The American Clinical Lab Association sued the federal government over a new payment system under the Protecting Access to Medicare Act.
Here are seven things to know.
1. The lawsuit against Acting HHS Secretary Eric Hargan was filed Monday in a federal court in Washington, D.C.
2. In the complaint, ACLA alleges CMS, operating under HHS, "ignored congressional intent" in implementing new Medicare Clinical Laboratory Fee Schedule rates under PAMA.
3. PAMA became law in April 2014. The goal with PAMA was to create "market-based pricing for certain lab tests," and the law also "required laboratories to report information to ensure Medicare reimbursement rates were close to those of private payers," reports Reuters.
4. The new Medicare CLFS rates, which CMS says take into account weighted median private payer rates, were posted in November. They are slated to take effect Jan. 1.
5. ACLA, a nonprofit trade association, said, "Contrary to Congress' directives, the overwhelming majority of laboratories were prohibited from reporting private payer data. As a result, CMS failed to protect access to laboratory services for Medicare beneficiaries. This flawed process could cause serious financial harm to potentially thousands of hospital, independent and physician office laboratories, and make it harder for Medicare beneficiaries to get access to medical testing, particularly in remote rural areas and in nursing homes that depend on laboratory testing services."
6. The current administration estimates the new Medicare CLFS rates could save the government as much as $3 billion over five years, according to Reuters. But ACLA claims in the report that the new reimbursement system would decrease Medicare payment for labs by approximately $670 million next year.
7. CMS declined to comment to Reuters about the lawsuit.
Read more about the lawsuit here and here.
More articles on legal and regulatory issues:
Statistician: Government used faulty extrapolation in $100M Medicare fraud case
Nurses union sues Care New England to halt hospital closure
11 latest healthcare industry lawsuits, settlements