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Since its passage in 2014, the Protecting Access to Medicare Act (PAMA) has had a significant impact on the health care landscape—particularly in how clinical laboratory services are reimbursed under Medicare. While PAMA aimed to modernize the payment system by tying lab test reimbursement rates to market data, the implementation has been fraught with challenges. Now, Congress is revisiting PAMA with bipartisan calls for reform—efforts that could shape the future of diagnostic testing and access to timely care.
What PAMA Was Meant to Do
PAMA was designed to create a more accurate, market-based pricing model for clinical laboratory tests. By collecting private payer rates from a sample of laboratories, the Centers for Medicare & Medicaid Services (CMS) would set Medicare reimbursement rates that better reflect the actual market value of lab services.
However, in practice, the data collection process under PAMA has been criticized for being both incomplete and unrepresentative. Large national labs dominated the data submissions, while many smaller and hospital-based labs—where a significant portion of testing occurs—were left out. As a result, CMS reimbursement rates have plummeted for many essential lab tests, putting smaller labs at financial risk and potentially limiting patient access to critical diagnostics.
Delays in Data Reporting and Reimbursement Cuts: A Legislative Lifeline
Recognizing the problematic rollout of the data collection process, Congress has repeatedly stepped in to delay upcoming data reporting requirements and postpone associated reimbursement cuts. These legislative delays have provided temporary relief to the clinical laboratory community and bought time to pursue more permanent reforms.
Originally, PAMA required applicable laboratories to report private payer data every three years, with each reporting period leading to updated—and often lower—payment rates. However, the COVID-19 pandemic and growing bipartisan concerns over the fairness of the system led Congress to pass several delays, including:
- Coronavirus Aid, Relief, and Economic Security (CARES) Act (2020) – Delayed the reporting period and postponed cuts.
- Consolidated Appropriations Act (2022) – Further delayed cuts scheduled for 2023 and pushed back the next reporting cycle to 2024.
Most recently, additional delays passed in late 2023 have suspended further reductions and postponed the next data collection deadline, which was expected to trigger another round of cuts. Without these interventions, laboratories could have seen reimbursement slashed by up to 15% for hundreds of common diagnostic tests—at a time when the healthcare system is still recovering from pandemic-related disruptions.
These legislative pauses have prevented a downward spiral of access and affordability. However, they are stop-gap measures. According to the American Laboratory Association (ACLA), long-term stability in lab reimbursement requires structural changes to the PAMA framework, not just short-term legislative patches.
Congressional Reform Efforts
A top priority for ACLA is comprehensive change to PAMA through enactment of the Saving Access to Laboratory Services Act (SALSA) which aims to:
- Establish a more statistically valid and representative approach to data collection.
- Protect labs from steep year-over-year reimbursement cuts.
- Ensure better oversight and transparency in how rates are determined.
Bipartisan, bicameral support for SALSA highlights a shared understanding that accurate diagnostics are foundational to effective treatment and patient care. However, likely cost to the federal government associated with enactment of comprehensive reform has been a barrier to passage. Whereas, yearly short term legislative delays in data reporting and reimbursement cuts have resulted in budget savings. In fact. Congress has stepped in six times to delay the data reporting period and five times to delay further cuts.
Looking Ahead
As Congress deliberates reforms to PAMA, cost will continue to be a driving factor determining further action. Without action, clinical labs will again face reimbursement cuts of up to 15% on January 1, 2026. While enactment of comprehensive reform to PAMA will continue to be a top priority for ACLA and the clinical lab industry, given legislative history and congressional pressure to limit congressional outlays, Congress is again most likely to pass another short term patch to prevent the impending cuts.
Congress is back in town, and the race is on to meet House Speaker Mike Johnson’s ambitious goal of passing a budget reconciliation bill by Memorial Day. Meanwhile, the Trump administration is busy with plans to change civil service classification and restructure the Department of Health and Human Services. So, with that, let’s get into it. Welcome to the Week Ahead!
The Administration
The Treasury Department is expected this week to provide an estimate of when the X Day will occur – the day on which the federal government will have exhausted its ability to pay its bills. This date is expected to be sometime in the summer or early fall of 2025.
Remember, Republican leaders in Congress included raising the debt ceiling in the reconciliation bill they are trying to pass. An earlier X Day means an earlier deadline for when Congress would need to raise the debt ceiling.
The Trump administration is also dealing with the fallout of a leaked copy of the proposed fiscal year 2026 (FY 26) budget for HHS to the Washington Post. Health care advocacy groups are concerned about the proposed $80B in cuts to discretionary spending, plans to eliminate funding for several agencies and programs, and the restructuring of several parts of the department into a new “Administration for a Healthy America.” The official budget is expected in May, and the president’s proposed budget is just that, a proposal that Congress can change or even ignore.
Proposed cuts to spending and reorganizing federal agencies are nothing new for an administration’s budget proposals. However, these proposals hit differently coming from an administration that has not been shy about exerting executive branch authority to move forward with its agenda. Case in point: the Trump administration plans to move forward with a plan to reclassify civil servants to make it easier for them to be removed.
The Senate
We don’t have dates yet for the Senate committee markups for their budget reconciliation legislation, but they are under pressure to get a reconciliation bill passed by Memorial Day. We are paying particular attention to the Senate Committee on Health, Education, Labor, and Pensions (HELP), as this committee has been instructed to find at least $1 billion in savings over ten years.
Senate Hearings
- April 29: Senate Veterans’ Affairs Committee hearing on veterans’ mental health
- April 30: Senate Appropriations Committee hearing on biomedical research
The House
The House Committees on Armed Services, Education and Workforce, and Homeland Security will kick off the reconciliation markup process on April 29. House Energy and Commerce Committee is still working to find $880B in savings including what and how much Medicaid spending will be cut.
Based on conversations with the Hill, Republican leadership thinks it can get to $500B over ten years by addressing “waste, fraud, and abuse” within the Medicaid program, according to previous work from the Government Accountability Office.
Other potential sources of savings within the Medicaid program that have been mentioned include work requirements, changes to provider taxes, and penalties on states that provide care for undocumented immigrants. Republicans are saying other non-Medicaid policies, such as cuts to Medicare Advantage plans and policies to address Medicare reimbursement for physicians, are unlikely for reconciliation but could come later in the year.
House Hearings
- April 29: House Education & Workforce Committee markup of reconciliation directives and H. Res. 344, a resolution directing President Trump and HHS Sec. Kennedy to provide documents related to the elimination of the Administration for Community Living
- April 29: House Energy and Commerce Committee markup of 6 health care bills (not reconciliation)
- April 29: House Veterans’ Affairs Health Subcommittee hearing on reforming state veterans homes
- April 30: House Veterans’ Affairs Oversight and Investigations Subcommittee hearing on the VA’s mental health policies
- April 30: House Education & Workforce HELP Subcommittee hearing on ERISA
There You Have It
If you need a break from betting on the likelihood that Congress will pass a reconciliation bill by Memorial Day, the 151st Kentucky Derby takes place on May 3. Do you have plans to watch? Make it a great week!
The way health care is legislated in the U.S. is spread out between multiple committees in Congress. What this means is that getting comprehensive bills passed is a power chess game among the committees, requiring negotiation and knowledge.
As Congress considers legislative action to reform Medicaid, Medicare, and other health care priorities in this Congress, it’s important to understand a committee’s “jurisdiction.” The jurisdiction of each Senate committee is specified in Senate Rule XXV, while each House committee draws from House Rule X. Below you can find each congressional committee’s jurisdiction over health policy, along with a brief description of each committee’s role, issues that each committee covers, and the recent activities of each committee.
Senate Finance Committee
This committee, in addition to various issues related to taxation and trade, oversees health programs under the Social Security Act, such as Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), Temporary Assistance to Needy Families (TANF), and other programs financed by a certain tax or trust fund. The committee also shares or has sole jurisdiction over numerous departments and agencies, including the Department of Health and Human Services (HHS) (which includes the Centers for Medicare and Medicaid Services), and the Social Security Administration. The committee is additionally tasked with reviewing nominations for the HHS Secretary, the CMS Administrator, and other high-ranking appointed positions with HHS and other departments under its jurisdiction. Furthermore, the committee oversees employer-sponsored insurance per the Employee Retirement Income Security Act of 1974.
Recent Activity: Leaders of the Senate Finance Committee are working on how, and even if they want, to address the $2.3 trillion dollars of spending cuts passed in the budget resolutions. There hasn’t been much time this year to address health care in the committee’s legislative agenda given the Committee has been busy with President Trump’s cabinet nominations and trade negotiations.
Senate Health, Education, Labor, and Pensions Committee
Commonly abbreviated as “HELP,” this committee has wide jurisdiction over health care, education, labor and retirement policies, and public welfare. Broadly speaking, the issues it deals with entail biomedical research and development, public health, and occupational health. The HELP Committee also has jurisdiction over matters within the Food, Drug, and Cosmetics Act, including user fees, and the Commissioner of Food and Drugs is subject to the committee’s nomination process.
Recent Activity: Almost all of the committee’s work so far this year has been regarding cabinet and agency-level nominations from the new Trump administration. However, they have been active in the reconciliation process, tasked with identifying $4 billion in spending cuts over ten years. Chairman Bill Cassidy (R-LA) and six Republican senators formed a working group to draft legislation aimed at restructuring the Center for Disease Control and Prevention to better respond to public health needs. The committee is also monitoring proposed changes to the CDC’s Advisory Committee on Immunization Practices (ACIP).
Senate Aging Committee
The committee conducts investigations into fraud, abuse, and exploitation targeting seniors; holds hearings on topics such as retirement security, Medicare, Social Security, elder justice, caregiving, and long-term care; and issues reports and recommendations to influence legislation considered by other committees.
Recent Activity: Recent hearings addressed topics like reducing chronic disease through community-based wellness programs, translating longevity research into actionable policy, and combating opioid use among seniors. The committee also supported legislation such as the SENIOR Act to address loneliness as a critical health issue under the Older Americans Act.
Senate and House Judiciary Committees
Broadly, these committees consider legislation related to the judicial system and play a critical role in providing oversight of the Department of Justice (DOJ) and the agencies under the Department’s jurisdiction, including the Federal Bureau of Investigation (FBI), and the Department of Homeland Security (DHS). In particular, the Senate Judiciary Committee considers executive nominations for positions in the DOJ, FBI, and DHS. The Senate committee also reviews all judiciary nominations, including the Supreme Court, appellate court, and district court nominees. Specific to health care, both committees review matters relating to antitrust law, such as the merger and acquisition of health providers. The committee also oversees the visa programs on which many health care providers rely. The committees also review patent law issues as they apply to drug and medical device manufacturers.
Recent Activity: The Senate Judiciary Committee has focused much of its work this year on nominations. But in the past few weeks, the committee has been focusing on the pharmaceutical benefit manager (PBMs) organizations and their role in health care costs. The committee passed a bill out on April 7th to pressure the FTC to continue with their investigation into PBM business practices.
Senate and House Appropriations Committees
These committees are responsible for the appropriation of revenue for the support of the government. Appropriations is divided into 12 accounts, with two having the most influence on health care: Labor, Health and Human Service, Education, and Related Agencies (LHHS); and Agriculture, Rural Development, Food and Drug Administration, and Related Agencies (Ag-FDA). LHHS dictates funding for all major components of HHS except for the Food and Drug Administration (FDA), which is covered under Ag-FDA.
Recent Activity: The Committees passed a Continuing Resolution (CR) to keep the government running until the end of September of this year. House and Senate Appropriations Committees are also working on drafting their spending bills Fiscal Year (FY) 2026.
Senate and House Budget Committees
These committees focus on the details of the federal budget, drafting of the budget resolution, and compiling and reconciling legislation for all areas including health care. These committees also oversee the Congressional Budget Office (CBO), which “scores” bills according to how much they would cost once enacted. The Senate Budget Committee specifically reviews the nominee for the Director of the Office of Management and Budget.
Recent Activity: Both committees have passed their budgets for fiscal year 2026, setting up for a health care policy heavy reconciliation bill. Note that the Budget Committees are in charge of reconciliation, and while the other committees will weigh in on health care policy changes, Budget can override these policies and make their own legislation.
House Ways and Means Committee
This committee’s jurisdiction is very similar to that of the Senate Finance Committee in that it also oversees health programs under the Social Security Act, such as Medicare, Social Security, and TANF. Ways and Means is the only House committee that has jurisdiction over Medicare Part A because of the Social Security payroll tax. The committee does not have jurisdiction over Medicaid. The committee is considered particularly impactful among congressional members because of its authority on tax issues.
House Energy and Commerce Committee
In addition to being the oldest standing committee in the House of Representatives, this committee has the broadest jurisdiction of any House committee. On health care, it oversees a variety of issues, including Medicare (except Medicare Part A), Medicaid, health insurance (except for employer-sponsored plans), biomedical research and development, drug and device safety, and public health issues. The health-related departments and agencies it oversees are HHS, FDA, the Centers for Disease Control and Prevention, and the National Institutes of Health.
Recent Activity: The House Energy and Commerce Committee has been focusing on drugs lately in their hearings, illicit drugs, pharmacy benefit managers (PBMs). They have not yet marked up any health care bills, but they will be a key player in Medicaid reform this year.
House Education and Labor Committee
This committee has jurisdiction over education and labor issues. This includes all employment-related health and retirement security issues, including employer-sponsored health plans. The committee is also interested in health care workforce issues.
Recent Activity: The committee has held two health care hearings this year – one on the affordability of health care, another on employer-sponsored health plans. They have been mostly focusing on marking up bills to reform universities/colleges in the U.S.
On April 11, 2025, the Medicare Payment Advisory Commission (MedPAC) held the second day of its April 2025 public meeting, which was also the final day of the 2024-2025 cycle of public meetings. Today’s sessions focused on access to hospice care and other services under the Medicare hospice benefit and nursing home quality for Medicare beneficiaries. Today’s sessions were more informative, and no recommendations were presented to or voted on by Commissioners. That said, both topics are clearly of interest to Commissioners, and we expect them to be features of future public meeting sessions.
ACCESS TO HOSPICE AND OTHER SERVICES
The first session focused on access to hospice and certain specialized services for beneficiaries participating in Medicare’s hospice benefit. Specifically, the session focused on four specialized services: dialysis for beneficiaries with end-stage renal disease (ESRD), radiation, blood transfusions, and chemotherapy for beneficiaries with cancer. MedPAC staff shared that the motivation for examining this topic comes from findings that hospice use is substantially lower for decedents with ESRD compared to the overall population. Another motivation for the focus on this topic came from concerns that Medicare beneficiaries may not understand the policy for covering these specialized services, and concerns that the cost of providing these services is higher than the daily hospice payment rate. To examine these concerns, MedPAC conducted a literature review, analyzed available Medicare claims data, and conducted interviews with clinicians, hospice providers, dialysis providers, and family caregivers.
MedPAC staff began the review of their work by providing an overview of the role of these specialized services within the hospice benefit. They shared that Medicare permits, but does not require, hospices to offer these services if they are used for palliative purposes. Staff noted that these decisions are made at the facility level and are dependent on a facility’s governing philosophy on what services fit under the category of palliative care. MedPAC staff also noted that Medicare generally does not have data on how often hospice providers furnish certain services, and there is no data on the costs to provide these services. MedPAC did compare the hospice routine home care (RHC) rate with the average fee-for-service (FFS) payment for dialysis, transfusion, and radiation to patients not enrolled in hospice. They found the average FFS payments for these services generally exceeded the Medicare hospice benefit daily payment rate. MedPAC staff ended their presentation by presenting some potential policy considerations for Commissioners, including the potential for enhanced data reporting, changes to the hospice payment system to address possible disincentives to providing certain services, and developing a program to help beneficiaries transition into hospice care.
MedPAC staff began the review of their work by providing an overview of the role of these specialized services within the hospice benefit. They shared that Medicare permits, but does not require, hospices to offer these services if they are used for palliative purposes. Staff noted that these decisions are made at the facility level and are dependent on a facility’s governing philosophy on what services fit under the category of palliative care. MedPAC staff also noted that Medicare generally does not have data on how often hospice providers furnish certain services, and there is no data on the costs to provide these services. MedPAC did compare the hospice routine home care (RHC) rate with the average fee-for-service (FFS) payment for dialysis, transfusion, and radiation to patients not enrolled in hospice. They found the average FFS payments for these services generally exceeded the Medicare hospice benefit daily payment rate. MedPAC staff ended their presentation by presenting some potential policy considerations for Commissioners, including the potential for enhanced data reporting, changes to the hospice payment system to address possible disincentives to providing certain services, and developing a program to help beneficiaries transition into hospice care.
During the questions and discussion period, some Commissioners asked if comparing the hospice daily payment with the average FFS payments for non-hospice beneficiaries made sense, given how costs under the Medicare hospice benefit tend to be higher at certain times during the course of care. Other Commissioners discussed the uniqueness of dialysis among the services featured in MedPAC’s analysis, since it is critical for keeping ESRD patients alive. There was an agreement among several Commissioners that this could cause a beneficiary to delay entry into hospice. Other Commissioners wanted MedPAC to examine the rationale for why the hospice benefit is carved out of Medicare Advantage and paid for by FFS Medicare. Commissioners also debated having a system where access to specialized services is so dependent on the facility a beneficiary goes to. Some Commissioners expressed concerns that this system leaves many beneficiaries unable to access services that would help ease their suffering. Others countered that the current system allows for flexibility and individualized care and that Medicare should not dictate which services are offered.
MedPAC staff noted that this session will not be a topic in the June 2025 Report to Congress, but they expect it to be a continued topic of interest. The Chairman of MedPAC confirmed that the Commission will continue to look at this issue.
REGULATIONS, STAR RATINGS, AND FFS MEDICARE POLICIES TO IMPROVE NURSING HOME QUALITY
The final session of the April 2025 public meeting focused on a topic that MedPAC has long been interested in improving nursing home quality. MedPAC staff gave an overview of the different regulations and programs promulgated to address concerns about this issue. These include the inspection and certification requirements that nursing homes must meet to participate in Medicare, the star rating system, the skilled nursing facility value-based purchasing (SNF VBP) program, and a Center for Medicare and Medicaid Innovation demonstration aimed at improving nursing home quality. MedPAC staff summarized their findings that there is limited evidence that these regulations and programs have worked. Specifically, staff noted various government and academic studies to support this point.
There was broad agreement among Commissioners that current efforts to address nursing home quality have not been enough to make meaningful improvements. A few Commissioners expressed concerns that part of the star rating system for nursing home quality is based on the results of inspections of facilities, saying that those are really to ensure nursing homes are meeting the minimum standards of quality. There was also support for the standing MedPAC recommendation that the star rating system should include a category to measure beneficiary satisfaction. Other Commissioners highlighted their view that staffing, which is currently a category measured by the star rating system, was an important measurement. The recently vacated nursing home staffing mandate did not come up very much, which is unsurprising given that a federal court recently vacated it. One Commissioner expressed that she was reconsidering her opposition to staffing ratio mandates. However, another Commissioner countered that MedPAC should follow the lead of Congress, which he argued has shown interest in repealing the rule.
Regarding positive recommendations to improve nursing home quality, several Commissioners praised institutional special needs plans (I-SNPs) and high-need accountable care organizations (ACOs) for their record on improving nursing home quality. A few Commissioners also expressed an interest in considering a separate long-term care benefit under traditional Medicare to improve nursing home quality. However, another Commissioner opposed that idea, and others thought it was unlikely to be adopted as a recommendation from Congress in the current environment. The session ended with the MedPAC Chairman stating that although the Commission should be responsive to Congress, it should not shape its work based on what Congress wants to hear. He also said that MedPAC will need to consider whether improving nursing home quality will require more money and ways to improve the system without spending money.
Material from this session will be included, along with previous MedPAC work on this topic, in the June 2025 Report to Congress.
