More Reimbursement Threats for Lab Testing

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WE ARE NOW WELL INTO THE FIRST MONTH OF 2011 and already there are plenty of signs that reimbursement for both clinical laboratory testing and anatomic pathology testing will come under siege from a variety of sources this year.

Take, for example, the rather rapid action by the Centers for Medicare and Medicaid Services (CMS) to use the Final 2011 Medicare Physician Fee Schedule Update to issue a final rule that requires a physician signature on paper requisitions for clinical laboratory tests—and puts the laboratory at risk for payment denial if that paper requisition is not signed by the physician. As you will read on pages 3-4, this issue was hashed out back in 2000 as part of the consensus developed by CMS and the Negotiated Rulemaking Committee. Now Medicare bureaucrats are about to cause considerable turmoil once they require enforcement of this rule, with labs as likely financial losers.

Another interesting attack on laboratory reimbursement involves the efforts by a variety of healthcare bodies to address current coding and billing practices for many molecular and genetic tests. (Say “sayonara” to code stacking, for instance.) It is not likely that the resulting mix of reforms—including a list of new molecular test CPT codes—will result in laboratories continuing to file claims and be paid at current rates for many types of molecular tests. If anything, coding experts believe that the coming reforms will reduce the over-all payments made to laboratories for molecular and genetic testing.

In fact, as reported first on these pages over the past 18 months, private payers are already gearing up their own pre-authorization programs for expensive molecular and genetic tests. That will bite into the revenues of many pathology groups and regional laboratories if they fail to remain part of the provider networks for these different health plans.

Then comes the consequences of the 2010 health reform legislation. The first 1.75% annual cut in the Medicare Part B laboratory test fee schedule has already kicked in and the clock continues to tick on the January 1, 2013, implementation of the 2.3% federal tax on medical devices that labs will pay when they buy new equipment.

Finally, there are the uncertainties of how clinical labs and pathologists may be paid as health reform addresses services delivered by medical homes and accountable care organizations (ACO). Collectively, these trends indicate a tougher financial future for labs in 2011 and beyond.

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