Indiana PAMA Fact Sheet*

Millions of Indiana seniors depend on timely access to critical laboratory testing and diagnostic services for their health.

• Laboratories play an integral role in diagnosing common and complex diseases, including diabetes and cancers and are vital to early intervention and preventative care for patients across the country.
• Indiana alone has more than 100 hospital laboratories and over 1,500 independent and physician office laboratories—an expansive network that helps ensure Indiana’s seniors have access to the tests they need.
• All of these labs, including independent labs, hospital outreach labs, physician offices, ambulatory surgery centers, ESRD, specialty or nursing homes labs, make it possible for providers to identify and treat the most complex conditions Indianans face.

Indiana seniors face nearly $29 million in year-over-year cuts to the vital lab services they depend on.

• In 2014, Congress passed the Protecting Access to Medicare Act (PAMA) to safeguard seniors’ access to critical health services, including laboratory tests. However, as a result of the U.S. Department of Health and Human Services (HHS) flawed approach to PAMA implementation, seniors’ health is at risk.
• Under PAMA, Congress directed HHS to establish market-based reimbursement rates for clinical laboratories. However, the HHS Secretary disregarded Congress’ instruction, gathering rate information from less than 1% of laboratories nationwide.
• This skewed and incomplete data collection process ignores payment data from 99% of the market and has resulted in severe cuts to laboratory services.
• By drastically cutting rates, including for the top-25 most performed lab tests, HHS is threatening access to lab services for beneficiaries living with diabetes, heart disease, liver disease, kidney disease, prostate and colon cancers, anemia, infections, opioid dependency and countless other common health conditions.

As a result of this flawed data collection process, the cuts to lab services dramatically exceed original estimates from the Congressional Budget Office and the Office of Management and Budget, leading to an erosion of seniors’ benefits, particularly the most vulnerable and those in rural communities.

• Reducing access to clinical lab services will ultimately drive up the cost of care for the Medicare program and for beneficiaries, particularly those who reside in medically underserved communities.
• The laboratories serving these vulnerable populations stand to face the brunt of these cuts, which are estimated to reach nearly 30% in the first three years of PAMA with the potential for further reductions. Many of these labs will be forced to shut down operations, reduce services, eliminate tests and/or lay off employees.

The Laboratory Access for Beneficiaries Act (LAB Act)—bipartisan legislation recently introduced in the U.S. House of Representatives—is a common-sense solution that proposes a data-reporting delay of one year, which would allow CMS and other stakeholders time to address the flaws in the current reporting process and help protect seniors’ health.

• The LAB Act is a common-sense solution to protect seniors in Indiana and across the country. Suspending data reporting in 2020 accomplishes two critical goals:

o Allowing for a more representative share of labs to report private market data; and

o Providing valuable time for stakeholders and policymakers to determine how to reform PAMA and ensure a truly market-based system will protect Medicare beneficiaries’ services.

• Importantly, we would also recommend a required report from the National Academy of Medicine (NAM) on how to effectively support market based rates and does not reverse any of the cuts to labs already in place, instead putting the brakes on a flawed process and establishing a sustainable market-based approach to setting laboratory rates that can meet the needs of Indiana’s—and the country’s—seniors moving forward.

* This Indiana PAMA Fact Sheet was provided by the Indiana State Medical Association.