Congress Raises Stakes in Lab Test Pricing Game

EACH OF YOU READERS KNOW that there is always a story behind the story. This is particularly true in Congress and the federal government, where lobbying and influence can often have their own role in shaping how laws and regulations are written.

Keep that in mind as you learn more about the new law passed by Congress and signed by President Obama last week. Yes, it was a bill to patch the Sustainable Growth Rate formula. But the bill had almost 200 pages of other items that, among other things, mandate major changes in how the Medicare program is to use market-based data to set prices for the Medicare Part B Clinical Laboratory Fee Schedule.

Following passage of the legislation, there have been mixed reviews by different lab industry organizations and associations. Since the language in the bill will affect every laboratory that bills for lab tests under Medicare Part B, there will be some lab winners and some lab losers. Figuring out in advance which lab will be in which category is the challenge.

Since this new law will end up favoring some types of lab organizations over other types of laboratories, it is useful to ask who influenced the thinking of the people who wrote the language in this new federal law. This is not to imply that something nefarious took place. Rather, it is to raise the issue of how key officials within the Senate and House got input from various lab industry groups and whether the specific requirements in this bill will end up giving competitive advantage to one specific group of labs over another.

Please indulge me for considering this aspect of what is probably the single most important piece of federal legislation affecting the lab industry to emerge since passage of the CLIA update bill in 1988. After all, the scope of this federal law establishes a different methodology for pricing all Medicare Part B lab tests, while, at the same time, creating a new set of requirements for how CMS and the MACs are to handle a new lab test when establishing coverage guidelines and determining the price at which that new test will be reimbursed.

This old curmudgeon knows that, anytime you mess with someone’s money, there can be much unhappiness. The bill passed by Congress essentially messes with the money paid to every lab which provides lab tests to the Medicare Part B program. Therefore, much dissatisfaction will soon become obvious.


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