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Press Start: Lead an Empowered Life as a Clinical Laboratorian

Competitive Bidding a Huge Mistake

Published November 27, 2007 12:49 PM by Glen McDaniel
Medicare is a huge payer in healthcare, so it is not surprising the government is on a constant quest to reduce Medicare spending. CMS, the agency that administers Medicare, is inherently suspicious and suspects fraud and abuse behind every bush.

The fact is providers feel a need to "work around" complex requirements or cope with ever-increasing and convoluted regulations, which to CMS is an attempt to circumvent the law (or regulation, sometimes it's just CMS's interpretation of the law).

This Kabuki dance of CMS versus providers affects all of healthcare from hospitals to doctors to laboratorians, but the latest CMS move that affects the clinical laboratory community directly is a decision to develop a demonstration project to competitively bid for laboratory services. The goal is to find the feasibility of having labs bid competitively to provide services to Medicare participants. Read more.

CMS claims this project will save the government money and help them arrive at a more "rational" fee scale. Are laboratory services an area in which you always want to go with the lowest bidder? The implications could be devastating for smaller labs, which would be forced out of business if they can't compete on price alone.

What about access to care as smaller labs go out of business? Is it a good thing to ship specimens from a small community to the large McLab in the big city and wait for results because it can provide testing at a low price because of its economies of scale?   

Lab groups are very concerned with this eventuality. Some in Congress are working with the laboratory groups to seek repeal of CMS's demonstration project to competitively bid clinical laboratory services. CMS has chosen the San Diego area as the first of two demonstration sites. The implementation date is up in the air because of the recent fires in the area.

However, this is just a postponement; the threat has not gone away, nor is it too late to let your voice be heard. Most laboratory groups have links on their Web sites from which you can contact Congress to air your concerns. Here is the link for the AACC site and here is a sample letter.


Recently the Congress, specifically the House, passed H.R.6331, which contains a provision repealing the Medicare competitive bidding demonstration for clinical laboratories.  The Senate is scheduled to consider this bill this week.  

Two weeks ago, the Senate tried unsuccessfully to bring a similar bill to a vote.  Voting was successfully prevented by a parliamentary procedure called cloture- a device used to delay voting on a bill.  The cloture was successful when they got only 54 votes instead of the 60 votes required to end cloture and allow a vote on the bill.

It is important that laboratorians contact their legislators and ask them to vote for a repeal of competitive bidding.

Glen June 26, 2008 8:25 PM
Atlanta GA

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