In This Issue...

FDA Releases Document Outlining Its Role in Personalized Medicine

The Food and Drug Administration (FDA) recently released a report entitled, "Paving the Way for Personalized Medicine: FDA's Role in a New Era of Medical Product Development," which outlines the agency's activities over the past decade to advance the field of personalized medicine.  Specifically, the FDA identifies the actions it took to streamline the regulatory process, facilitate collaboration among different groups, and help translate scientific advances into clinical practice.  "From FDA's vantage point, the era of personalized medicine has clearly arrived.  Of the new drugs approved since 2011, approximately one-third had some type of genetic or other biomarker data included in the submission to characterize efficacy, safety, or pharmacokinetics."  For more information regarding the FDA's progress in this area, please visit the agency's website.

Congress Working on Budget Agreement

House and Senate conferees recently met to start drafting a blueprint for ending the current budget impasse.  The most recent agreement, which ended the government shutdown, did not resolve the fundamental disagreements between the two parties.  Congress has until January 15, 2014 to reach a new accord to prevent another government closure.

There is still much confusion over what would be included in a budget package.   What is known is that sequestration will cut federal spending by nearly $110 billion in 2014 with half coming from defense and the other half from non-defense discretionary programs, including Medicare.  To prevent the across-the-board cuts, Congress must either raise new revenues or make targeted spending cuts or draft a budgetary package that includes elements of both. 

Any comprehensive bipartisan agreement is likely to include the closing of certain tax loopholes and cuts in entitlement programs such as Medicare and Social Security.  In addition, farm subsidies and Medicaid would also be on the negotiating table.  For clinical laboratories, there are a number of provisions that could be added to a budgetary package, such as an extension of the annual 1.75 percent cut in the consumer price index or the establishment of a laboratory copayment.

The House and Senate conferees are supposed to release a budgetary plan by December 13th to give Congress time to debate and draft the needed spending bills prior to the January 15th deadline.  GAU will continue to report on budgetary matters as additional information becomes available.  To get faster updates, join AACC's Government Affairs listserv, which is free to AACC members and non-members alike.

Congress Unveils SGR Fix

The Chairs of the House Ways and Means and Senate Finance committees recently released a draft legislative proposal that would permanently repeal the physician sustainable growth rate (SGR).  The SGR was created in 1997 to rein in physician spending.  Flaws in the payment system, however, have regularly resulted in projected payment reductions of more than 20 percent.  Congress prevented these cuts from taking effect often by reducing the fees of other providers.  A temporary fix in 2012 resulted in a two percent cut in laboratory reimbursement for 2013.  The current Senate proposal would freeze physician updates for ten years, while the House version would limit physician updates to 0.5 percent for five years.  Physicians participating in shared risk endeavors, such as bundling and Accountable Care Organizations, would be eligible for incentive payments starting in 2017.  To date, clinical laboratories are not part of the initial package. This could change, however, as the committee finalizes its proposal.  If you would like a copy of the bill, please go to the Ways and Means website.

CMS Delays Payment Changes

The Centers for Medicare and Medicaid Services (CMS) announced that the release of the Medicare payment rules due out in early November will be delayed until the end of the month.  This includes the physician fee schedule final rule, which will report on whether the agency plans to evaluate all CPT codes (except for molecular) to determine whether technology costs have decreased.  In addition, the final hospital outpatient prospective payment system rule is expected, which could include the bundling of laboratory tests with other outpatient services.  The adoption of either of these changes would likely result in lower reimbursement for laboratory testing.  To see AACC's comments on these issues, please go to our government affairs website. 

House Bill Would Remove FDA Oversight of Clinical and Health Software

Representative Marsha Blackburn (R-TN) and five of her colleagues introduced the H.R.3303, the Sensible Oversight for Technology which advances Regulatory Efficiency (SOFTWARE) Act, which would limit Food and Drug Administration (FDA) oversight to high risk medical software, exempting apps geared towards consumers.   According to Rep. Blackburn the number of medical apps on smart phones will reach 500 million in 2015.  Broad FDA involvement in this area, she asserts, would hinder technological innovation in this fast growing area.  A copy of the joint press release is on Rep. Blackburn's web page and the bill is on the congressional website, THOMAS.

AACC Webinar on Strategies for Dealing with Reimbursement Changes

With Medicare and other healthcare providers continuing to ratchet down reimbursement rates for clinical lab tests, lab administrators must remain keenly aware of how these activities will affect their bottom line. Attend this program and learn what payment changes are on the horizon, how they may affect your laboratory, and how to best position your lab to maximize reimbursement in this 'race' to cut laboratory fees.