American Association for Clinical Chemistry
Better health through laboratory medicine
August 2008 Clinical Laboratory News: Regulatory Profiles

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August 2008: Volume 34, Number 8

 Congress Overrides Veto, Repeals Competitive Bidding, Makes Medicare Bill Law

On July 15 the laboratory community achieved a major victory when members of Congress overrode a President Bush’s veto of HR 6331, the Medicare Improvements for Patients and Providers Act, effectively repealing the CMS’s authority to conduct a competitive bidding demonstration project for laboratory services.

The competitive bidding demonstration project sought to force laboratories to bid competitively against one another for Medicare contracts in an effort to lower Medicare costs. Opponents of competitive bidding, such as the AACC, had concerns it would stifle laboratory innovation, reduce investment in newer technologies, and force smaller laboratories out of business.

In December 2007, CMS invited 66 labs in the San Diego area to participate in a bidders conference and would announce participating labs in April. But in January three labs—Internist Laboratory, Sharp Healthcare, and Scripps Healthcare—filed suit in federal court to halt the project, saying it would have a negative impact on the integrated delivery of care. A federal judge at first dismissed the lawsuit and denied a temporary restraining order based on government arguments that any challenge to the project was premature because no winners or losers had been selected so none of the labs had suffered any harm. But the judge later granted an injunction that prevented CMS from announcing winners, otherwise implementing and carrying out the project in San Diego, and disclosing any information in the bid applications. The court found that the three labs had shown that the competitive bidding measure would cause irreparable harm, including substantial economic damage to the labs, and danger to patients.

The House of Representatives had overwhelmingly passed the bill in June and the Senate passed it in July. The bill, introduced by Rep. Peter Stark (D-Calif.), also replaces the pending 10.6% cut in physician payments with a 1.1% increase.

To view the bill, go to the Library of Congress Web site.

HHS Selects 12 Communities for EHR Demonstration

HHS Secretary Mike Leavitt named 12 communities that will participate in a 5-year, national Medicare demonstration project that provides incentive payments to physicians for using certified electronic health records in patient care.

The communities range from multi-county to state level and include Alabama; Delaware; Jacksonville, Fla.; Georgia; Maine, Louisiana; Maryland and Washington, DC; Oklahoma; Pittsburgh, Pa.; South Dakota; Virginia; and Madison, Wisc.

As many as 1,200 primary care physicians in the selected communities will receive financial incentives. They also may receive bonus payments based on results of a survey measuring the number of EHR functionalities a physician group has incorporated into its practice. According to the HHS, total payments under the demonstration for all 5 years may be up to $58,000 per physician or $290,000 per practice. Findings from the project will help determine the role of EHRs in delivering high-quality care and reducing medical errors. For more information go to the CMS Web site.

                                   NYC Launches Borough-wide HIV Testing

The New York City Department of Health has launched a project to have all residents of the Bronx between the ages of 18 and 64 learn their HIV status within the next 3 years. The initiative, called The Bronx Knows, is an effort that teams the health department with community-based organizations, hospitals, and community health clinics. Bronx residents can go to any one of 40 designated sites throughout the borough for reliable testing.

City officials say that cumbersome consent procedures required by state law have deterred doctors from offering the tests. Although officials estimate that close to 70% of Bronx adults have undergone testing for HIV at some point in their lives, about 250,000 have never been tested for the virus. According to the Health Department, Bronx residents account for nearly one-fourth of New York City’s HIV infections and one-third of AIDS deaths annually. Officials also said that the Bronx’s large number of AIDS deaths can be attributed to people not getting tested until it is too late to treat the virus effectively.