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Delay in Final Rule Implementing Protecting Access to Medicare Act: Sunshine Act Revisited?

The laboratory industry began 2016 amid confusion regarding how to comply with the Protecting Access to Medicare Act of 2014 (PAMA), which made the most significant changes to the Medicare Part B payment structure for laboratories since implementation of the Medicare Clinical Laboratory Fee Schedule (MCLFS) in 1984.  Despite PAMA’s requirement that the Centers for Medicare & Medicaid Services (CMS) publish final regulations no later than June 30, 2015, CMS did not issue a proposed rule until October 1st and has yet to follow up with the final rule.  Given stakeholders’ substantial concerns regarding the proposed rule – and the track record of CMS – the delay is not surprising.

By way of background, PAMA would require certain laboratories to report payment data so that the MCLFS can be updated based on private payor rates. More details regarding PAMA’s requirements may be found in a previous post. According to the proposed rule, certain laboratories would need to submit payment data to CMS between January 1, 2016 and March 31, 2016, but this deadline has obviously come and gone and CMS remains silent regarding its next move.

Industry stakeholders such as the American Clinical Laboratory Association and the American Hospital Association have been highly critical of the proposed rule’s timeline, and Senate and House members joined the fray in late December when they submitted separate letters to CMS, questioning the proposed timeline and other aspects of the proposed rule.  Earlier this week a bipartisan group of 27 members of the House Ways and Means Committee piled on in a letter urging CMS to delay its implementation of PAMA so that the process is not “improperly rushed.” The Committee further noted that revising the MCLFS is a “highly complex task with significant implications for all stakeholders, with a reach far beyond the Medicare program” and expressed concern about the delay in issuing the final rule, which makes a January 1, 2017 effective date “not feasible.”

The position in which the laboratory industry currently finds itself is eerily reminiscent of that faced by pharmaceutical and medical device manufacturers back in 2012 when CMS delayed implementation of the Sunshine Act after failing to publish regulations in a timely way.  CMS issued a proposed rule that did not adequately consider the operational realities that manufacturers would face when they collected and submitted, for the first time, data regarding payments and other transfers of value to physicians and teaching hospitals.  When CMS announced the delay in data collection, it stated that the delay was meant to “provide time for organizations to prepare for data submission and to sufficiently address the important input we received during the rulemaking process” and that the additional time would allow CMS “to address operational and implementation issues in a thoughtful manner, and the ability to ensure the accuracy of the data that is collected.”   One can only hope that CMS takes a page out of its own playbook and delays PAMA implementation as well.

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About this Author

Bridgette A. Keller, health system administration LAWYER, Mintz Levin, Law Firm

Bridgette applies her experience in health system administration and ethics in health care to her health law practice. Bridgette advises health care providers, ACOs, health plans, PBMs, and laboratories on a variety of regulatory, fraud and abuse, and business planning matters.

With a background in health care operations, Bridgette is able to provide clients with practical insight that includes a focus on the business implications of health care enforcement defense activities, internal investigations, regulatory compliance, and fraud and abuse...

Karen Lovitch, health care, Medicare, Compliance, Licensing, MIntz Levin

Karen is the Practice Leader of the firm’s Health Law Practice. She counsels health care clients on regulatory, transactional, and operational issues, including Medicare coverage and reimbursement, the development and implementation of health care compliance programs, and licensure and certification matters. In addition, Karen advises clients on the legal, practical, and fraud and abuse implications of business arrangements and sales and marketing practices. Her experience includes matters related to the anti-kickback statute, the Stark law, state statutes prohibiting kickbacks and self-referrals, and the federal Physician Payments Sunshine Act.

Karen applies her compliance and regulatory experience in transactional as well as litigation contexts. In addition to counseling health care entities on regulatory matters arising in connection with mergers and acquisitions, she has successfully defended clients subject to state and federal surveys, Medicare and Medicaid overpayment and reimbursement appeals, and state licensure proceedings. Karen also represents clients subject to state and federal investigations alleging violation of the anti-kickback statute, the federal False Claims Act, and other state and federal laws.