Trends in Healthcare Payment

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ASCLS and other laboratory groups are alert to trends in Medicare payment, often the largest source of payment for a laboratory or a hospital. Developments in Medicare payment policy, such as competitive bidding, freezes to the Medicare Outpatient Laboratory fee schedule, threats of instituting a co-pay for Medicare beneficiaries, and others, have been the focus of advocacy efforts at the Legislative Symposium and in other campaigns.

Legislators, businesses, and the public remain concerned about the rising cost of healthcare and the growing number of uninsured citizens in the United States. Many proposals have been made to control the rate of increase in healthcare costs. Laboratorians often feel that the laboratory is unfairly singled out for more than a fair or proportionate share of freezes or cuts in reimbursement.

Concern from Congress about Medicare spending on Part B (outpatient) laboratory services stems from a significant increase in total dollars spent for laboratory services, despite the fact that the individual fees for tests have been frozen in 11 of the last 15 years. In the years 1991 and 1998, Medicare spending for laboratory services was $3.6 billion. There was a slight increase to $4.3 billion in 1993 and 1994, then a gradual decrease back to $3.6 billion in 1998. Since 1998, however, there has been an increasingly steep rise in total spending for laboratory services, averaging 8.8% annually, to $6.0 billion in 2004, the latest year for which data is available. (Data from the 2005 Medicare Trustees Report) Despite this growth, laboratory…