Medicare Laboratory Payment Policy Now and in the Future (2000) / Chapter Skim
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1 Introduction
1 Introduction
Pages 18-28
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From page 18... ...
Although specific payment rates have changed over the past 20 years, the basic payment methodology has remained unchanged since the early 1980s. The introduction of new technologies and changes in regulations and the laboratory marketplace have had a significant impact on the structure of the laboratory industry during the past 20 years.2 In the face of these changes, current Medicare payment policy for outpatient clinical laboratory services seems not only outdated, but also irrational.
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From page 19... ...
Medicare payments for outpatient clinical laboratory services represent about 10 percent of the business of clinical laboratories.3 In part because of repeated cuts in Medicare's payment rates for laboratory tests, the actual amount in real dollars that Medicare spends on outpatient clinical laboratory services has declined.4 In addition, limited evidences suggests that Medicare payment policy for outpatient clinical laboratory services influences payment policy for some private payers, and Medicare limits are a cap on state Medicaid laboratory payment rates. Recognizing that Medicare's payment system for clinical laboratory services may have to be modernized, Congress mandated that the Secretary of the Department of Health and Human Services (DHHS)
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From page 20... ...
. Assess the strengths and weaknesses of the current Medicare payment methodology for outpatient laboratory tests.
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From page 21... ...
of Columbia, Maryland, to conduct a survey of selected health plans to determine their payment rates for 21 laboratory tests plus venipuncture (Appendix c) .6 CHPS Consulting also conducted a limited number of site visits to a variety of laboratory providers to determine their costs of providing a subset of these same laboratory tests.
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From page 22... ...
In the context of clinical laboratory services, three aspects of access are pertinent: medically necessary laboratory tests9 should be available to all Medicare beneficiaries;~° overly burdensome financial barriers should not limit beneficiary access to appropriate services; and finally, turnaround time, or the length of time it takes for the physician to get laboratory test results, should not jeopardize quality of care.
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From page 23... ...
To provide context for the remainder of this report, the next two sections of this chapter describe the types of clinical laboratory services covered by the Medicare Part B outpatient fee schedule and outline the basic structure of the Medicare payment system. ~ ~ Some political and economic analysts point out the risk of a government agency, instead of representing the interests of the general public, to unduly take the interests of the firms it regulates into account.
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Although there are many types of clinical laboratory services, many are not covered by health insurance. Other uses of clinical laboratory services that are not covered by Medicare include screening for drugs
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THE MEDICARE PROGRAM The committee was asked to analyze payment policy for a very specific portion of the Medicare program—clinical laboratory services paid for under the Part B outpatient Medicare benefit. It is important, therefore, to understand the structure of the Medicare program in order to focus on the portion of Medicare payment policy that the committee was asked to evaluate.
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From page 26... ...
The list of payment amounts for all clinical laboratory tests in each of the 56 Medicare carrier jurisdictions is called the laboratory fee schedule. The fee schedule has prices for approximately 1,100 separate tests, which pays for the technical component of the test.~5 The current payment methodology was established in 1984 and revised in 1986, but current fees are based on what laboratories were charging for tests in their local area in 1983, adjusted over time.
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From page 27... ...
The next three chapters provide background information on clinical laboratories and Medicare payment policy. Chapter 2 reviews the clinical laboratory industry as a whole; its Medicare outpatient market segment; and the way environmental trends in regulation, government efforts to reduce waste and abuse, and payment levels have affected the industry.
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From page 28... ...
June 1991. Medicare Payments for Clinical Laboratory Test Services are too High.
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