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The Protecting Access to Medicare Act of 2014 (PAMA) payments to clinical diagnostic laboratories has changed the rate
in which labs will be paid under the Medicare Clinical Laboratory Fee Schedule (CLFS). Under the regulatory requirements,
CMS will base 2021 clinical laboratory fee schedule payments on private payer rates for all applicable labs.
Laboratories must submit volume and final payment amounts from private payers (See PAMA Reporting diagram).

Under CMS reporting guidelines, more laboratories will be required to participate in data-collecting. In the first reporting
period, most hospital labs were excluded by not defining them as applicable labs. For the second round of data collection,
outreach labs are now joining the collection effort. Obtaining a wider set of data can only equate to more accurate
prices set by private health plans. CMS has dropped outpatient private payers and hinted hospital labs should be
limited to non-patient services.

– According to CMS, 43% more labs have been added to the second round of a data collection.

– The data collection and reporting will repeat every three years.

– Clinical laboratories are faced with Medicare cuts of up to 30% over the next three years
under the Centers for Medicare and Medicaid Services’ (CMS) new fee schedule.

– Financial management and operational efficiency is key to survive PAMA’s impact.

– Medicare program pays out about $7 billion a year for clinical diagnostic laboratory tests.

– GenomeWeb reported in 2017 CMS expects PAMA
to save the government $3.93 billion by 2028.
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04 CMS Issues New
Payment Rates

January 2021

Data Reporting
Period Ends
March 31, 2020