Feb 8, 2017 | Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Pathology, Laboratory Testing
In vitro diagnostic manufacturers and medical distributors share concerns, along with other types of medical labs in nation’s small cities and hinterlands that include rural hospital labs and physician office labs (POLs) because, along with financial erosion, there is the potential of reduced access by Medicare beneficiaries to clinical lab tests where they live
SAN ANTONIO, TEXAS—Owners and managers of community and regional independent lab companies and community laboratories gathered here last week at a lab conference to assess what many believe is a bleak future. That’s because, in less than 11 months, medical laboratories across the United States will be dealing with unprecedented price cuts to the Medicare Part B clinical laboratory fee schedule (CLFS) and how those price cuts erode the financial stability of these essential labs, often the only local medical laboratory serving smaller communities and rural areas throughout the nation.
The number one financial threat of concern to these community and regional lab owners is how the Protecting Access to Medicare Act (PAMA) rule for private-payer market-price reporting will be used by the Centers for Medicare and Medicaid Services (CMS) to make fee cuts—effective on January 1, 2018—that will be financially devastating to the nation’s small and mid-sized community and regional labs, rural hospitals, some individual and group physician practices, and community hospitals—while causing increased market concentration that benefits the nation’s two dominant publicly-traded lab companies. (more…)
Dec 12, 2016 | Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing
All hospital labs need to understand the negative financial impact to their labs and have a plan to absorb the fee cuts and remain clinically and financially viable
If you believe some experts, in just 13 months many of the nation’s hospital medical laboratory outreach programs will experience a financial disaster that could put them out of business and reduce Medicare patients’ access to lab testing services. This event happens on January 1, 2018, when Medicare officials implement substantial cuts to the Part B Clinical Laboratory Fee Schedule (CLFS).
These fee cuts are the result of the section of the Protecting Access to Medicare Act (PAMA) that requires the Centers for Medicare and Medicaid Services (CMS) to collect private-payer lab test price data from the nation’s medical laboratories and use that data to establish fees for the CLFS. CMS officials estimate that the fee cuts will reduce payments to labs by as much as $400 million in 2018.
What puts the laboratory outreach programs of the nation’s hospitals and health systems at significant financial risk is the fact that CMS, as verified by reports issued by the Office of the Inspector General (OIG), intends to reduce fees on the 25 highest-volume highly-automated lab tests that make up 59% of what Medicare spent on clinical laboratory tests in 2014.
Stated differently, the OIG says that, in 2014, Medicare paid a total of $7 billion for clinical laboratory tests. Of this total, the Medicare program paid $4.1 billion for the top 25 tests. In a report issued in September, the OIG wrote, “Changes in the Medicare payment rates for these 25 tests could have a significant impact on overall Medicare spending for lab tests when the new payment system for lab tests goes into effect in 2018.” [Italics by Dark Daily.] (more…)
