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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area managed by a specific regional Medicare Part B contractor, and Local Medical Review Policies (LMRP) were superseded by LCDs in 2003.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.
CMS Anti-Markup Rules Target In-Office Ancillaries
CEO SUMMARY: Medicare officials are again attempting to rein in what they consider to be potentially abusive forms of in-office ancillary services, including anatomic pathology. Proposed new rules published this month would clarify and perhaps expand the application of the Medicare anti-m…
Analyzing Lab Bid Demo To Predict Its Outcome
CEO SUMMARY: After two decades of study and preparation, the Centers for Medicare & Medicaid Services (CMS) is pushing the laboratory profession toward the first pilot site in the Congressionally-mandated Medicare Clinical Laboratory Services Competitive Demonstration Project. Designe…
Using a 1997 Bid Model In a 2007 Health Market
CEO SUMMARY: It’s been a long path from concept to implementation for a competitive bidding demonstration involving clinical lab services. It was in the mid-1980s when CMS commenced work on designing such a demonstration. In the 1990s, RTI International continued devel…
Call to Action Is Needed For Lab Test Profession
CEO SUMMARY: Is a laboratory test simply a commodity, like wheat or coal? Or is it a complex scientific service of unique value that delivers personalized results and clinical knowledge on behalf of millions of patients every day in the United States? The fundamental assumption of competi…
Speculating On How Labs Might Respond to Demo
CEO SUMMARY: Statements and actions by CMS officials responsible for the laboratory competitive bidding demonstration project reveal the likelihood that they are using it as a Trojan Horse. While talking about implementation of a three-year demonstration project in the San Diego MSA, CMS …
A Pricing Strategy Soon to Boomerang?
HAVE NATIONAL LAB COMPANIES CREATED A REIMBURSEMENT BOOMERANG that will erode financial stability for the entire laboratory industry in the United States? I ask that question because the Medicare Competitive Bidding Demonstration Project for Laboratory Services has selected San Diego to be its first …
San Diego MSA Selected For Medicare Lab Demo
CEO SUMMARY: Earlier this month, CMS revealed its selection of the first of two sites for the Medicare Competitive Bidding Demonstration Project for Laboratory Testing Services. It will be the San Diego-Carlsbad-San Marcos MSA (metropolitan statistical area). An assessment of this MSA rev…
Are Feds Ready to Strike at TC/PC Arrangements?
CEO SUMMARY: Pathologists and laboratory directors will want to pay attention to the proposed rules published by the Centers for Medicare and Medicaid Services on July 2, 2007. The document is a grab bag of proposals and rules that would significantly curb many common ancillary services a…
Picking Top Ten Stories Of 2005 for Lab Industry
CEO SUMMARY: THE DARK REPORT offers its pic…
Urology Revenue Loss Drives AP Lab Condos
CEO SUMMARY: Urologists are motivated to operate anatomic pathology laboratory condominiums as a way to replace lost income after Medicare imposed a major reimbursement cut for a key urology procedure. Capturing revenue from ancillary services is a hot topic within the urology profession….
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