal is a modest yet impactful measure that gives clinical laboratories a brief reprieve from PAMA reimbursement cuts.
On Nov. 10, the Senate amended and passed a version of a House funding bill, H.R. 5371, designed to reopen the government and allocate funding across multiple agencies. Among its 394 pages is a 30-day stopgap measure delaying PAMA reimbursement cuts, pushing the effective date from January 1 to January 31, 2026.
“While this 30-day reprieve provides welcome relief and demonstrates growing awareness of the impact these cuts have on laboratories and patient access, our work is far from done,” said Clarisa Blattner, senior director of revenue and payor optimization at XiFin, who was among the first to publicly note the extension via a LinkedIn post.
The Senate provision references updates to Section 1834A of the Social Security Act, known internally as Section 6209. The amendment modifies how CMS phases in payment reductions based on private payer data:
The 2026 calendar year is divided into two periods: January 1–30, 2026, and January 31–December 31, 2026, rather than treating the entire year as a single implementation period.
Reporting windows for private-sector payment data, which inform Medicare rates, are also extended. Instead of ending December 31, 2025, the next reporting period will run from February 1 through April 30, 2026.
These changes give laboratories additional time to prepare, gather, and validate private payer data while adjusting to new reimbursement rates—a key operational relief, especially for smaller and independent labs.
Extra Time to Advance the RESULTS Act
G2 Intelligence also reported that the temporary delay also offers the clinical lab industry a critical window to rally support for the RESULTS Act (Reforming and Enhancing Sustainable Updates to Laboratory Testing Services Act). The bill aims to reform PAMA by reducing reimbursement rate cuts, using an independent database for commercial payer reporting, and lengthening intervals between reporting windows.
Industry observers had warned that Congress was unlikely to again delay PAMA cuts, which have been postponed periodically since the pandemic. The 30-day extension is therefore notable, giving laboratories a short but meaningful buffer to continue advocacy and prepare for upcoming rate adjustments.
Looking Ahead
Laboratory leaders can use this window to assess financial impacts, adjust operational plans, and ensure compliance with updated reporting requirements. As CMS continues to refine its private-payer-based payment system under PAMA, this modest delay offers a critical opportunity to stabilize lab operations and maintain patient access to essential diagnostic services.
Clinical laboratory genetic testing labs and telemedicine groups among those charged
In the largest healthcare fraud bust in US history, the US Department of Justice (DOJ) announced it had levied criminal charges against 324 defendants for allegedly participating in various fraudulent healthcare schemes—including clinical laboratory genetic testing and telemedicine fraud—totaling over $14.6 billion in losses.
A DOJ press release states the agency’s 2025 National Health Care Fraud Takedown represents an unprecedented effort to alleviate fraud in healthcare that exploits patients and taxpayers.
The defendants include 96 doctors, nurse practitioners, pharmacists, and other licensed medical professionals. The cases are being prosecuted by Health Care Fraud Strike Force teams from the Criminal Division’s Fraud Section, 50 US Attorneys’ Offices, and 12 State Attorneys’ General Offices.
“This record-setting Health Care Fraud Takedown delivers justice to criminal actors who prey upon our most vulnerable citizens and steal from hardworking American taxpayers,” said Attorney General Pam Bondi in the press release. (Photo copyright: US Department of Justice.)
49 Clinical Lab Defendants Charged
The takedown relied on coordinated investigations from several agencies, including the:
Health Care Fraud Unit of the DOJ Criminal Division’s Fraud Section,
Department of Health and Human Services Office of Inspector General,
Federal Bureau of Investigation,
Drug Enforcement Administration, and,
Multiple US Attorneys’ Offices.
Clinical laboratory testing fraud was addressed in the takedown. Forty-nine defendants were charged with telemedicine and genetic testing fraud schemes where deceptive telemarketing campaigns targeted Medicare beneficiaries, resulting in $46 million in fraudulent claims being submitted to Medicare for durable medical equipment (DME), genetic tests, and COVID-19 tests.
“Make no mistake—this administration will not tolerate criminals who line their pockets with taxpayer dollars while endangering the health and safety of our communities,” said Attorney General Pam Bondi in the press release.
Other High-Profile Cases
The most prominent cases include a $10 billion urinary catheter scheme where foreign straw owners secretly purchased medical supply companies and then used stolen identities and personal health data of more than one million Americans to file erroneous Medicare claims. Known as Operation Gold Rush, the hoax resulted in the arrests of nineteen defendants, including four in Estonia and seven individuals attempting to avoid capture at US airports and at the Mexican border.
In another case involving foreign influence, owners and executives in Pakistan were charged in connection with a $703 million scheme where artificial intelligence (AI) was allegedly used to create fake recordings of Medicare recipients consenting to receive various products. The data was then sold to clinical laboratories and DME companies to fraudulently submit false claims to Medicare. In addition, some of these defendants allegedly conspired to conceal and launder proceeds from US bank accounts to overseas bank accounts.
Also, a defendant who owned a billing company allegedly planned a sham in which Arizona Medicaid was fraudulently billed $650 million for addiction treatment programs where services were never rendered or patients received substandard care. The defendant, who is based in Pakistan and the United Arab Emirates, supposedly received at least $25 million from the scheme and is also charged with a money laundering offense.
“It’s not done by small time operators,” said Mehmet Oz, MD, who leads the Centers for Medicare and Medicaid Services (CMS). “These are organized syndicates who are designing to hurt America.”
Other notable cases include a scam involving $1.1 billion in fraudulent claims for unnecessary amniotic wound allografts for elderly patients resulting in defendants receiving millions in illegal kickbacks. In another scheme, 74 defendants were charged with the illegal distribution of prescription opioids and other controlled substances.
DOJ Property Seizures
As a result of the fraud bust, the US government seized over $245 million in cash, luxury vehicles, cryptocurrency, and other assets and prevented an additional $4 billion from being paid out by CMS due to false and fraudulent claims.
“These criminals didn’t just steal someone else’s money. They stole from you,” Matthew Galeotti, JD, who leads the DOJ Criminal Division, told the Associated Press. “Every fraudulent claim, every fake billing, every kickback scheme represents money taken directly from the pockets of American taxpayers who fund these essential programs through their hard work and sacrifice.”
This latest bust demonstrates the DOJ’s increased resolve to pursue healthcare fraud, including cases involving clinical laboratory testing. Look for further coverage of this aspect in the 7-14-2025 issue of The Dark Report.
Clinical laboratories should take a proactive approach to ensure compliance with current price transparency regulations
Price transparency in healthcare continues to be a focus of the Centers for Medicare and Medicaid Services (CMS). As of this ebrief, the agency has cited nearly a dozen hospitals this year that failed to, wholly or in part, follow through with federal legislation due to technical issues.
The citations, paired with President Trump’s executive order from February on price transparency, demonstrates a growing trend toward costly enforcement.
It’s not clear from the documentation posted by CMS if any of this involves price transparency with clinical laboratory tests. Labs that operate within hospitals or health systems are subject to the executive order; thus, diagnostic test pricing estimates are subject to transparency mandates.
Based on enforcement actions posted online by CMS, it’s clear that the agency is looking into technical issues of price transparency requirements that have little to do with diagnostic medicine. From that perspective, clinical laboratory teams may want to pass this Dark Daily ebrief along to their IT department and business analysts, whose work is drawing criticism from CMS at some hospitals.
The entire lab team should be proactive on the issue of price transparency.
“Imagine how a one-on-one conversation with a patient would go if a physician explained that a routine cholesterol test sent to Lab A would cost five times that of Lab B. Anyone think the patient would choose Lab A?” wrote Bryan Vaughn, senior vice president, health systems and mid-America division, Labcorp, in an article he penned for the lab company’s website. (Photo copyright: Labcorp.)
Hefty Fines and Warnings from CMS
According to CMS, already in 2025, 10 hospitals have received civil monetary penalty (CMP) notices of hefty fines for non-compliance. They include:
Arkansas Methodist Medical Center, Paragould, Ark. $309,738
Northlake Behavioral Health System, Mandeville, La. $257,180
Lawrence Rehabilitation Hospital, Brick, N.J. $120,120
Community Care Hospital, New Orleans, La. $93,214
Hill Hospital of Sumter County, York, Ala. $84,216
Bucktail Medical Center, Renovo, Pa. $75,582
D.W. McMillan Memorial Hospital, Brewton, Ala. $71,852
First Surgical Hospital, Bellaire, Texas $62,016
CCM Health, Montevideo, Minn. $55,611
Southeast Regional Medical Center, Kentwood, La. $32,301
Payments for citations are due 60 days after receiving the CMP notice.
Trump’s Executive Order
CMS’ price transparency focus comes alongside President Trump’s Executive Order 14221, “Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information,” which the administration put out in February of this year, CMS noted.
As covered in the March 31 issue of The Dark Report, a sister publication to Dark Daily, Trump’s order is an expansion of his previous price transparency ruling, which went into effect at the start of 2021.
At that time, hospitals were required to “provide clear, accessible pricing information online about the items and services they provide” that was easy understand and to use, and machine-readable files listing all services and items available, CMS noted.
Impact on Clinical Laboratories
CMS’ updated requirements and refreshed reinforcement against healthcare organizations remain pertinent to hospital laboratories mostly due to extreme variations in test pricing.
“Reports continue to point out wide differences in the prices of routine laboratory testing across settings. Yet, routine lab testing may be some of the most comparable procedures in healthcare, with minimal differences in methods or quality,” wrote Bryan Vaughn, senior vice president of health systems and the mid-America division at Labcorp, in an article he penned for the lab company’s website.
Vaughn cited as much as a $600 difference found between metabolic or lipid panels and other standard lab tests.
It behooves clinical labs to verify that the information they provide to consumers online about test prices is indeed easy to understand and meets the spirit of the executive order and CMS. Failure to do so could be costly to a health system or hospital.
Insurers continued receiving payments even after beneficiaries moved to other states, the paper reported
As Congress considers cuts in Medicaid funding, The Wall Street Journal reported that Medicaid managed care plans received at least $4.3 billion in duplicate payments over a three-year period, due to recipients who moved from one state to another.
Centene, the largest private Medicaid insurer, collected $620 million in duplicate payments between 2019 and 2021, while Elevance Health received $346 million and UnitedHealth Group took in $298 million, The Journal reported on March 26.
All told, more than 270 insurers received duplicate payments. The paper noted that private insurers handle coverage for 70% of the 72 million Medicaid recipients.
“We may be paying premiums on behalf of an individual who might have moved, and we don’t know that they have moved,” healthcare consultant Caprice Knapp, PhD, told the newspaper. “It definitely is wasteful.”
The reporting was based on an analysis of the Transformed Medicaid Statistical Information System (T-MSIS), a database of beneficiary information maintained by the Centers for Medicare and Medicaid Services (CMS).
In response to a Wall Street Journal article about managed care plans receiving billions in duplicate Medicaid payments, Craig Kennedy, chief executive of Medicaid Health Plans of America, noted how heavily regulated the health insurance industry is. (Photo copyright: LinkedIn.)
Multiple States Paid Double Payments to Medicaid Insurers
“Government guidelines stipulate that if Medicaid recipients move to another state, they are supposed to cancel their coverage in their former state when signing up in the new one, which often gives them a different insurer,” The Journal reported. “But the recipients don’t always cancel, leaving states to play catch-up.”
States paying the highest rates of duplicate payments include Georgia, Florida, and Indiana, according to The Wall Street Journal’s report.
To illustrate how this works, the story used the hypothetical example of a Medicaid recipient in Florida. There, the state pays $291 per month to the private Medicaid insurer. The individual moves to Georgia and enrolls in that state’s Medicaid program. Georgia begins paying an insurer $339 per month. But Florida continues to pay the monthly fee even though the recipient is now receiving medical care in Georgia. (The payment amounts are estimates based on averages in each state, the paper said.)
The state might not know that a beneficiary has moved until it conducts an annual eligibility check, the story noted. In the meantime, insurers “can collect months of payments before a patient is dropped from the rolls.”
To determine if a patient had moved, the analysis looked at where they received medical care. “The data don’t indicate where recipients are actually living or reflect all adjustments later made to payments,” the story noted.
Some insurers criticized the analysis. Most of the three-year period overlapped with the COVID-19 pandemic, when emergency rules made it difficult to disenroll beneficiaries, insurers told The Wall Street Journal. A Centene spokesman said the analysis “ignores the financial safeguards in place to address potential overpayments.” The insurer told the paper that it had repaid $2 billion to the states between 2019 and 2021.
The duplicate payments amounted to $800 million in 2019, then jumped to $1.3 billion in 2020 and $2.1 billion in 2021, the paper reported. KFF, citing CMS data, reported that states spent an estimated $880 billion on Medicaid programs in fiscal year 2023.
Craig Kennedy, chief executive at Medicaid Health Plans of American—an industry group that represents managed care organizations—told The Journal that insurers are closely watched by regulators.
“[Health insurance is] a heavily regulated industry,” Kennedy said. “Following rules and regulations is the No. 1 priority here.”
Office of Inspector General Weighs In
The Wall Street Journal analysis followed an earlier report from the US Department of Health and Human Services’ (HHS) Office of Inspector General (OIG). The OIG report, issued in September 2022, was based on an audit covering Medicaid managed care capitation payments in August 2019 and August 2020. It was also based on data from T-MSIS.
“All 47 States reviewed made capitation payments on behalf of Medicaid beneficiaries who were concurrently enrolled in two States,” the OIG reported. “Specifically, capitation payments were made on behalf of 208,254 concurrently enrolled beneficiaries in August 2019 and 327,497 concurrently enrolled beneficiaries in August 2020. The Medicaid program incurred costs of approximately $72.9 million in August 2019 and $117.1 million in August 2020 for capitation payments associated with beneficiaries in one of the two concurrently enrolled States.”
OIG advised CMS to provide state agencies with T-MSIS enrollment data. CMS dismissed the recommendation, claiming that the Public Assistance Reporting Information System (PARIS), designed to deter improper public assistance payments, was sufficient, and that T-MSIS would add inefficiency and confusion. However, current and former state Medicaid officials told The Wall Street Journal that PARIS “doesn’t always include up-to-date or complete information.”
However, effective communication can bring more harmony to medical lab managers and scientists when it comes to compliance
Depending on how lab professionals view it, clinical laboratory regulations can be characterized as a series of checklists to fill out or an opportunity to grow an organization.
Leaning into the latter option will preserve regulatory compliance while also ensuring the operational health of the clinical laboratory.
At the Lab Manager Leadership Summit, Kelly VanBemmel, MS, MB(ASCP)CM (above) pressed attendees to open the lines of communication between bench scientists and lab managers when it comes to clinical laboratory regulations. (Photo copyright: Scott Wallask.)
‘There’s a Gap’ in How Both Sides View Regulatory Compliance
VanBemmel spent her presentation aiming to bridge the rift between how bench scientists look at clinical laboratory regulations compared to the views of medical lab managers.
“There’s a gap between how staff experience regulations and how management does,” she noted. “Staff typically think of compliance as a checklist to do their jobs.” Managers, however, need to understand a wider compliance picture. She illustrated her point by comparing views on the following regulatory bodies.
Staff understand that the FDA clears tests and devices for use in non-research environments, though not all consumables or equipment are in that setting.
Managers understand that the FDA develops rules and guidance for CLIA complexity categorization.
Communication Leads to Common Ground with Clinical Laboratory Regulations
Given the above differences among managers and staff, VanBemmel explained that both sides must frequently talk to each other to fill in the missing details.
“When you’re in the thick of regulations, communication becomes critical,” she said.
For example, bench staff may feel it is solely their manager’s responsibility to comply with clinical laboratory regulations. Savvy lab leaders will point out non-compliant conditions—such as diagnostic analyzer malfunctions and sample cross contamination—over which bench staff have direct control, helping workers better understand their responsibility when it comes to compliance.
On the other hand, lazy communication from managers to their bench scientists can stunt compliance efforts. She recalled a prior supervisor who often answered questions about regulations by asking: What does the standard operation procedure state?
“That answer wasn’t particularly helpful,” VanBemmel recalled. “That made me think that my supervisor didn’t understand nuance.”
Thorough communication builds greater trust, and seasoned clinical laboratory professionals of all ranks will quickly recognize the compliance benefits when the worker-manager relationship gels.
