In This Issue...

President Proposes New Cuts in Lab Payments

On April 10th, President Obama released his fiscal year (FY) 2014 budget.  The plan proposes a combination of cuts and tax increases to reduce the deficit by $1.8 trillion over the next ten years.  Among the nearly $400 billion in proposed Medicare cuts is a $9.5 billion reduction in clinical laboratory payments.  The proposal would extend the 1.75 percent cut in the consumer price index (CPI) update that was included in the health care reform law through 2023.  It was due to expire in 2015.  AACC is opposed to this cut.  The President’s proposal also states that the HHS Secretary should have the “authority to adjust payment rates under the CLFS in a budget-neutral manner, precluding administrative or judicial review of these adjustments.”  There is no further explanation regarding what adjustments may be intended.  Please go to the HHS Web site to see the President’s health budget.

New Bowles-Simpson Plan Recommends More Lab Cuts

The Chairmen of the President’s 2010 fiscal commission, Erskine Bowles (former Chief of Staff to President Bill Clinton) and Alan Simpson (former Republican Senator from Wyoming) have released a new plan to reduce the federal deficit.  The bipartisan proposal would cut the federal deficit by an additional $2.5 trillion over the next decade, including $585 billion from Medicare and Medicaid.  The policy leaders are recommending a number of proposed changes including the establishment of competitive bidding for laboratory services and the adoption of a uniform co-insurance system within Medicare (currently laboratory services is not subject to copayments).  This plan will get a lot of attention over the next few months as Congress and the President work to develop a long-term budget agreement. 

Supreme Considers Validity of Gene Patents

On April 15th, the Supreme Court heard arguments on whether human genes can be patented.  The case involves Myriad Genetics, which owns the patents on BRCA1 and BRCA2, two genes associated with breast and ovarian cancer.  As the sole patent holder, Myriad has the exclusive right to test for the genes.  Over the past few years, a number of groups, such as the ACLU and American Society of Human Genetics, have questioned the validity of these patents, suggesting that genes are a product of nature, not an invention.  Opponents further suggest that the patent restrictions prevent laboratories from verifying the accuracy of the tests and hinder scientific research. Myriad disputes these claims, asserting that outside confirmatory testing is available that more than 9,000 research papers have been published on the genes.  To date, one New York Federal Court has ruled in favor of patent opponents, while two federal appeals courts have sided with Myriad.  A Supreme Court decision on gene patenting is expected by the end of June.

Administration Consults Congress on IPAB Nominations

HHS Secretary Kathleen Sebelius has written to House and Senate congressional leaders requesting nominations of individuals to serve on the Independent Payment Advisory Board (IPAB).  The advisory panel, mandated by the 2010 health care reform, is authorized to make budget cuts in Medicare spending, without congressional authorization, if certain spending thresholds are exceeded.  IPAB is required to make its first recommendations in 2014, with implementation in 2015, if warranted (Congress can replace the cuts with other reductions, but cannot prevent them from taking effect).  To date, the Administration has yet to form the panel.  The President is responsible for appointing the 15-member panel subject to congressional confirmation. The President’s FY’14 budget recommends reducing the threshold needed to rigger Medicare cuts, thus saving the government an additional $4.1 billion. AACC and many other groups support the repeal of IPAB.

PCORI Announces Advisory Panel Rosters

The Patient-Centered Outcomes Research Institute recently announced the individuals selected to serve on their four research advisory panels.  The panel has 21 members appointed for one-year terms from different areas of the health care community.  The research groups will help PCORI identify and prioritize research questions in the four areas: Disparities; Assessment of Prevention, Diagnosis, and Treatment Options; Improving Healthcare Systems; and Patient Engagement.  A listing of the panel rosters is available on the PCORI Web site.