FINAL THOUGHTS
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Stephen J. Ubl is president and chief executive officer at AdvaMed (Washington, DC). He is recognized as a top healthcare advocate and policy expert with considerable experience across
multiple health policy sectors. He can be reached at president@ advamed.org. |
All too often, when it comes to healthcare costs, policymakers in Washington are too focused on making short-term cost savings rather than providing long-term value to patients and the healthcare system as a whole. That can be seen once again this year in Medicare reimbursement policies for two types of critical diagnostic technologies: laboratory testing and medical imaging.
The Bush administration’s budget proposal for fiscal year 2008 includes a competitive bidding program for laboratory tests, which could drastically cut payments for such critical medical tests. Competitive bidding could reduce beneficiary access to tests and undermine incentives for developing the new generation of molecular diagnostic tests that will revolutionize the practice of medicine.
Fortunately, more-forward-thinking proposals are on the table to establish a payment system that recognizes the full value of lab testing. In early March, Congressmen Bobby Rush (D–IL), Michael Ferguson (R–NJ), Mike Thompson (D–IL), and Phil English (R–PA) introduced the Medicare Advanced Laboratory Diagnostics Act. The following are the particular provisions of the bill and the problems they target.
The current 23-year-old lab fee schedule provides little incentive for developing and adopting new molecular diagnostics tests. The legislation would establish a demonstration project to evaluate an entirely new payment system for molecular diagnostic tests, which are the future of the IVD industry. This system would be structured so that the payments more appropriately reflect the value of such technologies by creating a panel of experts who know and understand diagnostics to recommend payment rates.
Today’s payment levels bear little relationship to the value of diagnostic tests, and the system for determining new rates is confusing and not transparent. The legislation would require CMS to establish and publish the procedures and criteria it uses to set payment levels for tests.
One of the most serious problems with Medicare’s current system is that it operates in a black box, with virtually no input from stakeholders. The legislation would create more interactions among patients, physicians, laboratory groups, IVD manufacturers, and CMS at an annual public meeting on new test payments. It would also require CMS to give advance notice and allow public comment when a test is considered for inherent reasonableness adjustment.
Finally, despite all the problems with the current fee schedule, CMS has limited official authority to correct the gross payment errors that occur. The legislation would provide mechanisms for interested stakeholders to pursue a correction of many long-standing errors.
Connecting the Dots
AdvaMed is working on many fronts to support this legislation. The association is working with members of Congress and their staffs, medical specialty groups, patient organizations, and various laboratory and diagnostics groups to build support for this new bill. The association has also been in touch with officials at CMS and the Department of Health and Human Services. The hope is that this is the year when Medicare’s diagnostic payment system will finally be modernized.
However, there is similar shortsightedness in Washington toward another critical diagnostic technology, that is, medical imaging. Last year, Congress cut Medicare funds for medical imaging by $8 billion during the next 10 years.
Here again, AdvaMed will be making efforts to reverse those cuts and prevent future cuts. But much like the competitive-bidding proposal for lab tests, these imaging cuts clearly show that policymakers either cannot or will not see the link between diagnosis on the one hand, and healthcare quality improvement and cost savings on the other. This is especially discouraging as genomics-based diagnostics and molecular imaging are increasingly teaming up to open the vast potential of personalized medicine, including its potential to prevent disease and dramatically save costs.
As AdvaMed pushes to modernize payment for lab testing and prevent massive cuts in medical imaging, a primary goal is to help policymakers in Washington and elsewhere finally connect the dots between diagnostic technologies and the tremendous savings in costs and lives they create.
