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 competitive bidding for clinical laboratory testing is that one lab’s test result is equal to another. It is time for the laboratory medicine profession to come together and tell its story to the public and elected officials.
IS IT NECESSARY FOR MEDICARE OFFICIALS to disrupt a smooth-running system of laboratory testing services in the San Diego-Carlsbad-San Marcos MSA (metropolitan statistical area) before learning the lesson that every pathologist, Ph.D., and medical technologist knows, that laboratory testing is a complex science and not a commodity product, to be treated like corn, soybeans, and iron ore?
Competitive bidding for laboratory testing is based on a basic premise: the test result from one lab is fully substitutable for the test result from another lab. Thus, Medicare, as a buyer, can get the lowest price—at comparable quality—by competitive bidding.
But there are greater stakes on the table than simply a competitive bidding demonstration pilot in the San Diego MSA. At the December 5 bidders’ conference, toward the end of the day, officials from the Centers for Medicare & Medicaid Services (CMS) stated that the bids submitted on February 15 will function as a prototype to allow them to develop a new Part B laboratory services fee schedule for Congress.
This is major news for the laboratory industry and has gone unreported nationally until now. It exponentially magnifies the negative effects that are likely to result from the poorly-designed, overly-complex, and subjective San Diego MSA competitive bidding project.
Basis For National Lab Fees
It means that, even before the end of the three-year demonstration project, CMS intends to build a new national fee schedule for laboratory services using the bids submitted in what is recognized by the laboratory profession to be a poorly designed and flawed pilot demonstration project. Therefore, with the February 15 deadline looming for the acceptance of bids for the first pilot of the Medicare Clinical Laboratory Services Competitive Demonstration Project, the laboratory medicine profession in the United States has come to a crossroads.
It would be timely for the laboratory medicine profession to come together to achieve multiple goals. Some obvious objectives would be: 1) to delay the February 15 bid submissions, especially since CMS has now publicly acknowledged it wants to use these bids to craft a new national fee schedule; 2) to cause a delay in the implementation of the San Diego MSA, specifically to allow the voices of patients, providers, and laboratory professionals to play a role in revising and reforming the form and shape of the competitive bidding demonstration to correct its flaws; 3) to effect a public education campaign that reaches the American public, particularly Medicare beneficiaries in the San Diego MSA. This campaign should also reach out to local and national media, as well as elected officials.
The best tool to achieve these goals is the truth. Accurate information, widely disseminated, has the power to energize natural allies in this effort to reform the competitive bidding project and fix the problems. I would like to respectfully submit several suggested “calls to action” which a unified laboratory profession could use to achieve these objectives.
Call to Action:
White Paper/Position Paper on Lab Bidding Demonstration
Having cooperated fully with CMS/RTI as requested for three years—and having been ignored in virtually every aspect of the bidding design, bidding evaluation process, and implementation plan, it is morally right for the laboratory medicine profession to speak out…to go on record with a detailed position paper that identifies the gaps in healthcare care, patient services, and continuity of access that will occur for three years in the San Diego MSA.
To have maximum effect and credibility, this position paper must be produced and endorsed by a coalition of laboratory medicine professional groups that cross all specialty medical boundaries. The existing Clinical Laboratory Coalition makes a good critical mass for organizing this effort, and every laboratory medicine trade association, professional society, and lab
vendor group should want to lend their name and endorsements to this effort.
The immediate goal is to produce a “White Paper” or position paper that is comprehensive and detailed. The White Paper must analyze and comment on all aspects of the Medicare Clinical Laboratory Services Competitive Demonstration Project. It must be blunt in its treatment of the proposed requirements, providing a detailed assessment of the flaws and oversights in the plan described by CMS/RTI.
Impact On Medicare Elderly
Further, this White Paper should provide a detailed discussion of how the demonstration project will affect these stakeholders: Medicare beneficiaries with a residence in a San Diego MSA zip code; physicians and other providers who treat Medicare patients in that area; and the impact of the bidding scheme on all classes of laboratories that provide lab testing and diagnostic consulting services.
Finally, the impact of this White Paper would be intensified if the laboratory medicine profession engaged an internationally respected business resource to study the announced plan for the competitive bidding demonstration project for the purpose of providing a detailed critique of the plan, along with recommendations for fixing its flaws and failings. Of course this takes money and time, but it brings immense credibility to the findings.
Call to Action:
Public Education Effort, Involving Media, Patient Advocacy Groups, Disease Associations, Physician Groups
As this White Paper is ready for public release and distribution, the laboratory medicine alliance/coalition would benefit immensely from a major public education campaign. This campaign should target the media at the local, state, and national level. It should reach out to patient advocacy groups and disease associations. It should also include communication with physician specialty associations, telling the laboratory medicine side of the story and asking for support and recognition by other medical specialty associations and societies.
Included in the White Paper/position paper document should be individual case studies of how laboratory medicine makes a difference, because of the diagnostic knowledge and expertise that helps physicians know the right test to order, and then the right thing to do with the lab tests results. Humanize how the power of laboratory medicine makes an incredible difference in the lives of patients every day.
Of course, the persuasive clinical value and economic leverage of lab medicine services needs to be outlined. The White Paper/position paper is the place to make both the financial case and the clinical case that laboratory medicine is a high quality clinical service, as well as one of the most cost-effective medical specialties in healthcare. It should not be treated as a commodity.
Call to Action:
Educating Elected Officials
These educational materials can be delivered to elected officials and combined with personal meetings by lab medicine professionals to tell the full story. Officials and their staff advisors at city, county, state, and federal levels should be briefed. Such meetings with elected officials can be arranged to include patients, patient advocacy groups, and those disease associations that want to support a reform and revision to the current laboratory competitive bidding demonstration project.
Call to Action:
Funding this Effort and Implementing the Campaign
Because of the looming February 15 date, there is a need for swift action. The laboratory medicine profession will require three resources to accomplish these calls to action: leadership, funding, and manpower.
Across the lab industry, there are plenty of leaders, but they need to come together and unite behind a single goal: reforming the competitive bidding demonstration project so that it can proceed without disrupting access to quality laboratory testing by Medicare beneficiaries, and their physicians, and without triggering erosion of laboratory services in the San Diego MSA.
It will take money to create and implement a public education campaign. Fastest sources of funding are likely to be industry vendors, such as the in vitro diagnostics (IVD) companies, certain lab industry associations, and the personal contributions of pathologists, lab executives, and others involved in laboratory medicine.
With leadership and funding in place, people are needed with the demonstrated skills and time to implement the public education campaign, to organize meetings with patient groups and elected officials, and contact local and national media. The public education campaign should have adequate funding to support these people in their work on behalf of the laboratory profession.
Positive Reforms As A Goal
Most of the diverse interests in the laboratory medicine profession converge on the goal of positive reforms to the national Medicare Part B laboratory fee schedule. For that reason, assembling an ample war chest to fund a White Paper/position paper, in tandem with a professionally-executed campaign of public education, can be the type of “out of the box” thinking needed to get the right action on this important subject.
These suggestions are respectfully submitted as a starting point to craft an effective response to the new implications of the Medicare Laboratory Competitive Bidding Demonstration Project soon to unfold in the San Diego MSA.