PAMA has already made a significant impact for hospital and independent labs, and continues to do so with the redefinition of an applicable lab. PAMA has expanded the number of reporting labs to include smaller labs and hospital outreach labs. CMS estimates at least 43% more labs are now required to report under the new definition. Therefore, labs not reporting during the first period need to double check their requirement.
As defined by CMS, an applicable lab is a laboratory receiving more than 50% of its total Medicare revenues from services paid under the CLFS or the physician fee schedule (PFS), with a low expenditure threshold. To meet the low expenditure threshold, a lab must have received $12,500 from final Medicare paid claims for services paid under the CLFS during the data collection period of January 1 to June 30, 2019.
A new wrinkle per the 2019 Final Rule is that Medicare Advantage revenues are excluded from the total Medicare revenue calculation. The change for round 2 that may have the greatest impact is that hospital outreach laboratories billing “non-patients” for laboratory services are now included in the applicable lab determination.
In Transmittal 3425, a non-patient is defined as a beneficiary who has a specimen that is submitted to a hospital for analysis but is not physically present at the hospital for the laboratory service; that is, the patient is neither a registered hospital outpatient nor an admitted hospital inpatient. Non-patients may be identified with the CMS-1450 14X TOB. An inherent challenge is that the 14X bill type is not necessarily used by commercial payers. This seemingly small modification will have significant impact to which organizations are considered “applicable labs” and to the algorithms by which providers select data for reporting.
Labs meeting these qualifications must then report “applicable information” to CMS. As a service to our clients, Quadax has developed the PAMA Applicable Lab Decision Tree shown below, which visually depicts the determination criteria.
Quadax financial reporting quickly and accurately provides the data needed to walk through this process and determine a lab’s status under PAMA. Quadax supports laboratories with tools to meet all regulatory requirements touching the revenue cycle. In addition to equipping labs with tools to help them identify their PAMA applicable lab status, Quadax makes it easy for applicable labs to select and segregate the correct, complete data required for submission.
To learn more, check out this complimentary webinar, PAMA Tools & Strategies for The Next Round of Reporting. Watch On-Demand.
This webinar will provide further insight into the strategies and tools successful labs use to determine applicable lab status, capture the appropriate claims population, and supply and normalize data to meet PAMA Reporting guidelines.