In This Issue...


Sequestration Nearly Here

The March 1st sequestration deadline is fast approaching and there is a good chance that Congress and the President will not reach an agreement to prevent the ten-year $1.2 trillion in across-the-board cuts required by the Budget Control Act of 2011. These cuts will apply to nearly all federal programs (Medicaid, Social Security and the Veterans Administrations are exempt from the cuts). For 2013, federal spending would be reduced $85 billion--$46 billion from the military and $39 billion from the nondefense programs.

Many of the federal health programs will be subject to funding cuts, including:

  • the National Institutes of Health - $2.5 billion;
  • the Centers for Disease Control and Prevention - $500 million;
  • the National Science Foundation - $600 million; and
  • the FDA - $319 million.

Medicare providers, including clinical laboratories, will also have their payment rates reduced by two percent. For more information on the impact of the sequester, please visit the Washington Post Website. GAU will continue to monitor and report on this issue.

Legislators Introduce Bills to Repeal Medical Device Tax

Senator Orrin Hatch (R-UT) and Rep. Erik Paulsen (R-MN) recently introduced legislation to repeal the 2.3 percent excise tax on medical device manufacturers that took effect on January 1st . Both bills, S.232, Medical Device Access and Innovation Protection Act, and H.R.523, the Protect Medical Innovation Act of 2013, have broad bipartisan support. The House passed similar legislation during the last Congress and is likely to do so again this session. The fate of the measure will be determined by the Senate, where the legislation stalled in the past. AACC has endorsed the legislation. If you would like a copy of the bills, please go the congressional Website, THOMAS.

CMS Releases Regulatory Reduction Proposed Rule

On February 7th, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule to reduce unnecessary federal regulation. Among the suggested changes is a proposal to give the agency greater flexibility in determining what penalties to assess when a laboratory refers proficiency testing (PT) sample to an outside laboratory.

Under the current CLIA'88 regulations, the agency is required to revoke a testing facility's certificate for one year and ban the owner and laboratory director from performing their duties for two years if a PT sample is sent to an outside entity for analysis, even if it was in error. CMS is proposing to apply lesser penalties if the laboratory inadvertently sent the PT specimen to an outside lab and it meets the following criteria:

  • the PT samples were sent to another laboratory for reflex or confirmatory testing;
  • it is the first time the laboratory has been cited for referring a PT specimen to an outside entity; and
  • the event occurred as a result of the laboratory faithfully following its written, legally accurate and adequate standard operating procedure.

This carve-out is meant to be a one-time exception for laboratories that inadvertently refer a PT specimen. Rather than revoking a laboratory's certificate, CMS is suggesting alternative sanctions, such as civil money penalties or a directed plan of action. Subsequent violations, however, would be considered '"intentional' and the certificate terminated.

CMS acknowledges it may have to revisit this issue at a later date to take into consideration the AACC-backed initiative, the "Taking Essential Steps for Testing Act," which directs CMS to take a more flexible approach regarding the penalties for unintentionally sending out a PT specimen. CMS is accepting comments through April 8th. A copy of the proposal is on the Federal Register Website. To see AACC's endorsement letter, please visit the Associations Position Statements page.

AHRQ Director Stepping Downs

Carolyn Clancy, MD, the Director of the Agency for Healthcare Research and Quality (AHRQ), is leaving the federal agency after ten years. Dr. Clancy played an instrumental role in making AHRQ the lead federal agency in directing comparative effectiveness research, reducing medical errors, and improving patient safety. Dr. Clancy will remain in her position until a successor is chosen. For more information on Dr. Clancy's accomplishments, please go to the AHRQ Website.

Sign-up Today for AACC's Regulatory Affairs Laboratory Compliance Certificate Program

Enroll today in AACC's certificate program for Regulatory Affairs for Laboratory Compliance. This program will provide you with a broad understanding of the laws and regulations that govern your laboratory and provide vital insights into how to comply with them. In addition to online lectures, you will have the opportunity to test your knowledge through self-assessments and earn continuing education credits. Go to the regulatory affairs certificate web page to get more information on this AACC program.