Proposed Federal Budget Threatens Laboratories

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BY NOW MOST OF YOU KNOW THAT PRESIDENT CLINTON’S FY01 BUDGET is not kind to the clinical laboratory industry. It seeks to restore the 20% copayment for lab services, cuts 30% out of the reimbursement for four tests, and institutes the Medicare competitive bidding concept for lab services.

Over the last 15 years, the track record of lab and pathology professional associations has been poor at lobbying Congress for reasonable changes in year-to-year reimbursement arrangements. Every year or two, Congress succeeded in taking another significant chunk out of the calculations used to establish Medicare laboratory fees.

This 15-year track record would indicate a similar outcome for this budget cycle, assuming that nothing else changes. After all, the same leadership at the same professional associations will be responding to President Clinton’s newest budget proposals.

How can the lab industry change its “defeatist” pattern of the last 15 years? Our editor, Robert Michel, believes that only a lobbying effort led by independent commercial laboratory owners will be effective. The two blood brothers maintain their own lobbying effort and support their “own”? trade association. Pathologists tend to look to the AMA and their professional associations. Hospital laboratorians aren’t directly connected to the lobbying process. That leaves independent commercial lab owners.

Michel notes that individual effort, properly directed, can generate substantial change. For example, Medicare’s recent increase to Pap smear reimbursement is a directly linked to the efforts of a Hawaiian pathologist and his local Congressman. In New York State, independent laboratories banded together and achieved a repeal of the notorious 8.18% laboratory test surcharge tax (even if it did take 36 months to accomplish).

Against this historical background of ineffective lobbying, I suggest that clients of THE DARK REPORT form a grass roots, ad hoc effort to lobby Congress in a different, and more effective way. I know a number of our clients have already volunteered to fund a war chest for such a non- bureaucratic, action-oriented campaign. Any laboratory executives willing to participate and support such an effort should contact Robert Michel (503-699-0616 or With the upcoming Executive War College only 14 weeks away, it will provide a good opportunity for interested executives to gather and start this process.


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