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Published on July 16, 2007
Contact: Gretchen Schaefer
Phone: 202-354-7131 or 202-236-4410
E-mail: gschaef@cap.org
CLC Opposes Laboratory Competitive Bidding Demo
Washington, D.C.—Members of the Clinical Laboratory Coalition (CLC)—organizations committed to ensuring patient access to high quality clinical laboratory testing—remain united in our opposition to the Medicare clinical laboratory competitive bidding demonstration project being implemented by the Centers for Medicare and Medicaid Services (CMS). The CLC therefore calls on Department of Health and Human Services Secretary Leavitt to stop, and Congress to repeal, the demonstration project.
After nearly two decades and three major consulting projects, CMS still is unable to answer some of the most fundamental questions and concerns about competitive bidding for clinical laboratory services. The agency has failed to provide specific plans and assurances as to how:
- The quality of laboratory testing, and thus the accuracy of disease detection and diagnosis for senior citizens, will be safeguarded;
- Access to clinical laboratory testing for Medicare beneficiaries will be guaranteed, particularly for the most vulnerable populations, such as nursing home residents; and
- Market competition will be enhanced, not undermined.
We are pleased that CMS set aside two hours today to meet with interested stakeholders, provide further information about the demonstration, and listen to our concerns. Unfortunately, this was the first time in almost two years that CMS has initiated dialogue with our organizations. In addition, even with today’s dialogue, CMS still has failed to answer a number of very serious questions and concerns that we have raised about the proposed demonstration design, many of which we have raised repeatedly since August of 2005.
CMS’s inability to answer these questions and concerns in its latest draft “Bidders’ Package” shows what we have known since Congress created the demonstration project as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003: No bidding model for clinical laboratory services, whether limited regionally or nationwide, will meet the objective of providing clinical laboratory services at fees below current Medicare reimbursement rates, while simultaneously maintaining quality and access to care.
Clinical laboratory services are just that—a service, not a commodity. These complex medical services require significant training and expertise to perform and interpret tests accurately, with the end goal of positively affecting patient outcomes. Moreover, laboratory services are performed in a variety of settings that include hospitals, small and large reference laboratories, and physician office laboratories. Medicare beneficiaries receive over 250 million laboratory tests each year, and there are over 1,000 different tests, performed by more than 13,000 hospital, national, and community clinical independent laboratories—not to mention over 100,000 physician laboratories. No single laboratory performs every test, serves all Medicare beneficiaries, or reaches all areas of the nation.
If CMS continues down the path to implementation and Congress fails to repeal the demonstration, the quality of our seniors’ health care would be at risk. Approximately 70 percent or more of patient diagnoses are based on a clinical laboratory test result; yet competitive bidding likely would make an already highly concentrated but competitive clinical laboratory market less competitive. The demonstration’s current design would force approximately 90 percent of all clinical laboratories serving in a demonstration site to bid—including “small business” laboratories defined by CMS as supplying a threshold of just $100,000 in Medicare lab tests annually—while promising only a limited number of “winners.” “Non-winners” would not be permitted to participate in the Medicare program for three years, even though Medicare commonly comprises at least 40 percent of a small clinical laboratory’s business. The continued operations of community and regional laboratories that qualify as small businesses under the Small Business Administration’s definition (i.e. less than $12.5 million in annual revenues)—laboratories that serve some of the most vulnerable populations, including nursing home residents—would be jeopardized. Not only are these laboratories important to the elderly and infirm individuals whom they regularly serve, but they also are crucial pieces to our nation’s health care infrastructure, particularly during times of natural disaster or bioterror crises when rapid response is required.
American Association of Bioanalysts/National Independent Laboratory Association
American Association for Clinical Chemistry
American Clinical Laboratory Association
American Medical Technologists
American Society for Clinical Laboratory Science
American Society for Clinical Pathology
American Society for Microbiology
Cleveland Clinic
Clinical Laboratory Management Association
College of American Pathologists
Mayo Clinic
The Clinical Laboratory Coalition is comprised of organizations committed to ensuring access to quality laboratory services for all Americans. For more information on the CLC and its members, please contact Hilary Hansen at (202) 230-5186, or hilary.hansen@dbr.com.
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