Procedural win for ACLA in pama case appeal


The U.S. Court of Appeals for the District of Columbia, sued the federal Department of Health and Human Services (DHHS) on July 30, leading to a significant procedural win for the ACLA (American Clinical Laboratory Association).

In the appeal on the case against DHHS Secretary Alex Azar last year, the court announced that ACLA is entitled to challenge what it calls DHHS’s harmful regulatory overreach, when last year only, it implemented the Protecting Access to Medicare Act (PAMA) norms.

Under the PAMA, the CMS (Centre for Medicare and Medicaid Services) deducts what it pays clinical labs by 10% and then again by 10% this year. Another 10% cut will be effective from January 01 of the coming year, followed by three more years of 15% cuts from January 1, 2021.

Intent of the Congress

PAMA implementation on the grounds of CMS

ACLA had challenged the PAMA implementation on the grounds of CMS not following Congress’ intent, as it failed to introduce a market-based system for the payment of clinical lab tests. In one of its decision announcements, ACLA stated that the flawed data collection process poses a challenge to the rule of law and PAMA’s intent to support a sustainable and market-based laboratory market.

Responding to the questions from The Dark Report, Julie Khani, President at ACLA, mentioned that the District of Columbia Circuit Court of Appeals had reversed the DC district court’s decision after discovering that the portion of the PAMA precluding judicial review of reimbursement rates, did not preclude review of the ways that data collection provisions were implemented by Azar in the law.

“As this jurisdictional issue has now been resolved, the case returns to the DC, which will pass its judgement on whether the applicable laboratory definition violates the Administrative Procedure Act as arbitrary and capricious”, said Mr. Khani.

Challenging DHHS, ACLA also stated that it didn’t collect data from enough clinical laboratories. Therefore, the data based on what health insurers make payments for lab tests didn’t represent the complete market for such tests. According to ACLA, failing to collect enough data have skewed the results in unfavorable ways.

About the case proceedings, Khani further told that the appeals court had sent the case back to Amy Berman Jackson, the judge who heard the case in the D.C. Circuit Court. “Unless she decides to transfer the case, she will be hearing it,” he added.

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