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- PAMA Lawsuit Supported by the CAP Wins Appeal
A US Court of Appeals ruled in favor of a motion in a lawsuit by the American Clinical Laboratory Association (ACLA) against the Department of Health and Human Services (HHS) over how fees for clinical laboratory services are calculated. The judgement sought to correctly implement market-based reforms to clinical laboratory fees mandated by the Protecting Access to Medicare Act (PAMA) of 2016. The CAP has strongly supported ACLA’s lawsuit against the HHS and efforts to correct the administration’s execution of PAMA’s clinical laboratory payment reforms.
The court agreed that the 2016 PAMA regulations were arbitrary and capricious, which is an argument that the CAP made in an amicus brief in support of ACLA’s lawsuit in 2018. Now the case will head back to the DC District Court.
The CAP disagreed with the final PAMA regulation that determined how Medicare would decide what to pay for diagnostic tests performed in clinical laboratories. The rates would be based on private payer fees, which was reported by applicable laboratories to the government through a data collection process.
The appeals court ruling stated that the government, without adequate explanation, exempted a sizable portion of the laboratories covered by the statute from the data reporting requirement. “Indeed, only 21 hospital laboratories—out of a total of 1,942 reporting laboratories—reported their data, even though hospital laboratories accounted for nearly a quarter of Medicare payments made under the Clinical Laboratory Fee Schedule in 2015.”