PAMA Solution

Starting July 2019, to comply with PAMA, medical laboratories are expected to analyze their private payer price data to help ensure clean, complete, and accurate reporting by March 31 2020.

The Centers for Medicare and Medicaid Services (CMS) did not implement fines with the first round of reporting, but that could change this round. In this second period of data collection, it’s becoming even more important for us to collect data accurately, precisely, and provide nearly perfect information on this because we can see the impact is fairly significant to our industry, and with payers ratcheting down their pricing, it’s becoming even more crucial.

PAMA Schedule

January 1, 2016 – June 30, 2016: Labs collected the private payer amounts and volumes for all their tests.

January 1, 2017 – May 30, 2017: Labs reported the private payer amounts and volumes to CMS.

Late Summer/Early Fall: CMS published the draft 2018 Medicare rates.

January 1, 2018 – December 31, 2020: New Medicare rates in effect. Rates are equal to the median weighted private payer's rate (limited to a -10% year-over-year decline).

January 1, 2019 – June 30, 2019: Round 2 - Labs will collect the private payer amounts and volumes for their tests.

January 1, 2020 – March 31, 2020: Labs will report the private payer amounts and volumes to CMS.

January 1, 2021 – December 31, 2023: New Medicare rates go into effect. Rates are equal to the weighted median private payer’s rate (limited to a -15% year-over-year decline).

The data collection and reporting periods will repeat every three years indefinitely.

PAMA Schedule

With BIKHAM Healthcare by your side shield yourself from the PAMA effect

new Protecting Access to Medicare Act

The implications of the new Protecting Access to Medicare Act (PAMA) that was released on June 2016 has caused growing concerns as it requires, starting January 1, 2017, laboratories and physician offices to report any payment information they receive from private payers. This new regulation will establish new compliance demands and transform the Medicare’s payment system for clinical laboratory testing.

Our Laboratory billing experts will help you empower in the ever-changing healthcare universe in order for you to comply with the new rules and succeed in the new reimbursement environment. We are there to help minimize any PAMA impact on your bottom line!

Bikham has designed its compliance solutions for laboratories that meet the needs of today’s margin challenged diagnostic environment. In order to manage and meet the high-volume data and transaction needs of laboratories we provide you with expert compliance and audit teams.

We deliver optimized billing for maximized revenue with:

  • Unparalleled managing services
  • Automated business rules and workflows
  • Visibility into business intelligence
  • Managed medical claims filing that ensures upfront, clean claim submissions in the shortest possible time.
  • Visibility into Business intelligence to make informed business decisions

Bikham helps laboratories and diagnostic service providers to maximize their operational efficiencies, reimbursements, and revenue opportunities to satisfy regulatory requirements in order to help them succeed in the new paradigm. We help you improve your position for the future.

PAMA Frequently Asked Questions

PAMA expands to “Protecting Access to Medicare Act” of 2014. The act was published to modify then existing Medicare reimbursement rates for lab services.The latest amendment was made on June 17, 2016.
CLFS was created to ensure that Medicare beneficiaries get adequate access to lab services. The old PAMA Medicare fee schedule was based on cost data of 1984 which was updated during the times of inflation. The main idea to introduce a fresh CLFS system was to perform a market based pricing exercise and bring up prices that would be in-line with the current practices.
PAMA reporting requirements are applicable to laboratories that receive a majority of their Medicare revenue under the CLFS, the Physician Fee Schedule ("PFS"), or the new section 1834A of the Social Security Act and receives more than $12500 from the CLFS on an annual basis.

Some of the applicable laboratories are

Hospital Labs:

  • Inpatients
  • Outpatients
  • Non-Patients ("Outreach")

Physician Office Labs:

  • Point of Care/Traditional Tests
  • Provider-Performed Microscopy
  • Pathologists’ Practices

Independent Labs:

  • Standard Tests
  • Drug Abuse Testing
  • Molecular Diagnostics
The $12,500 threshold rate does not apply to a laboratory that furnishes an ADLT, but strictly applies to any CDLT that a laboratory may perform.
In the event of non-compliance, the responsibility for submission of inaccuracies rest upon the senior-most official and the laboratory may be penalized up to $10000 perline item per day.
CMS was involved in the proposal responsible for altering payment rates. The proposal was linked to the Congress passing the first major reform of the CLFS in the April of 2014, later named as PAMA.

The responsibility to develop and clarify definitions of key terms, determine the right times to report private payer rates, create a technology platform capable of processing millions of data, and establishing coding processes for the new tests lies with the CMS.
The PAMA legislation will substantially impact Medicare rates by transforming the payment system and establishing new compliance requirements. Changing Medicare rates will also alter rates of some private payers that base their rates over the Medicare fee schedule.
As per PAMA, laboratories are required to report private payer rates, other than the price concessions. The reimbursement made by payers for lab services for each lab test adds up to a lot of data. Labs are also required to include any changes in the rate during the billing period.

All this data is required for each test on the menu other than the unlisted CPT codes. An attestation by an executive of the reporting entity stating the accuracy and completeness of submitted information must also be made.

Prior to submitting any information, the reporting entities are required to register in the Enterprise Identity Management system and request a CLFS role (submitter or certifier) in the Fee-for-Service data collection system. The reporting executive must be certified in PECOS as an authorized user on the Medicare Enrollment forms. Names of such executives appear within one of the following 855 application forms:A, B, C, I, or R.
With the latest fee schedule in place and complex reporting obligations, it is important to have a financially stable RCM system that offers you the required visibility and auditability. A system that is able to capture the following information and aggregate it into buckets is of the utmost importance.
  • Date of Payment.
  • Payer Type.
  • Number of Tests conducted for each line item.
  • Allowed Amount, Payment made by the payer and the Patient Responsibility.
  • Contractual rates including volume and other discounts.
Therefore, incorporating such an efficient system can be something you would want to do for your lab practice.
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