Medicare’s Lab Competitive Bidding Demonstration

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EVERYONE SHOULD MARK JANUARY 1, 2007 ON THEIR CALENDARS. On that date, just 14 weeks from now, Medicare administrators intend to announce which laboratory bidders will be allowed to provide lab testing services in the laboratory competitive bidding demonstration that was mandated by the 2003 Medicare bill.

Never mind that officials at the Centers for Medicare and Medicaid Services (CMS) have yet to identify which region of the country will be involved in this demonstration project. Nor have they released information on how laboratories must respond, how “winning” bids will be selected, how laboratories exempted in the 2003 law will participate, and what type of appeals procedure will be available to non-winning laboratories that currently provide testing services in the region selected for the demonstration project.

Against this information vacuum, it seems that the next 14 weeks will be awfully busy—not just for some folks at CMS tasked with implementing the laboratory competitive bidding demonstration project, but also for the laboratories that find it is their service area which will be the demonstration site.

Oh, and there is something else you should know. Despite all the CMS fanfare and hoopla in the past couple of years that a panel of laboratory industry professionals will be meeting regularly to provide advice and input to CMS and its contractor on the best way to design and manage this demonstration project, not much has happened on that front. There’s been no recent meetings of the lab advisory panel and, by all appearances, CMS and its contractors will go blithely down their own path in designing and implementing the Medicare laboratory competitive bidding demonstration.

Long-time clients and regular readers of THE DARK REPORT probably know how I feel about this situation. When it comes to laboratory contracting, federal and state healthcare administrators have an abysmal record. In fact, these pages have chronicled many of their lab contracting foibles in recent years. So I am not optimistic that the final design and execution of this laboratory competitive bidding demonstration will prove satisfactory to any stakeholder—and that certainly is likely to include the Medicare patients in whatever region is selected for the demonstration.

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