Anticipate Access/Service Decline for S.D. Patients

Three levels of access to lab testing services not addressed in design of the lab bidding demo

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CEO SUMMARY: In its primary push to use the Medicare Laboratory Competitive Bidding Demonstration Project as a tool to drive down the price Medicare pays for Part B laboratory testing services, CMS is giving secondary attention to patients’ needs. In particular, CMS seems to place little value on the multi-year relationship and loyalty many elderly patients have with their existing laboratories, nor on the professional relationship the patients’ doctors have with their laboratory providers.

THERE WILL BE SERVICE DISRUPTIONS and ample confusion for significant numbers of fee-for-service Medicare patients in the San Diego-Carlsbad-San Marcos MSA (metropolitan statistical area) when CMS implements the Medicare Clinical Laboratory Services Competitive Demonstration Project on or after July 1 next year.

Collectively, Medicare beneficiaries are intense users of healthcare, particularly of laboratory testing. For example, it has long been accepted that a “commercial population” of patients under Medicare age will use laboratory tests at the average rate of almost three tests per year per person. A population of Medicare beneficiaries uses tests almost three times as often, at an average of about nine tests per year per person.

High Test Utilization

The San Diego-Carlsbad-San Marcos MSA (metropolitan statistical area) has a Medicare fee-for-service (FFS) population of 209,242 people. The federal Centers for Medicare & Medicaid Services (CMS) released a 2006 lab test utilization figure for the 303 tests in the bid requirements that totals 1,724,727 for this population. This works out to be approximately 8.2 lab tests per Medicare FFS patient per year in the San Diego MSA.

This remarkable statistic should not go unnoticed by health policy makers and elected officials responsible for the Medicare program. Of all the healthcare services that Medicare beneficiaries get each year, laboratory testing is one that is used intensively—for all the right reasons. These facts should also cause CMS to proceed with caution. Given that such a large proportion of the Medicare population uses laboratory testing every year, policy makers should be wary about disrupting elderly patients’ access to lab tests and what is acknowledged to be a smooth- running delivery of laboratory services in the San Diego MSA.

Further, it should be noted that, even though Medicare beneficiaries are intensive users of laboratory testing services, laboratory testing is one of Medicare’s best bargains and provides cost-effective clinical leverage to physicians. Typically laboratory testing services are about 3% of the total Part B spending, but are used by physicians in between 60% and 70% of their diagnoses and decisions on how to treat patients!

These dramatic facts illustrate why access to laboratory testing for Medicare patients is vital to maintaining their health and advancing treatment for those individuals with multiple maladies. As laboratories well understand, “access” works at three levels. In the San Diego bidding demonstration, there is the potential that this access will be disrupted and denied in significant ways.

Full Service and STATs 24/7

One level of access is the ability of the Medicare patient, and his/her physician, to work with a laboratory that offers a full menu of lab tests and is capable of performing STAT testing when needed. That means during health emergencies, the laboratory has a service network to receive a STAT specimen, perform the test, and deliver the results to the patient’s physician in as little as an hour.
In the San Diego demonstration project, the bidding requirements make it likely that some existing local and neighborhood laboratories, including community hospital labs that provide testing services to doctors’ offices across the street from the hospital, will be excluded from providing for Medicare beneficiaries.

Personal Relationship Between
Doctor & Lab For Consultations

The second level of access to laboratory testing for the Medicare patient involves his/her physician or caregiver. Does the clinician have a relationship with the laboratory and the ability to quickly reach the pathologist, Ph.D., or laboratory scientist who supervised the testing and reviewed the patient’s results? The professional consultation between the patient’s physician and the pathologist or other laboratory scientist is an integral part of the lab testing process. Often, when the attending physician has the pathologist or other lab professional review the lab results of the most recent test in the context of the patient’s earlier test results and medical history, the pathologist can guide the clinician toward a diagnosis and clinical action that was not immediately obvious to the attending physician.

This element of laboratory medicine often goes unnoticed. Yet, it is why a large number of physicians prefer to work with their local laboratories or their hospital’s laboratory outreach programs and reject using out-of-town labs.

These physicians recognize that having a personal relationship with local pathologists and laboratory scientists contributes to continuity of care. This relationship often makes a vital difference when a single lab test result is ambiguous to the physician, leading to a professional consultation with the pathologist to review the patient’s history and cumulative record of lab test results.

Ignore Clinical Relationships

It is disturbing that CMS/RTI has made little or no allowance for this ongoing clinical consultation that occurs between the referring physician and his neighborhood pathologist or laboratory scientist in its design of the San Diego bidding demonstration project. Further, such consultations are frequently the case when the community hospital laboratory provides lab testing services to the physicians in medical offices across the street from the hospital. In these cases, the Medicare patient’s inpatient, outpatient, and outreach testing lab results exist in a single record, giving the doctor immediate access to the patient’s complete and comprehensive lab test history—often extending back many years.

Further, as the physician makes daily rounds of his Medicare patients in the hospital, he/she often sees the pathologist, even casually in the cafeteria or walking in the halls. During these moments, doctor and pathologist discuss cases. Often, the pathologist is very familiar with the Medicare patient because he/she has been evaluating biopsies and participating in tumor board sessions involving the patient’s case, for example.

Because the bidding demonstration requirements are written in a restrictive way that favors large national laboratories over local labs and community hospital labs, physicians treating Medicare patients in the San Diego MSA are at risk of losing access to these reliable community resources and clinical assets.

Geographical, Physical, Personal 

The third level of access to laboratory testing services is geographical, physical, and personal. Does the patient’s choice of laboratory have a patient service center (PSC) or specimen collection center close to where the Medicare beneficiary lives or spends time? Does the PSC offer easy access for a Senior Citizen with limited
mobility? For example, the PSC may be in the same office building as the patient’s
physician, or a short walk from a parking lot without stairs to negotiate.

Finally, there is access in the personal sense. A Medicare patient may have been visiting the same laboratory PSC for years, even decades. Many Medicare patients are tested with such regularity that they become good friends with the phlebotomists and other staff at the PSC. In some cases, their laboratory of choice has a skilled phlebotomist who can perform the venipuncture in a most comfortable way or successfully perform difficult blood draws. In these cases, a Medicare patient will be highly loyal to these specific laboratory professionals because their skills—and their friendship—make the difficult, painful process of venipuncture easier to bear.

Discomfited Medicare beneficiaries in the San Diego MSA can become a noisy constituency for elected officials. Some rough calculations demonstrate the scale of the turmoil and disruption that could potentially happen in the lives of these elderly patients.

First, assume that the two national laboratories already hold about 80% of the Part B fee for the testing market in the San Diego MSA. That means they currently serve approximately 167,000 of the 209,000 Medicare FFS beneficiaries.

If the bidding procedure ends up excluding the local lab in Oceanside (Internist Laboratory, see pages 12-15) and most of the hospital laboratories currently serving Medicare FFS beneficiaries in the San Diego MSA, this means as many as 41,800 elderly patients could be forced to begin using other laboratories.
As a result, each week after the July 1 implementation takes place, physicians may have to tell an estimated 1,000 to 2,000 Medicare beneficiaries that they must use a different laboratory. This starts a process that requires the patients, and their loved ones or caregivers, to find the new laboratory specimen collection sites and to have strangers draw their blood or collect their specimens.

Lots of Disruption Ahead

With as many as 41,000 elderly patients being directed away from long-standing laboratory relationships in the San Diego MSA demonstration project, and with their attending physicians forced to break the same long-standing laboratory relationship, there will be lots of disruption. More important, the laboratory medicine profession recognizes the potential for patient harm every time existing and satisfactory laboratory relationships are disturbed because of laboratory acquisitions, mergers, or consolidation. Thus, the possibility of direct patient harm is a real threat.


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