Protecting Access to Medicare Act of 2014

Great Seal of the United States (obverse)

Protecting Access to Medicare Act of 2014 (PAMA) is a significant piece of legislation in the United States that was enacted to reform aspects of the Medicare system, particularly in relation to clinical laboratory tests and payments. The Act was signed into law on April 1, 2014, aiming to improve the efficiency, accuracy, and cost-effectiveness of Medicare payments, while also extending several expiring provisions related to health care.

Overview

The Protecting Access to Medicare Act of 2014 introduced a new payment system for clinical diagnostic laboratory tests under the Medicare program. This system required laboratories to report the payment rates paid by private insurers for laboratory tests, which would then be used to calculate Medicare reimbursement rates. The goal was to align Medicare payments more closely with the private market, ensuring that the Medicare program pays rates similar to those paid by private insurers.

Key Provisions

• Market-based Rate Setting: One of the central features of PAMA is the establishment of a market-based rate setting system for clinical diagnostic laboratory tests. Laboratories are required to report private payer rates and volumes, which the Centers for Medicare & Medicaid Services (CMS) uses to set Medicare payment rates.
• Advanced Diagnostic Laboratory Tests (ADLTs): PAMA introduced a specific category for ADLTs, providing a separate payment methodology to encourage innovation and the development of new tests.
• Temporary Extension of Certain Medicare Programs: The Act also included provisions for the temporary extension of several Medicare programs, including the Medicare Dependent Hospital Program and the Low-Volume Hospital Payment Adjustment, among others.

Impact

The implementation of PAMA has had a significant impact on the clinical laboratory industry and Medicare beneficiaries. While the Act aims to reduce Medicare spending on laboratory tests by paying market rates, there have been concerns about the potential impact on small laboratories and access to laboratory services for Medicare beneficiaries. The transition to the new payment system has required laboratories to adapt to new reporting requirements and payment rates.

Controversies and Challenges

The implementation of PAMA has faced challenges, including delays in the reporting and payment rate setting process and concerns from the laboratory industry about the potential negative impact on small and rural laboratories. Critics argue that the market-based payment system may not accurately reflect the costs of providing laboratory services, particularly for specialized or less common tests.

Conclusion

The Protecting Access to Medicare Act of 2014 represents a significant shift in how Medicare payments for clinical laboratory tests are determined. By moving towards a market-based rate setting system, PAMA aims to ensure that Medicare pays rates that are more aligned with the private market, potentially leading to savings for the Medicare program. However, the implementation of the Act continues to face challenges and criticisms, highlighting the complexities of reforming healthcare payment systems.