Managed Care Reimbursement

Three More Questions to Ask at Thursday's Lab Competitive Bidding Demonstration Meeting

In advance of Thursday's bidder's meeting in San Diego for the Demonstration Project For Competitive Bidding of Clinical Laboratory Services.  Dark Daily is providing useful questions that should be asked of government officials and their contractor.  Lab legal expert Rick Cooper, Manager of the Health Law Practice Group for McDonald Hopkins recommended three questions in yesterday's Dark Daily e-briefing. Here are the additional three questions he believes would be helpful to potential laboratory bidders attending the conference.

4.  Why was $100,000 picked as the threshold for laboratories participating in the demonstration? 

That number seems to be a relatively low dollar threshold.  Even small labs providing a relatively few number of the covered tests will be required to bid or will have to forfeit the ability to bill Medicare. 

5.  What will CMS do if some of the winning laboratories drop out after they have won - either on their own or because of removal by CMS for breach of the terms and conditions?  Will there be a re-opener under such circumstances?

The integrity of the demonstration could be significantly compromised if laboratories drop out or are removed.  The sample of laboratories could end up being far too small to make statistically significant inferences.  Service and access could also be impacted.

6. How is the CMS defining financial stability?  What particular financial factors or features do they consider to be the most important? 

This information could be highly useful for smaller and newer laboratories in the demonstration area.  If CMS reveals that it will not consider labs that have not been in operation for longer than six months, for instance, those laboratories need not waste their time attempting to participate in the demonstration.

Cooper's questions echo some questions and comments that Dark Daily overheard earlier this year at the open door meeting about the draft bidder's package.  Clearly, many questions remain about the vague terms used in the bidder's package.  Without further explanation of such items in the bidding document, the demonstration will not likely achieve its stated goals.  A poorly-designed and poorly-implemented demonstration project has the potential to do much harm to laboratories currently serving the San Diego-Carlsbad-San Marcos MSA (Metropolitan Statistical Area).

As well, it is in the best interest of CMS to conduct a fair, objective, and transparent bidding process.  In selecting San Diego, CMS has already failed to provide transparency to the public as to why this region, relative to the other regions it has identified as potential sites for the Demonstration Project For Competitive Bidding of Clinical Laboratory Services.  That is not a good starting point for the remainder of this effort, which only gets more complicated and obtuse at each step.

Related Links:

Details for Demonstration Project For Competitive Bidding of Clinical Laboratory Services