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Clinical Laboratories and Pathology Groups

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News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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Lobbying on Behalf of Clinical Laboratories Improves Medicare’s Outpatient Payment Rules

While proposals might change before the final CMS draft, lobbyists see potential for improving Medicare payment totals and structures in the upcoming 2018 outpatient rule and physician fee schedule

At this time, efforts by medical laboratories to lobby and educate Medicare officials and members of Congress about the flaws in the Medicare program’s market study of what private health insurers pay for clinical laboratory tests have failed to trigger positive action on this matter. But despite the bad news concerning that issue, there is a positive development with a proposed rule that would change which lab tests should be included in bundles paid under the Hospital Outpatient Prospective Payment System (OPPS).

The details of how the clinical laboratory industry worked to educate the right decision-makers within the federal Centers for Medicare and Medicaid Services (CMS) was part of a story published by Axios. The story described how several different healthcare specialties conducted educational and lobbying campaigns and succeeded in getting favorable decisions on the matters of concern.

Changing the Medicare 14-day Medical Lab Test Billing Schedule Regulation

Though the complete Axios article covers several categories of healthcare lobbying, “The Win for Clinical Labs” section lists lobbying activities in 2017 on behalf of the medical laboratory industry. It covers:

·       “Who met with the feds: Lobbyists with lab testing companies Myriad Genetics and Veracyte, pharmaceutical company Boehringer Ingelheim, and lobbying firm Todd Strategy, federal meeting records show.

·       “What they wanted: An open comment period on the ‘14-day’ regulation, likely with the goal of adjusting or eliminating it, according to a lobbying presentation.

·       “The 14-day regulation stipulates that if lab tests are ordered within 14 days of a patient’s discharge from a hospital, the hospital must bill Medicare for the tests. The lab then seeks payment from the hospital. Anything after 14 days, the lab can bill Medicare directly.

·       “The companies argued in the presentation that the rule limits access to lab tests because hospitals may be reluctant to bill Medicare for labs after patients leave.

·       “What they got: An open comment period, and a modification to the policy that would allow labs to bill Medicare directly for some tests.”

One success slated to enter the OPPS relates to the 14-day rule/Date of Service (DOS) determinations, which set strict billing requirements for diagnostic tests based on when the tests are ordered. Medical laboratories, pharmaceutical companies, and lobbying strategists teamed up to streamline the current regulations and improve how billing works for a range of Advanced Diagnostic Laboratory Tests (ADLTs).

Lobbying participants included:

·       Biodesix of Boulder, Colo.;

·       Boehringer-Ingelheim of Ridgefield, Conn.;

·       Guardant Health Inc. of Redwood City, Cali.;

·       LUNGevity Foundation of Chicago;

·       Myriad Genetics of Salt Lake City, Utah;

·       Veracyte of South San Francisco.

The graphic above was taken from a May 2017 presentation to policymakers at HHS and CMS, which focused on delays created by the 14-day rule. It described existing determinations as “developed for the old world of hospital and reference laboratories.”

Presentation speakers also cited concerns that current payment requirements might limit access to testing and delay diagnosis. As precision medicine often involves major illnesses—such as cancer—swift testing, diagnosis, and treatment are essential parts of improving patient outcomes.

Results of the Lobbying Effort Could Bring Relief for Hospitals and Clinical Laboratories

CMS posted their proposed OPPS rules for 2018 in July and created an open comment period, which closed in September.

In analysis of the current proposed rules at Health Law and Policy Matters noted, “The proliferation of molecular pathology testing technology, coupled with the implementation of the packaging policy a few years ago, has strained relationships between many hospitals and laboratories.”

The analysis outlined three currently proposed approaches from CMS:

·       The first crates exceptions to current DOS rules for molecular pathology tests and ADLTs under certain conditions.

·       The second only applies exemptions to ADLTs citing a lack of “access to care” concerns for molecular pathology tests.

·       The third adds an exception for molecular pathology tests and ADLTs excluded from OPPS packaging, but applicable to “under arrangements” rules.

Other Lobbying ‘Wins’

Axios noted two other potential wins related to this year’s lobbying efforts.

1.     Fresenius Medical Care, owner of National Cardiovascular Partners, opened public debate regarding pay rates for heart procedures in outpatient heart labs and ambulatory surgery centers.

2.     CMS and HHS awarded Photocure, manufacturer of Cysview (FDA-approved technology for the detection of bladder cancer), a proposal for add-on billing codes to increase pay for bladder cancer procedures using their drug solutions.

However, these are just proposals. There is no guarantee they will reach the final draft for 2018—if at all.

Lobbying Expensive but Gets Results

While lobbying is an important way to shape the regulatory landscape surrounding healthcare, it is time- and money-intensive. In the presentation from Todd Strategy, LLC, regarding the 14-day rule, the speakers established a timeline spanning two years of administration and congressional outreach. They also pointed out that similar requests were made in 2016 for the calendar year 2017 OPPS rules that were never implemented.

As healthcare continues to shift toward personalized approaches, and diagnostic testing becomes an increasingly important aspect of diagnosing and treating disease, laboratories and healthcare groups must continue to identify opportunities to both increase revenue and streamline operations to continue growing.

With innovative medical laboratory tests and new diagnostic technologies emerging at a rapid pace, the opportunity to use lobbying to educate lawmakers and government regulators continues to be a viable tool for clinical laboratories interested in speeding change and protecting the ability of clinical laboratories to serve physicians and their practices—particularly because the system is known for its complex requirements and slow-moving bureaucracy.

—Jon Stone

Related Information:

The Subtle Lobbying Wins in Medicare’s Outpatient Rule

Impact of Date of Service “14 Day” Rule on Diagnostics

Hospital Outpatient Prospective Payment – Final Rule with Comment and Final CY2017

14 Day Rule Frequently Asked Questions

CMS May Decide to Permit Labs to Bill for Certain Tests Provided to Outpatients

Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs

Your Quick Guide to Understanding the Weird 14 Day Rule (CMS Billing for Lab Tests)

Date of Service (DOS) for Clinical Laboratory and Pathology Specimens