The hits to the clinical laboratory industry just keep coming. President Obama’s proposed budget for 2015, sent to Congress March 4, includes Medicare cuts of $7.9 billion for lab services over 10 years. The proposal quickly drew fire from lab groups, which blasted what would amount to an overall 14 percent funding reduction. Medicare payment for clinical laboratory services has been reduced substantially in recent years as a result of the Affordable Care Act, a short-term patch to the Medicare sustainable growth rate formula, and sequestration. Now, the president’s budget proposes to extend the annual 1.75 percent cut to the Clinical Laboratory Fee Schedule (CLFS), which had been scheduled to end in 2015, until 2023. According to the American Clinical Laboratory Association, the proposed budget includes reduction on top of cuts already scheduled under current law and disregards that the Centers for Medicare and Medicaid Services (CMS) is already moving forward to update all rates within the CLFS to reflect “technological changes.” The administration made a similar proposal last year in the proposed budget for 2014. Republicans on Capitol Hill said the proposed budget was dead on arrival, but lawmakers also are looking for ways to reduce Medicare spending, and […]
The hits to the clinical laboratory industry just keep coming. President Obama’s proposed budget for 2015, sent to Congress March 4, includes Medicare cuts of $7.9 billion for lab services over 10 years. The proposal quickly drew fire from lab groups, which blasted what would amount to an overall 14 percent funding reduction.
Medicare payment for clinical laboratory services has been reduced substantially in recent years as a result of the Affordable Care Act, a short-term patch to the Medicare sustainable growth rate formula, and sequestration. Now, the president’s budget proposes to extend the annual 1.75 percent cut to the Clinical Laboratory Fee Schedule (CLFS), which had been scheduled to end in 2015, until 2023.
According to the American Clinical Laboratory Association, the proposed budget includes reduction on top of cuts already scheduled under current law and disregards that the Centers for Medicare and Medicaid Services (CMS) is already moving forward to update all rates within the CLFS to reflect “technological changes.”
The administration made a similar proposal last year in the proposed budget for 2014. Republicans on Capitol Hill said the proposed budget was dead on arrival, but lawmakers also are looking for ways to reduce Medicare spending, and labs continue to be a favorite target.
Altogether, the proposed budget would provide nearly $1 trillion for federal health programs administered by the Department of Health and Human Services, including some $77.1 billion in discretionary spending authority for the department, a reduction of $1.3 billion from fiscal 2014.
“Cuts to Medicare laboratory payment rates do nothing to modernize payments,” says Mark Birenbaum Ph.D., administrator of the National Independent Laboratory Association (NILA). “They only succeed in eliminating market competition and the ability to ensure seniors have access to laboratory services. Community laboratories that provide test results that doctors rely on every day to make appropriate diagnoses and treatment decisions do not survive in the face of double-digit payment cuts.”
In the 2014 Physician Fee Schedule final rule, CMS states that it will review laboratory test payment rates and make adjustments as soon as 2015. Though this process will begin in 2014, CMS has yet to outline how it will conduct such an analysis, how it will attribute its analysis to payment adjustments, and how deep those reductions will be.
“If Congress and the administration want to improve patient health outcomes and reduce health care expenditures, laboratories must be considered a key partner in meeting those goals, not a repeated target for cuts,” says Birenbaum. “NILA has been working with Congress to truly modernize how Medicare pays for clinical laboratory services. We ask that Congress and the administration work with us, not against us, and initiate reforms that do not compromise the quality and availability of laboratory services that Medicare beneficiaries and their physicians need to support their health and well-being.”
Takeaway: The Obama administration once again is trying to cut Medicare payment for laboratory testing as a way to save money even though reimbursement has already been reduced substantially over the last three years.
