Organized by the National Association of Independent Laboratories, this effort attempts to educate lawmakers about the negative impact of cuts to Medicare Part B Clinical Laboratory Test fees
November 16, WASHINGTON, DC—This week, an intrepid group of clinical laboratory owners gathered in the nation’s capital specifically to visit their Senators and Representatives. The goal was to educate these elected officials about the tenuous financial condition of independent medical laboratory companies.
In particular, ongoing budget cuts to the Medicare Part B Clinical Laboratory Test Fee Schedule are undermining the ability of medical laboratories to deliver top-flight lab test services. This is particularly true for smaller independent clinical laboratories, particularly these located in communities not well-served by national lab companies.
This activity was organized by the National Independent Laboratory Association (NILA), an organization whose membership consists of many local medical lab companies. Your Dark Daily Editor, Robert L. Michel, was invited to address the group and tag along with NILA members as they visited their Senators and Representatives on Capitol Hill.
Survey of Independent Clinical Laboratory Companies
In preparation for this “NILA March on Washington,” as the organizers titled their educational program, a survey of independent clinical lab companies was commissioned by NILA. This survey was conducted by researchers from George Washington University’s (GWU) Department of Public Health and School of Public Health. A total of 73 independent clinical laboratory companies from different U.S. regions participated in this survey. GWU researchers also contacted three lab companies to conduct in-depth interviews.
This week, the National Independent Laboratory Association is conducting “NILA’s March on Washington.” Owners of regional and community independent clinical laboratory companies have assembled and will be visiting their respective Senators and Representatives to educate them about the negative impact that recent and pending cuts to the Medicare Part B Clinical Laboratory Fee Schedule will have on the lab industry and its ability to provide quality services to physicians and Medicare beneficiaries.
Several findings reveal attributes about the ever-shrinking number of local independent clinical laboratory companies. This is a segment of the medical laboratory testing profession which is little studied. The survey revealed these facts:
- Community and regional independent clinical laboratory companies tend to be small. Typically they generate less than $10 million in annual revenue or perform fewer than one million tests per year.
- As a source of employment, these independent clinical lab companies reported, on average, a payroll of 272 total employees. This includes full- and part-time employees.
- Notably, half of these community and regional independent lab companies estimate their average annual profit margins to be between zero and 3%.
- Another notable finding was that this group of smaller lab companies is an important provider of medical laboratory testing services to nursing homes and skilled nursing facilities throughout the United States. This market segment was abandoned by public lab companies during the 1990s.
- Two-thirds of the labs responding to the survey stated that, in response to the cuts in Medicare Part B Clinical Laboratory Test Fees in 2010 and 2011, they had to cut back staff and reduce hours. Many labs reported that they had reduced the number of services provided, including services for skilled nursing home clients.
Two Days of Learning and Lobbying by NILA’s Medical Lab Owners
NILA members and medical laboratory owners will spend two days this week in Washington, DC. The first day was spent in an educational session that included presentations on how the business model for clinical laboratory testing is changing, an assessment of the current contracting practices of health plans and private payers, and preparation for visits to members of Congress.
The second day will see NILA members fan out across Capitol Hill to visit their respective Senators and Representatives. Your Dark Report Editor will be participating in some of these visits. The knowledge gained about unfolding legislative events for the lame duck session and the agenda of the new Congress will be presented in an upcoming Dark Daily e-briefing.
Your Dark Daily Editor,
Robert L. Michel
e-mail: rmichel@darkreport.com with your comments.
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