In This Issue...

Election Results

After months of campaign speeches, events and commercials, the 2012 election has come to a close. President Barak Obama won re-election over Governor Mitt Romney by a popular vote of 50-48 percent (electoral vote of 332-206). This makes President Obama the third President in-a-row to seek and win a second term, the fifth since 1972.

The incoming 113th Congress will resemble the current legislature with the Democrats controlling the Senate and the Republicans the House. The Senate Democrats strengthened their hold over the Upper Chamber by increasing their ranks to 55 (53 Democrats plus 2 Independents who will caucus with the party) with the Republicans losing two seats. Senator Majority Leader Harry Reid (D-NV) will retain his leadership position in the upcoming Congress.

On the House side, Republicans retained the Lower Chamber by a margin of 234-201. Speaker of the House John Boehner will keep his top post. He has indicated that the Republicans are willing to work with the President on deficit reduction and that the President's health care law is "now the law of the land," inferring that GOP efforts to eliminate the bill are over. However, Boehner did state that House Republicans would continue efforts to modify the bill.

Longtime House Democratic health care leader Rep. Pete Stark (D-CA) was defeated in his efforts to win a 21st term. Rep. Stark was the author of the physician self-referral ban regarding laboratory services. CLIA author Rep. Henry Waxman (D-CA) won a close re-election race over Independent Bill Bloomfield. On the Republican side, GOP Vice-Presidential nominee Rep. Paul Ryan (R-WI) easily won re-election to the House over his Democratic opponent. The 113th Congress will convene in early 2013.

Forthcoming Budget Issues

Congress has a number of budgetary issues that it must address before it adjourns for 2012. Foremost it must deal with sequestration. Under the Budget Control Act of 2011, the federal government is required to reduce spending by $1.2 trillion over ten years starting on January 1, 2013. The law further stipulates that the cuts are to be divided between domestic spending and national defense. If the law is implemented, Medicare providers (including clinical laboratories) are expected to take a two percent cut in reimbursement.

In addition to sequestration, Congress must deal with two other issues with significant budgetary implications—the expiration of the Bush-era tax cuts and the temporary fix protecting physicians from a 26.5 percent cut in Medicare payments. Republicans want to extend the $400 billion in tax cuts, whereas the Administration wants to limit the cuts to those making less than $250,000—either option would require additional cuts. Similarly, postponing the physician sustainable growth rate reduction for another year would likely require another $20 billion—clinical laboratory laboratory payments will be cut two percent starting on January 1st to help pay for the earlier 'fix.'

When Congress tackles these issues, there are a number of additional laboratory cuts that may be on the table, including: a further reduction in the fee schedule; an extension of the 1.75 percent annual cut in lab payments that expires in 2015; the adoption of competitive bidding; the establishment of a co-payment for clinical laboratory services; and the bundling of Medicare services for payment purposes. AACC, as part of the Clinical Laboratory Coalition, will be working with its laboratory partners in an attempt to forestall these cuts. The Association will be asking you at the appropriate time to contact you legislators in opposition to additional cuts in laboratory reimbursement.

CMS Assigns Molecular Pathology Codes

The Centers for Medicare and Medicaid Services (CMS) has released its final decision regarding which fee schedule to place the new molecular pathology codes. The agency selected the Clinical Laboratory Fee Schedule (CLFS). CMS mentioned a number of reasons for this decision, including the significant role played by non-physicians in interpreting these tests and the rapid technological advances making individual interpretation unnecessary in some cases.

If the molecular codes had been placed on the physician fee schedule (PFS) they would have been subject to a 20 percent copayment (tests on the CLFS are not subject to copayments). In addition, the PFS periodically reviews and updates payment amounts. Therefore the molecular tests could have been subjected to additional cuts on the PFS over time. CMS plans to use the gap-fill process to pay for the tests in 2013. The agency stated that it will not create a separate interpretive code for non-physician interpretation, however, since technical consultation is considered to be part of the Medicare payment for a laboratory test.

To see a copy of the final rule, please visit the Federal Register web site. To learn more about this rule and what it means for clinical laboratories, please check out AACC's November 27th Reimbursement and Regulatory Update 2013 webinar.