In This Issue...

Sequestration Takes Effect

On March 1st, the first installment of the $1.2 trillion in budget cuts dictated by the Budget Control Act 2011 took effect.  The $85 billion is the first of ten payments required by law to bring government spending under control.  The statute mandates equal cuts in military and non-discretionary spending with the exception of Social Security, Medicaid and the Veterans Affairs.  These key health care agencies will be required to cut their spending by the following for 2013:

  • Centers for Disease Control and Prevention - $303 million
  • Centers for Medicare and Medicaid Services - $11.85 billion
  • Food and Drug Administration -- $209 million
  • National Institutes of Health -- $1.55 billion

The White House and Congress are meeting in an effort to come up with a replacement package of cuts.  It’s likely, however, that the provider cuts will remain in effect.  An Office of Management and Budget analysis of the sequester is available on the OMB Website.

Lab Cuts on the Horizon

The failure of the White House and Congress to reach a budget compromise means that Medicare providers will be subject to a two percent cut in payments starting April 1st as part of sequestration.  The $11 billion in across-the-board cuts will affect physicians, hospitals, clinical laboratories and other health care providers.  For clinical laboratories this will be on top of the cuts in the 2010 health care reform and the 2012 sustainable growth rate extension package.   The combination of these cuts will reduce laboratory payments, in the aggregate, by 20 percent over the next ten years.  AACC will continue to work with its laboratory partners to oppose reductions in laboratory payments.

New Simpson-Bowles Plan Seeks Deeper Cuts Beyond Sequestration

Former Senator Alan Simpson (R-WY) and former Chief of Staff to President Bill Clinton, Erskine Bowles, have released a new plan to cut the deficit by an additional $2.4 trillion over ten years.  These reductions would be on top of the $1.85 trillion in cuts identified in the Budget Control Act of 2011.  Although light on specifics, the two deficit hawks are proposing to limit the growth in health spending by reducing provider payments and reforming cost-sharing, which most likely means the establishment of a beneficiary co-payment.  The White House and Congress may use this plan as a framework for any future budgetary agreement.  To get a copy of the proposal, please visit the Moment of Truth Project Website.

Senators Introduce Medicare Reform Legislation

Senators Bob Corker (R-TN) and Lamar Alexander (R-TN) recently introduced legislation, S.11, the Fiscal Sustainability Act of 2013, which would streamline the Medicare program and reduce its overall expenditures.  The two legislators are proposing to reform Medicare by:

  • increasing the eligibility age from 65 to 67 years of age by 2025;
  • increasing premiums for higher income individuals;
  • and establishing a 20 percent co-payment for all services, including clinical laboratory testing. 

The items listed will be part of budget negotiations this year.  AACC will continue to oppose the adoption of a beneficiary co-payment for laboratory services.  If you would like a copy of this legislation, please go to the congressional Web site, THOMAS.

Choosing Wisely Campaign Issues New List

The Choosing Wisely campaign recently released 18 lists of tests or procedures that its member groups have identified as being over utilized within the health care system or unnecessary.  The initiative, started in 2012 by the ABIM Foundation, seeks to improve communication between physicians and patients regarding the quality of care they receive.  To date, the 30 health care organizations that comprise Choosing Wisely have identified more than 130 health services that may inappropriately ordered on a routine basis.  Among those pertaining to clinical laboratories are recommendations that clinicians not:

  • perform population based screening for 25-OH-Vitamin D deficiency.
  • use bleeding time test to guide patient care.

ABIM stated that additional lists from 15 specialty societies will be released this fall.  To see the tests and procedures identified by the Choosing Wisely partners, please visit its Website.