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Controversies over Diagnostics Renewed

Medmarc Insurance Group

June 28, 2021

Controversies over Diagnostics Renewed 

The diagnostic test played a vitally important role during the COVID-19 pandemic, but controversy has followed in vitro diagnostics nonetheless. The question of the FDA’s authority to regulate lab-developed tests is back in play on Capitol Hill, while a trade association has appealed to reopen a lawsuit against the U.S. government over Medicare rates for lab-based diagnostics. 

Sen. Rand Paul (R-Ky.) announced recently that he had reintroduced the Verified Innovative Testing in American Laboratories (VITAL) Act, which would provide labs the leeway to qualify tests solely via the Clinical Laboratory Improvement Amendments (CLIA). Paul cited the COVID-19 pandemic as an example of how “bureaucratic hurdles” have hampered access to critically needed tests, although the scope of the legislation is not limited to public health emergencies. 

The legislation stipulates that all aspects of LDT procedures will be regulated under the provisions of the Public Services Act related to CLIA requirements, but also that FDA shall regulate no aspects of these procedures, including during public health emergencies. The legislation would disallow FDA regulation of FDA-approved or cleared test kits that are modified by the testing lab as well.

The VITAL Act has been introduced to the Senate previously, but the reintroduction of the bill was preceded by a May 11 letter from three members of the House of Representatives to the Department of Health and Human Services. The letter petitioned HHS Secretary Xavier Becerra to reverse the Trump administration’s August 2020 rescission of the FDA’s authority to regulate LDTs. The letter omits any mention of the legislation drafted by one of the signers, Rep. Diana DeGette (D-Colo.), that would explicitly empower the FDA to regulate LDTs, the VALID (Verifying Accurate, Leading-edge IVCT Development) Act of 2020.

ACLA Files Another Appeal over PAMA Rate Reset

The American Clinical Laboratory Association announced recently that it had filed a notice of appeal of its lawsuit against the Department of Health and Human Services regarding rates paid for clinical lab diagnostic services. The ACLA is contesting the method by which the Centers for Medicare & Medicaid Services collected private payer rates for lab tests, which are used in calculating Medicare rates for those tests.

 

The lawsuit began in the U.S. District Court for the District of Columbia in 2017, challenging the CMS response to the Protecting Access to Medicare Act (PAMA) of 2014. The district court determined that the statute barred a ruling on the method of establishing payment amounts, although the U.S. Court of Appeals later overturned that finding. The ACLA statement indicates that the district court dismissed the lawsuit again in a decision dated March 30, 2021. That second rejection of the lawsuit by the district court drew on the same conclusions rejected by the appeals court, the ACLA statement indicates, namely lack of subject matter jurisdiction. The ACLA’s second filing with the appeals court is dated May 28. 

ACLA President Julie Khani said that as the court case goes forward, “it is even more critical for Congress to take legislative action on PAMA reform.” Khani said the ACLA will continue to work with policymakers to establish a Medicare clinical lab fee schedule that “is truly representative of the market and supports continued innovation and access to vital laboratory services.”

 

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