TRENDS & PERSPECTIVES
In July, Congress dealt with the following legislative issues that could affect the IVD industry:
The House of Representatives and the Senate voted to override President Bush’s veto of the “Medicare Improvements for Patients and Providers Act of 2008” (HR 6331). This bill eliminates a planned 10.6% cut in physician payments and made a number of changes to the Medicare program.
One key provision of the measure was the repeal of CMS’ authority to conduct a competitive bidding demonstration project for laboratory services. Although only a demonstration, this program could have forced thousands of laboratories out of business.
But a negative aspect of the legislation is a 0.5% annual reduction in the laboratory consumer price index (CPI) during the next five years, which translates into a $500 million cut in laboratory payments. However, CMS announced that the CPI update for clinical laboratories in 2009 will be 5%, which means a 4.5% increase in lab payments next year, the largest update since 1990.
Representative Bart Stupak (D–MI) introduced the “Medicare Clinical Diagnostic Laboratory Fee Schedule Modernization Act of 2008” (HR 6761), which would create a negotiated rule making committee to redesign and modernize the laboratory payment system. This measure proposes the most comprehensive revision of laboratory reimbursement since the fee schedule was first established in 1984. The bill also proposes the following:
- Establishing a negotiated rule making committee to develop a revised national clinical diagnostic laboratory fee schedule.
- Requiring new payment rates to be based on the resources utilized in performing the test and the test’s potential cost-savings to the Medicare program.
- Making adjustments to the payment rate based on geography, site of testing, and the population served.
- Requiring CMS to evaluate the payment rates at least once every five years, if not earlier.
Representative Patrick Kennedy (D–RI) introduced the “Genomics and Personalized Medicine Act of 2008” (HR 6498), which seeks to expand and accelerate genomics research. This bill is similar to the legislation introduced last year by Senator Barack Obama (D-IL).
