American Association for Clinical Chemistry
Better health through laboratory medicine
November 2009 Clinical Laboratory News: Regulatory Profiles

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November 2009: Volume 35, Number 11

Senate Scraps Co-Pay but Cuts Payment

In the rapidly changing work on healthcare reform legislation, labs have now survived two major skirmishes. The latest version of the reform legislation from the Senate Finance Committee, chaired by Sen. Baucus (D-Mont.), no longer includes a lab co-pay or levies a $750 million “performance” tax on labs.

The American Clinical Laboratory Association (ACLA), the Advanced Medical Technology Association (AdvaMed), and other lab groups argued that the lab tax was unfair, due to the fact that Medicare spending for laboratory tests has not kept pace with inflation. Payment for lab services has been reduced by about 40% in real, inflation-adjusted terms between 1984 and 2004. In fact, since 2000, labs have received the smallest cumulative update of any provider in Part B of Medicare, only 5.6% compared to 12% for physicians and 34% for hospitals.

Unfortunately, the current reform legislation is likely more bad news for payment policy. The current bill includes a measure that would mean a 5-year reduction of 1.75% from 2011 through 2015. The measure would also change the way that the Medicare lab fee schedule is updated to reflect inflation. The current formula subtracts 0.5% from the Consumer Price Index. The new formula would replace this 0.5% with a variable “productivity adjustment” that could mean a lower update, though it would not be allowed to reduce the update below zero.

Manufacturers also have reason to worry. The legislation still carries a $40 billion tax applied to medical device manufacturers based on market share. ACLA and AdvaMed released a report that concluded that the tax rate on the medical device industry would rise from 23% to nearly 50%. More information about lab groups’ lobbying during debate of healthcare reform legislation is available from ACLA online.

States Worry Over Medicaid after Stimulus Runs Out

According to a new report from the Government Accountability Office (GAO), states are anxious about what will happen when money from the stimulus package runs out and they're forced to face recession-driven increases in enrollment without the boost of federal funds. States have already received about $48 billion of the $90 billion set aside in the American Recovery and Reinvestment Act for Medicaid, called FMAP funding. States told GAO that they have been using the money to keep their Medicaid programs afloat and free up other funds during budget crises, according to the report. “The increased FMAP continues to help states finance their growing Medicaid programs, but state and District officials expressed concern about the longer term sustainability of their Medicaid programs after the increased FMAP funds are no longer available, beginning in January 2011,” according to the report. The GAO report is available online.

CMS Examines Paying for HIV Screening

The Centers for Medicare and Medicaid Services (CMS) announced a new proposal that would cover HIV screening for Medicare and Medicaid beneficiaries who are at increased risk, including women who are pregnant and Medicare beneficiaries of any age who request the service.

The announcement noted that while younger age groups account for most cases of HIV infection in the U.S., the Centers for Disease Control and Prevention (CDC) estimates that in 2006, about 19% of all U.S. residents with AIDS were age 50 or older when the disease was diagnosed.

The proposal marks the first time that Medicare has proposed to expand its list of covered preventive services under a new authority established by Congress. The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) gave CMS the ability to consider whether Medicare should cover “additional preventive services” if certain requirements are met.

Under MIPPA, CMS can consider whether Medicare should cover preventive services that Congress has not already deemed as covered or non-covered by law, as long as they have been “strongly recommended” or “recommended” by the U.S. Preventive Services Task Force.

CMS uses the national coverage determination process to make decisions on these types of preventive services. CMS is expected to issue a final coverage decision by December 8, 2009. The proposal is available online.

Not Enough Evidence to Recommend Screening Infants for Hyperbilirubinemia

According to a new evidence synthesis from the U.S. Preventive Services Task Force (USPSTF), the evidence is insufficient to recommend screening infants for hyperbilirubinemia to prevent chronic bilirubin encephalopathy. The USPSTF report found that, though screening can identify infants at risk of developing hyperbilirubinemia, not all children with chronic bilirubin encephalopathy have a history of hyperbilirubinemia. Furthermore, there is no known screening test that will reliably identify all infants who are at risk of developing chronic bilirubin encephalopathy.

The main barrier to establishing a recommendation was that evidence about the benefits of screening is lacking, especially because the condition is so rare that research is very difficult. On the other hand, the two treatments—phototherapy and exchange transfusion—both include a multitude of risks. Potential harms of phototherapy include weight loss, gastrointestinal problems, interruption of breastfeeding, disruption of the maternal-infant relationship, and possibly growth of melanocytic nevi. Exchange transfusions may result in apnea, bradycardia, cyanosis, vasospasm, thrombosis, necrotizing enterocolitis, and, rarely, death. The evidence summary and recommendation are available online.