American Association for Clinical Chemistry
Better health through laboratory medicine
February 2011 Clinical Laboratory News: Regulatory Profiles

Regulatory Profiles

Individual Insurance Mandate Under Scrutiny

An essential part of the Obama administration’s health care reform law, the mandate for individuals to purchase insurance, is facing challenges in court, while other groups voice support for the measure. On December 13th, U.S. District Judge Henry Hudson of Virginia ruled that the provision requiring individuals to purchase health insurance is unconstitutional. In his 42-page ruling, Judge Hudson stated that Congress exceeded its authority by compelling individuals to “involuntarily enter the stream of commerce by purchasing a commodity in the private market.” The ruling only affects the individual mandate provision, with the rest of the statute left intact. The Obama Administration is likely to appeal this decision at a later date. 

In related news, a report from the Urban Institute, a non-partisan Washington D.C. think tank, warned that without the individual mandate for health insurance coverage in the healthcare reform law, uncompensated care would increase by approximately $30 billion, with 17 million additional uninsured Americans.

According to the report, “Why the Individual Mandate Matters,” which used the Urban Institute’s Health Insurance Policy Simulation Model, reform under the Affordable Care Act (ACA) without the mandate would also be more inefficient. Government spending on acute care for the nonelderly would increase by $69 billion under the ACA, but would still rise by $50 billion under reform if the mandate were eliminated. This occurs because the government is still covering the less healthy uninsured without the mandate.

Similarly, government funds used to reduce the number of uninsured would be used far more efficiently with the mandate than without it. Government spending per newly insured person would be $2,451 under the ACA, in contrast to $4,795 without the individual mandate.

The report is available from the Urban Institute website.

CMS Delays Physician Signature Requirement

The Centers for Medicare and Medicaid Services (CMS) issued a notice postponing the implementation of its requirement that clinical laboratories obtain physician signatures on all paper requisition forms when billing Medicare. The agency is delaying the January 1, 2011 change for 3 months while it launches an education campaign about the new requirement. The requirement does not affect electronic test orders. 

In the November 29, 2010 Medicare Physician Fee Schedule final rule, CMS finalized its proposed policy to require a physician’s signature on requisitions for clinical diagnostic laboratory tests paid under the clinical laboratory fee schedule effective January 1, 2011. However, CMS announced that the agency “is concerned that some physicians, NPPs [qualified non-physician practitioners], and clinical diagnostic laboratories are not aware of, or do not understand, this policy. As such, CMS will focus in the first calendar quarter of 2011 on developing educational and outreach materials to educate those affected by this policy. Once our first quarter of 2011 educational campaign is fully underway, CMS will expect requisitions to be signed.” As these materials become available, CMS promised to post new information on its website and use other channels to communicate with providers to ensure the information is widely distributed.

The notice is available on the CMS lab fee schedule website.

CMS Releases Value-Based Purchasing Regulations

The Centers for Medicare and Medicaid Services (CMS) issued proposed regulations that would establish a new hospital value-based purchasing program for Medicare. The program offers financial incentives to hospitals that demonstrate their performance on high quality care and patient safety beginning in 2013, as required by the healthcare reform law. The program would make value-based incentive payments to acute-care hospitals, based either on how well the hospital performs on quality measures determined by the Secretary of Health and Human Services, or on how far the hospital’s performance improves compared to a baseline period. A sliding scale will be used, with greater gains in performance earning higher rewards.

A tradeoff to fund the incentive would come through a reduction in base diagnosis related group (DRG) payments for discharges—1% in 2013, eventually increasing to 2% by 2017. The agency listed 17 clinical process-of-care measures as well as eight measures from the Hospital Consumer Assessment of Healthcare Providers and Systems survey that document patients’ experience of care. In addition, the agency would use nine measures from Agency for Healthcare Research and Quality, as well as three mortality outcome measures, and eight hospital-acquired condition measures.

CMS is accepting comments on the proposed regulation through March 13. The regulation is available from the Federal Register website.