Forecast: Tough Fee Cuts Are in Labs’ Future

EVERY CLINICAL LABORATORY AND ANATOMIC PATHOLOGY GROUP PRACTICE in the United States should prepare for some big-time financial belt-tightening during the next 36 months. That certainly is the message coming from intense budget battles unfolding in Washington, DC, this fall.

Most of you reading this probably know that the Medicare patient lab test co-pay/co-insurance proposal is back on the table. Whether it is the Congressional Super Committee looking to specify $1.2 trillion in reduced spending over 10 years or the Senate and House finance committees seeking sources of Medicare funding cutbacks just to get through the 2012 budget cycle, restoring the lab test co-pay requirement looks mighty attractive. That is particularly true when the co-pay is projected to generate up to $16 billion in savings over 10 years.

But that is not the only bad news. I doubt many of you know about the MedPAC proposal. It was issued last month and suggested that cutbacks in funding of Medicare lab testing could be used to provide the money needed to apply to physician fees, per the SGR (sustainable growth rate) formula. According to our Washington connections, MedPAC’s initial proposal targeted $22 billion in lab test funding cutbacks over 10 years!

You will read more details about these proposals on pages 3-6. THE DARK REPORT is the first lab industry news source to provide information about the entire range of unwelcome ideas circulating around Congress. I agree with our editor that, for 2012, the lab industry’s biggest strategic issue is how to ameliorate the impact of major budget cuts to Medicare and healthcare in general. Of course, clinical laboratories are not being singled out for such deep funding cuts. All classes of providers will be lobbying legislators until the 2012 budget process concludes.

If you agree with me that funding for lab testing is at high risk in coming months, then I recommend that you join us for a special audio conference on October 26 that will delve into the current legislative situation. We’ve arranged for Alan Mertz, President of the American Clinical Laboratory Association, and Peter Kazon, Senior Counsel in the Washington, DC, office of Alston & Bird to give you an insider’s perspective of the situation.

We think there is still time for a united lab testing industry to step forward and educate lawmakers about the value of clinical lab testing. Plan to join us for this important audio conference and get the knowledge you need to help steer your lab to financial stability in the coming years.