1. Laboratory Survival in the New World of Laws, Regulations and Court Decisions
Alan Mertz
President
American Clinical Laboratory Association
CCLA Annual Meeting, November 4, 2011

2. ACLA Advocacy Agenda, Fall 2011
Deficit “Super Committee” / cost-sharing and reimbursement cuts
MedPAC also recommending fee cuts
Physician fee schedule / fix the “SGR”
New molecular coding issues
Regulation of LDTs
FDA
“Modernizing Laboratory Test Standards for Patients Act” (HR 3207)
In-house pathology / “IOAS”
Proposed Rule on access to lab test results

3. “It doesn’t matter if it’s bad policy, we just need the money.”
Political Environment
“It doesn’t matter if it’s bad policy, we just need the money.”
It’s a new era of cost-cutting in Washington
Most intense pressure ever for cutting government spending
Result of:
Unprecedented national debt and annual deficits
Recession, joblessness
Political upheaval in House and Senate
Presidency “up for grabs”
All Medicare providers are facing more cuts!

4. Congressional “Super Committee”
Emergence of Super Committee
Composition, Process & Deadlines
Process Presents Serious Threat to Lab Reimbursement
“Sequestration”

5. Prospects for a Deal

6. It’s like the movie “Groundhog Day.”
Lab-Cost Sharing
It’s like the movie “Groundhog Day.”
Leading proposal is 20% coinsurance for lab services
Proposal is unworkable for several reasons
Labs are the only provider without a routine face-to-face encounter with the patient
Large volume of relatively small claims
Collection costs will often exceed coinsurance amount

7. Cost of Collecting Coinsurance Would Often Exceed the Amount Owed

8. Processing / Collection Costs per Laboratory Claim,
by Site of Service and Type of Claim (Paper vs. Electronic)
Christopher Hogan, PhD, Direct Research LLC. Analysis of 2009 Medicare Clinical Laboratory Claims, September 1, 2011.

9. Clinical Labs Received Zero or Negative Updates to Fee Schedule Rates in 14 of the Last 22 Years
Positive Updates
Zero or Negative
Updates
$--
$--

10. Cumulative Effect of Current Law Over Next 5 Years: A Payment Cut of 11.3%
$10 + CPI-U
Difference of ($1.13) in 2015:
-11.3%
Medicare Payment for a
Typical Clinical Lab Test
$10 + (Clinical Lab Fee Schedule Update)

11. Other Federal Issues Physician fee schedule / fix the “SGR”
New molecular coding issues
Regulation of LDTs
FDA
“Modernizing Laboratory Test Standards for Patients Act” (HR 3207)
In-house pathology / “IOAS”
Proposed Rule on access to lab test results

12. Advocacy in Action
Inside-the-Beltway Ads
Value of Innovation Campaign

13. How You Can Help

14. Questions or More Information?
Thank You!