Competitive Bidding: An Update

Extract

Competitive bidding for Medicare Part B clinical laboratory services - it's been the most powerful unifier of the clinical laboratory industry due to the propensity to dilute the quality of laboratory services, impede access for beneficiaries, and remove any future laboratory competition within the demonstration sites. The first phase of the demonstration, called for in the Medicare Prescription Drug Improvement and Modernization Act of 2003, was to begin April 1, 2007. At this writing in February, the final plan is still pending approval of the Office of Management and Budget (OMB). No announcement has been made regarding the site location, the demonstration design, the application form, or other final plans. While ASCLS concurs that the current clinical laboratory fee schedule is outdated and needs revision, competitive bidding is not the most effective way to accomplish that goal.

Let's look at how CMS proposes the demonstration occur and at actions ASCLS and other laboratory groups are taking in opposition to the proposal. The demonstration will exclude hospital inpatient and outpatient testing and physician office testing, except when the facility acts as a reference laboratory and performs testing on patients from other facilities. Each laboratory performing $100,000 of testing annually on beneficiaries residing in the bidding area will be required to submit a bid for each of over 1000 CPT codes reimbursed by the fee schedule. Laboratories must bid on all CPT codes but can form consortia with other laboratories. While multiple winners will be awarded, losing laboratories will not be able…