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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area managed by a specific regional Medicare Part B contractor, and Local Medical Review Policies (LMRP) were superseded by LCDs in 2003.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.
COLA: GAO Should Address PAMA’s Effect on Patients
CEO SUMMARY: In a recent statement, COLA, an organization that accredits clinical labs, expressed strong concern about how a report from the Government Accountability Office did not address how the Protecting Access to Medicare Act of 2014 (PAMA) affects patients’ access to testing, esp…
PAMA Price Cuts Reduce Revenue at LabCorp, Quest
This story was updated from the original on March 27, 2019, and includes corrected information in three places. CEO SUMMARY: In their respective earnings reports for the fourth quarter and the full year of 2018, executives at both Laboratory Corporation of America and Quest Diagno…
PAMA Price Cuts Reduce Revenue at Two National Labs
This is an excerpt from a 1,500-word article in the Feb. 25, 2019 issue of THE DARK REPORT. The full article is available to members of The Dark Intelligence Group. CEO SUMMARY: In their respective earnings reports for the fourth quarter and the full year of 2018, executives at both La…
Critical Lessons for Labs That Report PAMA Medicare Data
This is an excerpt from a 1,565-word article in the Feb.4 issue of THE DARK REPORT. The full article is available to paid members of The Dark Intelligence Group. CEO SUMMARY: With most hospitals now included as “applicable laboratories” in the PA…
In Tough Times, All Labs Need Success Strategies
By any measure, it is tougher today for clinical laboratories and anatomic pathology groups to generate the revenue needed to deliver state-of-the-art diagnostic testing services while remaining financially viable. Four recent trends prove the point. First, every year, the Medicare program and priva…
Useful Lessons for Labs That Report PAMA Data
CEO SUMMARY: Will clinical labs heed the lessons learned from the first PAMA private payer market price reporting cycle that CMS conducted in 2017? One major difference is that the definition of applicable laboratories now includes most hospital labs. This creates the opportunity for a la…
Why PAMA May Be Poised to Disrupt Lab Industry
CEO SUMMARY: This will be one of the most challenging years facing the clinical lab industry since the early 1990s, when closed panel HMOs were the disruptive force that generated deep cuts in lab test prices. However, unlike HMOs of that era, the CMS scheme to collect private payer lab t…
Is There a Future for Hospital Lab Outreach Programs?
CEO SUMMARY: This will be one of the most challenging years facing the clinical lab industry since the early 1990s. The CMS scheme to collect private payer lab test prices and use that data to set Medicare clinical laboratory test pric…
Boyce & Bynum Sells to Quest Diagnostics
CEO SUMMARY: With the year end approaching, lab buyers and sellers are working to finalize deals that may have been in discussion for months. The first big lab acquisition for this season came on Nov. 27, when Quest Diagnostics announced it was acquiring Boyce and Bynum Pathology Laborato…
Several Big Surprises in 2018’s Top 10 Lab Stories
CEO SUMMARY: This year’s list of the Top 10 Lab Industry Stories for 2018 is dominated by new directives from Medicare and private health insurers, as well as significant decisions by federal courts. Collectively, these developments create new compliance risks for all clinical laborator…
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The fragmentation of consumer markets is reflected in clinical lab services, and The Dark Report examines this trend and how it will impact labs in the coming years. Also, The Dark Report notes that the FDA has issued a controversial memo to reclassify many high-risk IVD assays.
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