Coalition for 21st Century Medicine Supports the PAMA Final Rule and Plans to Comment on the 2016 Preliminary Gapfill Determinations

Coalition’s message is to promote innovation in Advanced Diagnostic Laboratory Tests that improves patients’ outcomes

Washington, D.C. – On June 17, the Centers for Medicare & Medicaid Services (CMS) released the final regulations to implement the new market based payment system for advanced diagnostic laboratory tests (ADLTs). The Coalition for 21st Century Medicine (C21) has been a strong supporter of the market based payment reforms mandated by Section 216 of the Protecting Access to Medicare Act (PAMA), and submitted comments on the Proposed Rule in November, 2015. C21 plans to engage with CMS and other stakeholders to ensure that this new system is implemented in a manner that allows advancements in diagnostic innovation by establishing a pathway for predictable pricing decisions based on market values and unique coding for all advanced diagnostic tests.

C21 commends the efforts of CMS in finalizing the regulations to implement section 216 of PAMA, and plans to seek clarification for certain provisions in the Final Rule through sub-regulatory guidance. In particular, C21 urges CMS to follow the statutory definitions for an Advanced Diagnostic Laboratory Test (ADLT) as Congress intended and not limit the ADLT category by adding eligibility criteria outside of the statutory framework. Additionally, C21 supports a streamlined process for designating ADLTs and for assigning permanent HCPCS test-specific codes to uniquely identify lab tests.

The PAMA statute directs CMS to enact market-based rates by January 1, 2017. While the Final Rule has delayed implementation of these market based rates until January 1, 2018, the Coalition believes that reviewing commercial payer rates should guide Medicare reimbursement decisions during this transition period. In contrast, the 2016 Preliminary Gapfill Payment Determinations released on June 10, 2016 included recommendations by several Medicare Administrative Contractors that, if finalized, would represent drastic reductions in payment rates of several established innovative tests of up to 30% to 85%. The proposed Gapfill rates are inconsistent with rates established by commercial payers and the PAMA statute. Additionally, the PAMA statute sets a maximum of 10% reduction in payment for any test code in 2017 using the new market-based rate methodology.

At a time when the Obama Administration and Congress are pressing forward with initiatives to advance precision medicine, we are concerned at the magnitude of these proposed payment reductions in the gapfill process. C21 will continue to work with CMS and its Medicare contractors through gapfill public comment process to ensure that the Medicare reimbursement for these advanced diagnostic precision medicine tests reflects the value they provide in improving the management and health outcomes of patients.

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