PAMA and the Downstream Impact of Lab Reimbursement on Cancer Care Access

Key Takeaways

• The Protecting Access to Medicare Act's (PAMA's) impact extends beyond a limited set of tests: Medicare laboratory reimbursement cuts affect the entire diagnostics ecosystem, limiting laboratories’ ability to invest in innovation, infrastructure, and timely test delivery—even for advanced and emerging precision diagnostics.
• Access and equity are at risk, especially in rural and underserved areas: Smaller, physician-based, and hospital laboratories often lack the administrative infrastructure to comply with PAMA reporting requirements, making them more vulnerable to cuts and threatening patient access to essential testing.
• Early detection and long-term outcomes depend on sustainable diagnostics policy: Precision laboratory testing enables earlier diagnosis, better treatment selection, improved quality of life, and potential cost savings—benefits that could be undermined if reimbursement systems fail to keep pace with innovation.

Please introduce yourself by stating your name, title, and any relevant experience you’d like to share.

Yuri Fesko, MD: Hi, I am Yuri Fesko. I am the senior vice president and chief medical officer at Quest Diagnostics. By training, I am an internal medicine hematologist/oncologist.

I've been with Quest about 7 years. Prior to that I was with Duke University Medical Center. I was their chief for community oncology in Wake County when I left.

How do Medicare reimbursement policies like PAMA directly influence whether patients can access advanced cancer diagnostics—especially newer molecular and blood-based tests?

Dr Fesko: Many of the tests that we're talking about, particularly cancer markers, may be within the clinical lab fee schedule, which would be part of PAMA. That would be one effect. If you think about some of the biomarkers that are used to help to determine if a patient is having rises or falls of metastatic disease in pancreatic or colon cancer, those would be in there.

More importantly, because of PAMA’s impact to the larger industry, even advanced tests, which may not be part of the 800 tests that are in PAMA, will be affected simply because the laboratory reimbursement is such that it's going to affect all labs. It's going to potentially cause contraction and an inability to invest in research and development and delivery through electronic medical records, as well as delays in getting the laboratory test to the laboratory or even getting the results back.

People tend to think that it's just those 800 biomarkers, but the implications are much larger than that because the cuts that all laboratories would face will cause contractions in a lot of the advanced testing that is being performed or developed. It will slow down its implementation because there's a strong withdrawal from the system so quickly.

The American Cancer Society recently joined patient and consumer groups in supporting PAMA reform. Why is that endorsement significant, and what does it signal about how this issue has evolved beyond a laboratory reimbursement debate?

Dr Fesko: The American Cancer Society very much understands that one of the biggest problems that we have in oncology care, in general, is access. A lot of patients, particularly in more rural areas, already have a very difficult time accessing oncology care. There is a significant shortage of oncologists, there are shortages of extenders, and there are deserts where patients have to travel substantial distances to get oncology care.

Part of their concern is that PAMA looks to potentially make that worse. If we think about PAMA in its current state, one of the concerns is that smaller laboratories and smaller physician-based laboratories, as well as hospital-based laboratories, particularly in much more rural areas, are likely to see very negative effects.

That is coupled with the fact that in oncology, you have patients that are acutely needing treatment. A lot of times, they are doing much better. They're not inpatient, but they are sicker. They have a lot of side effects from the therapy as well as the illness. Anything that's going to make accessibility to the physician or the laboratory data more difficult is just going to make the entire treatment plan harder.

The American Cancer Society recognizes that things like a complete blood count (CBC) are just basic blood tests, but they are very important in oncology care because you can have low blood counts, and that can increase the patient's chances of infection.

If those things are affected and you have delays or you have the inability for a Medicare patient to easily access those tests, it can cause really catastrophic things down the line, which the American Cancer Society is very concerned about.

Cancer care is increasingly reliant on precision diagnostics—such as genomic profiling and circulating tumor DNA testing—to guide treatment and monitor disease. What are the risks to patient outcomes if reimbursement systems fail to keep pace with these innovations?

Dr Fesko: What we are starting to see is that laboratory-based diagnostics are getting to a point where they can help to enable precision medicine, where either things like the drug is likely to work, the patient has that particular target that you're looking for, or there is dentification of disease in very early phases before it is causing symptomatology that is catastrophic. Those can be things like metabolic diseases, where we're starting to understand that there are some laboratory findings that you can pick up before the patient goes on to develop fatty liver disease from diabetes or even the side effects of diabetes, like kidney disease or retinopathy; it can be picked up much earlier.

The concern is that by taking and basically contracting this portion of the market, you're going to limit the accessibility to say, "Listen, I have the diagnostic insights to try to prevent or treat the disease when it is most treatable, before the patient has the longer-term sequelae of the disease."

Even in things like Alzheimer disease, there are now some biomarkers which can enrich for the population that looks like they have Alzheimer disease. There are studies that are being done to show that it can work as well as imaging scans, such as PET and MRI scans. That's very important because a blood test is much more accessible to the population than a PET scan. You have to go to a specialized center to get that done. This allows a lot more patients access to the treatments that they may benefit from and help us to, in the Alzheimer example, try to keep patients from requiring around-the-clock care in a nursing home.

Those are things that, as a society, we have to think about. Do we really want end-stage disease? No, we don't. It's very expensive. It causes a lot of quality-of-life issues. If we can identify these things early, we have the best chance of treatment and, potentially, the best chance at bending the cost curve here in health care.

As Congress considers the RESULTS Act ahead of the January 30 deadline, what should policymakers understand about the downstream impact PAMA reform could have on equity, early detection, and long-term cancer outcomes—particularly for Medicare and underserved populations?

Dr Fesko: What was probably not well understood when PAMA was first initiated is the significant administrative burden required to do the reporting. What happened with PAMA is that you had large laboratories that had the administrative infrastructure to do it but tended to be absolutely the lowest-cost providers of laboratory services. However, there are many other laboratory providers, particularly in rural areas and more underserved areas. Those laboratories had an inability to report; they did not have the infrastructure to do it. By doing it this way and then basing the PAMA cuts on just the lowest of the low, those places are the most vulnerable to the potential cuts.

They did not submit. They may have higher costs because the infrastructure may not be in place. There may be more logistics. It may not be as big a laboratory because it's in a rural area. Those will be the ones that are going to be the most affected by this. Those are the ones where the population is already struggling to get health care. We're struggling to get providers to go to these locations, adding another layer of burden to this. Basically, we’re saying, "Listen, if it's a Medicare patient, we really can't perform the laboratory testing. The fee structure is such that we can't do it. It's hast to be shipped out to Washington, DC, or Atlanta or something, and it's going to take 3 or 4 days to come back."

It's another level of complexity for these providers. Those are the downstream implications that folks in Washington have to understand. Yes, if you are in the metro New York area, Boston, or Atlanta, for example, we should be okay. But once you start to leave the metroplexes, it gets much more difficult to service these patients, and the providers in those locations are struggling now. What we're not trying to do is make it more difficult for Medicare patients to receive treatment, early diagnosis, and the laboratory data that they need to get their treatment. But that's where we're headed if we don't understand the ecosystem that services the medical community across the country.