August 6, 2018
 

Dear Members:

On behalf of the organizations listed below, we wanted to draw your attention to a critical problem facing your constituents and millions of Medicare beneficiaries across the country resulting from a gross overreach by the federal bureaucracy in contravention of the will of Congress.

As you know, Congress passed the Protecting Access to Medicare Act (PAMA) in 2014 with worthy intentions. Among the provisions of PAMA was an instruction to the U.S. Department of Health & Human Services (HHS) that the Department construct a process to derive and transition to a market-based payment model for critical lab tests. This was a laudable goal.

Unfortunately, HHS chose to disregard Congress’ intent and, instead, use its bureaucratic power to cherry-pick data from fewer than 1% of laboratories. This, in turn, produced the foreordained outcome of greatly reduced reimbursement for laboratory tests and diagnostics. HHS’ flawed implementation of PAMA is problematic on several levels. First, cuts of this magnitude imperil access for seniors who rely on these tests and the Medicare program. Second, the abuse of bureaucratic power is troubling and raises questions about whether or not HHS can be relied on to implement the will of Congress. Finally, if HHS cannot be counted upon to develop a legitimate market-based reimbursement mechanism for lab services, it calls into question broader efforts in health care to ensure more efficient market-based reforms for public programs. Doug Badger, Senior Fellow at the Galen Institute, provides important perspectives on HHS’ actions in his recent paper (https://bit.ly/2mM8H2R).

Congress did the right thing in directing HHS to develop market-based rates, but now Congress must ensure that HHS follows the law and stops abusing its authority. We ask that you direct HHS to follow the law as written and develop methodology that appropriately captures the full marketplace.

Thank you for your attention to this important issue.