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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area managed by a specific regional Medicare Part B contractor, and Local Medical Review Policies (LMRP) were superseded by LCDs in 2003.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.
Medicare’s Latest Attack on Lab Test Prices
MANY OF YOU KNOW ABOUT THE PROPOSED NEW MEDICARE RULE by the Centers for Medicare & Medicaid Services (CMS) that it would use to initiate a review of the prices it pays for 1,250 clinical laboratory tests under the Medicare Part B Clinical Laboratory Fee Schedule (CLFS). However…
CMS Ready To Hack Away at Cost of Lab Testing
CEO SUMMARY: In July, the federal Centers for Medicare & Medicaid Services (CMS) published three proposed rules which would allow it to act independently of Congress to set prices for clinical laboratory testing and pathology services. Analyses of these proposed rules indicate that th…
Labs Push to Cut Costs As Budgets, Prices Shrink
CEO SUMMARY: Cost-cutting is now the prime directive at progressive labs because nearly every laboratory organization in the United States is under sustained financial pressure. This is due to shrinking budgets for hospital labs and more aggressive price-cutting by private payers. Even Ob…
Labs Face Consequences from MolDx Test ‘Mess’
CEO SUMMARY: Non-payment of molecular test claims for the first five months of 2013 is not the only financial disruption for labs that perform these tests. Reports are coming in about how Medicare contractors, Medicaid programs, and private payers are declining to pay claims based on ruli…
OIG Tells CMS It Could Save $910 Million on Lab Test Costs
IT IS ONE MORE POWERFUL SIGN of the changing times. Last week, the Office of the Inspector (OIG) publicly released a study it had done of the prices paid for lab testing and how the Medicare program could use this information to reduce the cost of Part B clinical laboratory testing. It was The W…
Aetna To Lower Lab Test Prices, New Fees Are Effective on July 1
IN RECENT MONTHS, labs are reporting the receipt of letters from Aetna, Inc., announcing that it will pay dramatically less than Medicare prices for many key lab tests. Aetna said that these lower prices will take effect on July 1, 2013. Three examples illustrate the deep fee cuts t…
Anticipating Washington’s Next Blows to Lab Testing
CEO SUMMARY: With the advent of 2013, almost every lab was responding to some type of price cut. Clinical labs are dealing with the sequential, multi-year cuts to the Medicare Part B Lab Test Price Schedule. Anatomic pathology labs are still adjusting to the expiration of the TC Grandfath…
Low 2013 Molecular Rates May Bankrupt Some Labs
CEO SUMMARY: Many of the recently issued reimbursement rates for molecular diagnostic tests are inadequate and in fact are lower than the cost of running the tests, lab experts say. Smaller laboratories that specialize in developing and selling molecular tests could be forced to close. As…
Delivering Added Value = More Lab Reimbursement
WILL HISTORY LOOK BACK ON 2013 AND DECLARE IT to have been a watershed year for the clinical laboratory testing industry? I ask that question because many of you are telling us here at THE DARK REPORT that you expect rapid and unprecedented changes in the lab testing marketplace in your community or …
2012’s Top Ten Lab Stories Predict More Challenges
CEO SUMMARY: It’s been a year with more lows than highs, when viewed through the lens of THE DARK REPORT’S “Top Ten Lab Stories of 2012.” The end of the TC grandfather clause, new policies for prostate biopsy billing, and a dramatic 52% cut to 88305- TC fees were widely reported. …
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Volume XXXII, No. 6 – April 21, 2025
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