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Medicare Part B

Medicare Part B medical insurance helps pay for some services and products not covered by Part A (hospital insurance) for Americans aged 65 and older who have worked and paid into the system. It also provides health insurance to younger people with disabilities.

Part B coverage begins once a patient meets his or her deductible ($147 in 2013), then typically Medicare covers 80% of approved services, while the remaining 20% is paid by the patient, either directly or indirectly by private Medigap insurance.

For clinical labs and pathology groups, Part B covers laboratory and diagnostic tests. Laboratory tests include certain blood tests, urinalysis, tests on tissue specimens, and some screening tests. They must be provided by a laboratory that meets Medicare requirements.

Complex rules are used to manage the benefit, and advisories are periodically issued which describe coverage criteria. On the national level these advisories are issued by CMS, and are known as National Coverage Determinations (NCD). Local Coverage Determinations (LCD) apply within the multi-state area managed by a specific regional Medicare Part B contractor, and Local Medical Review Policies (LMRP) were superseded by LCDs in 2003.

Medicare Part B payments make up about 15% of the revenue of the two biggest national lab companies. By contrast, it is common for community labs to have between 30% and 65% of their revenue come from Medicare Part B payments.

Part B coverage can also be provided by private insurers through Medicare Advantage Plans. Enrollment in private Medicare Advantage plans has more than doubled since 2006, according to the New York Times. As these plans gain popularity, clinical labs and pathology groups continue to find themselves without access to patients they once served. Medicare beneficiaries now enrolled in Advantage plans comprise nearly one-third of all Medicare beneficiaries.

Generally speaking, growth in Medicare Advantage enrollment favors the national labs, with private insurers providing them exclusive network contracts. This means less market access to these patients by community labs.

OIG Issues New Report on Medicare 2023 Lab Spend

CEO SUMMARY: When the Office of the Inspector General (OIG) at the Department of Health and Human Services (HHS) issued its latest report on Medicare spending in 2023 for clinical laboratory tests, it attracted relatively little attention from the lab industry. Maybe other issues—such a…

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Pathology Compensation in Different Settings, including Hospitals

CEO SUMMARY: This second installment on the series about boosting pathologist compensation uses data collected during a survey of 1,400 pathologists in 230 pathology practices by the Panel of National Pathology Leaders (PNPL). Two experienced pathology consultants identify the most effect…

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Several Times, Feds Tried to ‘Redirect’ Lab Activities

CEO SUMMARY: Regulation of laboratory developed tests (LDTs) by the Food and Drug Administration (FDA) may turn out to be one of the most impactful federal laws or regulations ever promulgated, so far as it pertains to clinical laboratories.cThe Dark Report provides this historical look b…

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Actions Pathologists Can Take to Protect Their Income

CEO SUMMARY: Pathology groups may feel their income is under attack from lower Medicare reimbursement rates and rising practice costs. But steps to protect that income can include carefully determin…

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OIG’s Issues New Opinion on Use of Gift Cards for Lab Specimens

CEO SUMMARY: This new Advisory Opinion from the Office of Inspector General (OIG) outlines a narrow situation in which it may be allowable for clinical laboratories to use gift cards to encourage pa…

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PAMA Cuts Have Simply Been Kicked Down the Road

PAYMENT RATE CUTS FOR CLINICAL LABORATORY TESTS, called for under the Protecting Access to Medicare Act of 2014 (PAMA), have been avoided temporarily—again.  A down-to-the-wire bill in Congress to keep the federal government funded into the new year in…

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Congress Averts PAMA Cuts to Lab Test Rates for 2023

CONGRESS ENACTED LEGISLATION LAST MONTH that suspends implementation of the next round of price cuts to the Medicare Part B Clinical Laboratory Fee Schedule (CLFS) that was scheduled to take effect on Jan. 1. This is a welcome development for the medical laboratory industry….

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VALID and SALSA Acts Still Pending in Congress

CEO SUMMARY: Both the pending VALID Act and SALSA Act continue to push ahead as 2022 comes to an end. Meanwhile, a new bill centered on the Physician Fee Schedule may protect pathologist payments. These three different proposals share something in common:…

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PAMA Cuts Might Be Reduced to Zero for 2023

CEO SUMMARY: Congress may soon vote on a new bill that permanently reduces the amount of price cuts to Medicare Part B lab test prices, as specified under the Protecting Access to Medicare Act of 2014 (PAMA). The Saving Access to Laboratory Services Act (SALSA) eliminates a 15% paym…

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Coverage, Reimbursement Still Difficult for New Lab Tests

CEO SUMMARY: Bringing a new proprietary diagnostic test to market is an arduous process. It takes patience and planning to complete the journey from test development to payer reimbursement. This slow process stems from the fact that the healthcare reimbursement system is fragmented,…

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