The Honorable Joseph Bruno
Senate Majority Leader
New York State Senate
Legislative Office Building
Albany, New York 12247
Dear Senator Bruno:
We, the undersigned groups, representing 158,000 laboratorians nationwide (nearly 12,000 of whom reside in New York), urge you to support A.8007, which passed the Assembly on August 2, 1997, by a vote of 142-2. This legislation, if enacted, would repeal the 8.18 percent surcharge on clinical laboratory services. We believe this bill more equitably distributes the burdens of paying for indigent care—both for patients, as well as laboratories.
The 1996 Health Care Reform Act instituted an 8.18 percent tax on all services from health care providers, to fund indigent care. One of the unintended consequences of this law is that patients lacking insurance or with high-deductibles are being forced to pay the tax—since insurers are not responsible for paying the tax in those instances—or forgo laboratory services. A.8007 will rectify this situation by eliminating the surcharge on clinical laboratory services and replacing it with a higher covered lives assessment paid by insurers.
The indigent care surcharge also places a financial and administrative burden on clinical laboratories. In addition to collecting and processing the new tax, laboratories are required to pay the surcharge to the state even if the patient or provider fails to pay for the services. This places an additional financial burden on hospital and independent clinical laboratories at a time when profit margins are shrinking due to lower Medicare and Medicaid reimbursement, managed care and federal and state regulation. And, the surcharge places hospital and independent laboratories at a competitive disadvantage with other testing facilities, such as physician office laboratories and HMO-owned laboratories, which are exempt from the surcharge.
We appreciate your leadership and active interest in resolving this situation. We urge you to schedule A.8007 for a Senate vote during the fall session and to encourage your colleagues to support this measure. If any of our groups, or our New York State members can be of any assistance to you on this matter, please do not hesitate to ask us.
Thank you for your consideration of our request.
- American Association for Clinical Chemistry
- American Medical Technologists
- American Society for Microbiology
- American Society of Clinical Pathologists