Medicare's Laboratory Competitive Bidding Demonstration Project Is Likely to be a "Pig in a Poke."

Medicare's Laboratory Competitive Bidding Demonstration Project Is Likely to be a "Pig in a Poke."

We are only 60 days away from January 1, 2006—the day that officials at the Centers for Medicare and Medicaid Services (CMS) are scheduled to announce which two Metropolitan Statistical Areas (MSAs) will be involved in the Laboratory Services Competitive Bidding Demonstration Project.

Most of you know the familiar adage that one should avoid buying a pig in a poke. It is a reminder that buyers should look at the goods before they buy. Unfortunately, the private contractor and those bureaucrats at CMS responsible for the design and implementation of this competitive bidding demonstration program have yet to provide details about the demonstration project to the laboratory industry. For that reason, with each passing day, it appears the laboratory industry will be asked to buy this particular pig in a poke—without an opportunity to see and understand the design of the competitive bidding demonstration project.

Dark Daily observes that no one in the laboratory profession should be surprised at this development. Since 1984, both Congress and Medicare administration have consistently given laboratory testing short shrift in funding, annual cost-of-living increases, and other important issues. Now laboratory testing has been singled out by Congress for the impending competitive bidding demonstration project.

Laboratory managers and pathologists should not overlook another aspect of this demonstration project. At the time it was announced, CMS officials stressed that the laboratory profession would be kept informed and consulted in design and implementation. To that end, an advisory committee of some notable laboratory professionals was named. However, that group has neither been convened nor consulted for their input during the past 12 to 18 months!

What does this mean for the laboratory industry? Once again, government is working behind closed doors to create a program that has the potential to severely damage the financial stability of the laboratory testing profession. And with only eight weeks to announce the details of their program and alert laboratories in the affected MSAs, it is likely that the well-meaning bureaucrats at CMS will birth a flawed competitive bidding demonstration project.

Remember, the same minds that dreamed up the requirement that a laboratory Medicare claim must include the ICD-9 code (which only the referring physician can provide) before reimbursement will be paid are the ones responsible for the design and implementation of the laboratory services competitive demonstration project. So it is probable that this same flawed thinking will result in a laboratory services competitive demonstration project which fails to meet its objectives. It is also probable that the consequences will be corrosive to the financial integrity of individual laboratories located within the two MSAs where this demonstration project is conducted. Your thoughts and insights on this topic are welcome.

Send them along to us: Robert at rmichel@darkdaily.com and Sylvia at schristensen@darkdaily.com.

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