Managed Care Reimbursement

Lab Lawyers Flag Three Important Questions for Medicare Bidders Meeting on December 5

In just a few days, the bidder's meeting for the Demonstration Project For Competitive Bidding of Clinical Laboratory Services  will take place. It is scheduled for Thursday, December 5, from 8:00 a.m. until 5:00 p.m. PST in San Diego.  During the meeting, the Centers for Medicare and Medicaid Services and its subcontractor RTI International will provide details about the project design and implementation and be available to answer questions.

Dark Daily wants to do its part to help laboratories understand this complicated government demonstration project, which has many unexplained elements and likely a few landmines for unwary laboratory bidders. .That is why we turned to Rick Cooper, Manager of the Health Law Practice Group for McDonald Hopkins.  Cooper is advising a number of current lab managers who intend to participate in the competitive bidding demonstration.  We asked Cooper to give us three essential questions that lab bidders should ask of CMS at the meeting.  His comments follow.

One problem area with the demonstration project is that participating labs must bid on all tests identified in the bidding documents and not just a portion of them.  This poses a problem for laboratories that don't provide the full array of demonstration tests, such as specialty or niche labs that only provide a fraction of the tests.  This is likely to be one of the most controversial points about the structure of the demonstration project, because it may eliminate some specialty and niche labs from participating.  If key speciality or niche labs don't participate, it could impact quality and access to relevant tests by Medicare patients.  For that reason, Cooper advises that specialty and niche lab managers attending the bidders' conference should ask these two questions:

1a.  Why is CMS requiring specialty and niche labs that only provide a fraction of the tests in the demonstration to submit an application covering all the tests? 

1b.  Doesn't this requirement just force specialty labs to either not bid or go through the expense and complexity of sub-contracting for services they will never market or bill for?

Another area of concern with the demonstration is how the documentation addresses laboratory capacity as a factor.  Cooper recommends labs should ask these questions about capacity:

 2a.  If a lab provides less than the full array of the services (meaning it will have to sub-contract for the balance), how significant is it to that lab's success in the bidding process whether they subcontract with a small to medium-sized lab or a with a larger lab, given the substantially different levels of capacity represented by each subcontracting source?

 2b.  When CMS talks about capacity being a factor, what exactly does that mean?  Does it mean that larger laboratories have an advantage over small or medium sized labs?

The next round of questions center around reimbursement reduction.

3a.  Does the CMS have a sense or estimate of the percentage reimbursement reduction that will resolve from the competitive lab process? 

3b.  Does CMS have a target that it is looking towards as likely?

In addition to these three questions, Cooper added three more questions that would be highly useful to laboratories planning to attend the bidding conference.  We thought they were equally important and will provide those questions in tomorrow's Dark Daily e-briefing.   Stay tuned!

Related Links:

Details for Demonstration Project For Competitive Bidding of Clinical Laboratory Services