Before diving into this, let’s discuss what the Protecting Access to Medicare Act (PAMA) is exactly. PAMA is a bill that extends an already existing program, providing more direction than given in previous years. The act was signed into law on April 1st, 2014 and included extensive reforms to the Medical Clinical Laboratory Fee Schedule (CLFS). Further changes are being implemented, and while some have already been made, 2020 will be the official start of the new program.

With the changes taking place for PAMA right now, there will be a significant impact on laboratories and the services that they provide. Previously implemented payment rates became effective in 2018, but with future restrictions and reporting requirements, many expect this to be one of the most financially disruptive events for all laboratories—big and small. Payment cuts for rendered services could be so severe that some labs would be unable to maintain operation. The laboratories that will be most greatly affected are those within smaller communities. They rely strongly on Medicare revenue and with price cuts, they will go from making a minimal profit to almost nothing; it will be extremely hard for them to break even.

Other medical laboratories will continue to suffer as well, considering each year there will be more and more cuts to Medicare lab prices. Most laboratories are already at their limit when it comes to the services they’re able to provide, and adding more cost cuts only complicates the situation. Laboratory billing is highly complex, and with the constantly increasing number of new demands, this can have a huge impact on the overall success of the business. Though it may seem like a hopeless situation, there are ways to soften the blow.

Medical billing companies with certified medical billing specialists who know the regulations inside and out are capable of coding for the maximum reimbursement possible. For payment approval and optimal reimbursement rates, it is essential to have someone who fully understands PAMA’s reporting requirements, the intricacies of laboratory billing, and the importance of accurate coding. With good billing specialists, a laboratory’s collection rates will be improved and the financial impact of PAMA’s regulations will be reduced.

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