WE ARE NOW IN THE NEW YEAR and the 2018 Medicare Clinical Laboratory Fee Schedule (CLFS) is a reality. The dramatic price cuts that the federal Centers for Medicare and Medicaid Services has enacted is the single most disruptive financial event the clinical laboratory industry has faced in the past two decades.
As we have reported, these Medicare Part B price cuts will wreak financial havoc among community lab companies and hospital lab outreach programs. But even the two billion-dollar lab companies will feel a major sting from these fee cuts. Some analysts have pointed out that the two national lab companies will no longer be able to use their ample profits from Medicare fee-for-service payments to offset the costs of providing private health insurers with deeply-discounted managed care contract prices.
Now that the 2018 CLFS price cuts are a fact of life, it is imperative that every pathologist, hospital lab administrator, and lab executive understands the specific financial impact that reduced revenue from Medicare fee-for-service payments will have on their respective clinical lab organizations. To assist in that effort, this issue of THE DARK REPORT provides important details about current developments, including the lawsuit by the American Clinical Laboratory Association filed Dec. 11 against the federal Department of Health and Human Services.
Once again, we are first to bring you not just the news, but useful business intelligence about this lawsuit, what it hopes to accomplish, and the facts the plaintiff intends to present in support of its claims. You will also read the comments from three experienced lab industry attorneys. They were asked to comment on the strengths and weaknesses of ACLA’s case and to explain the primary legal strategies that ACLA is using to make its case.
Also of significance are the four declarations by experienced clinical laboratory leaders that were included in ACLA’s court papers. You’ll learn what the executive director of Joint Venture Hospital Laboratories said about the consequences of the 2018 CLFS price cuts on hospital labs. You’ll also learn what the CEO of Aculab, a lab company that serves 320 nursing homes, has to say about the negative financial impact this CLFS will have, not just on his lab, but all labs that serve nursing homes throughout the United States.