BOX 7.1 Recommendations

Because changes in the current Medicare payment formula could require new legislation, implementation of many of the committee’s recommendations will entail congressional action. The committee recommends that the Health Care Financing Administration (HCFA), the administration, and the Congress work together to develop the necessary enabling authority and funding.

Recommendation 1: Medicare payments for outpatient clinical laboratory services should be based on a single, rational, national fee schedule.

Recommendation 2: On an interim basis, relative payments for Medicare outpatient clinical laboratory services should be based on the current National Limitation Amounts (NLAs).

Recommendation 3: A data-driven consensus process for refining the new Medicare national fee schedule for outpatient clinical laboratory services should be developed. HCFA should explore alternative methods for gathering data to be used in the process.

Recommendation 4: Medicare national fees for outpatient clinical laboratory services should be adjusted for geographic location. HCFA should also evaluate the need to adjust for certain other circumstances, particularly those likely to affect beneficiary access, and make recommendations to the Congress.

Recommendation 5: Processes should be put in place to refine and periodically update the fee schedule for Medicare outpatient clinical laboratory services.

Recommendation 6: To incorporate new tests into the Medicare laboratory fee schedule, there should be an open, timely, and accessible process that is subject to challenge. The process and fees produced should not impede clinical decision making that is essential to providing appropriate care.

Recommendation 7: HCFA should review alternatives to the current system for coding outpatient clinical laboratory services for claims processing. More accurate, open, and timely coding processes for new technologies as well as tests and services should be sought.

Recommendation 8: The current policy of not requiring beneficiary cost sharing for Medicare outpatient clinical laboratory services should continue. Cost sharing is unlikely to significantly reduce overuse or increase the detection of fraud and abuse; it could create barriers to access for the most vulnerable Medicare beneficiaries; and it would be financially and administratively burdensome for laboratories, patients, and the Medicare program depending on its design.

Recommendation 9: HCFA should discontinue use of International Classification of Diseases, Ninth Revision (ICD-9) diagnosis codes as the basis for determining the medical necessity of clinical laboratory tests. HCFA should assess the need for any approach to evaluating the medical necessity of individual laboratory tests prior to payment of a claim. In addition, HCFA should evaluate alternative approaches for identifying and reducing unnecessary or inappropriate laboratory testing.

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