Laboratory Fee Schedule Research Articles

Preoperative Testing for Urethral Sling Surgery for Stress Urinary Incontinence: Overuse, Underuse and Cost Implications

We identify areas of overuse and underuse in the preoperative evaluation of patients undergoing mid urethral sling surgery. We also estimate the effect of overuse of preoperative testing on health care costs. We conducted a retrospective review of women who underwent sling surgery with or without concomitant prolapse repair between 2012 and 2013. Physician orders for preoperative electrocardiogram, chest x-ray, basic metabolic panel, complete blood count, coagulation studies and urinalysis were classified as appropriate or inappropriate based on summary guidelines from the American Academy of Family Physicians. The additional costs of inappropriate tests were estimated using the 2014 Medicare clinical laboratory and physician fee schedules. A total of 101 women who underwent mid urethral sling surgery were identified and 346 preoperative tests were ordered. Overall 76% of coagulation profiles, 73% of complete blood counts, 47% of basic metabolic panels, 39% of chest x-rays and 21% of electrocardiograms ordered did not have an appropriate clinical indication. In addition, 6% of electrocardiograms, 22% of chest x-rays and 10% of urinalyses were not ordered despite an appropriate indication. The estimated charges of overused tests were $1,844.15 for the cohort, or $18 per patient. Preoperative testing is overused as well as underused in patients undergoing sling surgery. The greatest variation occurred with the use of electrocardiograms, chest x-rays and urinalysis. Poor adherence to national guidelines leads to increased health care costs and warrants increased awareness in following evidence-based guidelines.

Challenges in Laboratory Coding 2015

1. Kathleen Hansen, MLS(ASCP)CM[⇑][1] 1. Advisor, ASCLS Government Affairs Committee, Laboratory Administration Consultant, Fairview Health Services, Minneapolis, MN 1. Address for Correspondence: Kathleen Hansen, MLS(ASCP)CM, 2309 Beverly Road, St. Paul, MN 55104, 651-983-8613 khansen3{at}fairview.org INTRODUCTION Laboratory managers and others have long been familiar with the use of Current Procedural Terminology (CPT) codes to identify services provided by the laboratory for billing and reporting purposes. The CPT manual is the property of the American Medical Association (AMA) and is updated annually, including the laboratory section, which encompasses CPT codes 80047-89398. Until recently, the typical year's update consisted of 10-15 new or modified codes. Updates are announced in early summer, and the Center for Medicare and Medicaid Services (CMS) holds a mid-July meeting each year at which stakeholders present testimony about the new codes and make suggestions as to how they should be priced by CMS. ASCLS Executive Vice President Elissa Passiment attends this meeting to present our views, or alternatively ASCLS submits testimony in writing. Final codes and instructions for their use are published in the fall. Reimbursement amounts are published near the end of the year with the new Clinical Laboratory Fee Schedule (CLFS). Reimbursement amounts for the CLFS are determined using one of two methodologies: crosswalk or gap fill. Crosswalk matches the new code with an existing code that is deemed to be of similar cost to perform, and assigns that same reimbursement to the new code. Gap fill assumes that the new code is sufficiently different from existing codes to need its own reimbursement determination. Each Medicare contractor decides what its reimbursement will be based on its determination of the cost to perform the test. These different amounts are used for a… ABBREVIATIONS: CLFS – Clinical Laboratory Fee Schedule, CPT - Current Procedural Terminology, AMA - American Medical Association, CMS - Center for Medicare and Medicaid Services, HCPCS – Healthcare Common Procedure Coding System, NGS - Next Generation Sequencing, MAC - Medicare Administrative Contractor, Mopath – molecular pathology, MUE - Medically Unlikely Edit [1]: #corresp-1

Cost Estimates and Economic Implications of Expanded RAS Testing in Metastatic Colorectal Cancer

In colorectal cancer (CRC), evidence shows that expanding RAS testing to analyze more mutations may better predict benefit from anti-EGFR therapy. The economic implications of expanding RAS testing for metastatic CRC were analyzed. Estimates of standard KRAS exon 2 testing were based on the Centers for Medicare and Medicaid Services (CMS) 2014 Diagnostic Laboratory Fee Schedule, and expanded RAS testing was estimated using a sensitivity analysis done with various potential cost scenarios (1, 2, 10, and 30 times the cost of the standard KRAS test). The cost estimates for cetuximab and panitumumab were based on the CMS payment allowance limits for Medicare Part B. A total of 28,692 patients with metastatic CRC were estimated to be eligible annually for RAS testing. For cetuximab, the societal cost of standard KRAS testing plus the drug versus expanded testing plus the drug would be $1.16 billion versus $816 million if the cost of the tests were the same. If the cost of the expanded RAS test were 30 times the cost of the standard test, then the societal cost of standard KRAS testing plus the drug versus expanded testing plus the drug would be $1.16 billion versus $980 million, a continued savings of more than $184 million annually. Similar savings were seen with panitumumab. The increased societal cost of expanded RAS testing versus standard approved KRAS exon 2 testing was inconsequential when compared with the amount of money saved by not treating the additional 18% of patients who harbor additional RAS mutations (beyond exon 2) with anti-EGFR therapy.

Current Status of Clinical Laboratory Reimbursement

1. Rick Panning, MBA, MLS(ASCP)CM[⇑][1] 1. Chair, ASCLS Government Affairs Committee , Director of Business Development for Shared Clinical Services, Fairview Health Services, Minneapolis, MN 1. Address for Correspondence: Rick Panning, MBA, MLS(ASCP)CM , 4894 Meadow Lane, Shoreview, MN 55126, 651-280-5909, panning4{at}comcast.net. 1. Define the basic difference between retrospective reimbursement and prospective payment as it applies to laboratory services. Describe the impact this has had on the laboratory. 2. Describe how ACA has specifically impacted laboratory reimbursement in at least two ways. 3. Identify current potential threats to laboratory reimbursement. Introduction In general, reimbursement for laboratory services in this country comes from two third-party payer sources - government and private sector. This third-party payment allows patients to access laboratory services from hospitals, physician offices, long-term care and other post acute providers and private laboratories. There are many components to this complex reimbursement system, including how and when tests are covered (coverage decisions), procedure and diagnosis codes (identifying what was actually ordered and performed) and payment methodologies. While levels of reimbursement are intended to reflect the value and the cost of the service being provided, over time the level of payment has been continually reduced to meet financial goals of the government or the healthcare system. Government payers primarily reflect Medicare on the federal level and Medicaid (Medical Assistance) on the state level. The Medicare program is the most influential reimbursement system since it often impacts state programs and private payer reimbursement policies and payment levels. All public payers and approximately 67% of private payers use Medicare's payment methodologies as the basis for their own and as tools for negotiating discounts with providers.1 In our current fiscal environment, with pressures on the federal budget and concerns about the long term viability of Medicare, we have seen a change in which the Medicare program is beginning to look at private payer reimbursement levels as an opportunity to reduce its financial responsibility for laboratory reimbursement. The steady reduction in payment levels from Medicare and other payers are resulting in a negative impact on… ABBREVIATIONS: ACA – Accountable Care Act; APC – Ambulatory Patient Classification; CAH – Critical Access Hospital; CLFS – Clinical Laboratory Fee Schedule; CMS – Centers for Medicare and Medicaid Services; CPI – Consumer Price Index; DRG – Diagnosis Related Group; FEHB – Federal Employee Health Benefits; IOM – Institute of Medicine; MolDX – Molecular Diagnostics; MS-DRG – Medical Severity Diagnosis Related Group; NLA – National Limitation Amount; OIG – Office of Inspector General; OPPS – Outpatient Prospective Payment System; PPS – Prospective Payment System; SGR – Sustainable Growth Rate. 1. Define the basic difference between retrospective reimbursement and prospective payment as it applies to laboratory services. Describe the impact this has had on the laboratory. 2. Describe how ACA has specifically impacted laboratory reimbursement in at least two ways. 3. Identify current potential threats to laboratory reimbursement. [1]: #corresp-1

Direct medical costs of complications of diabetes in the United States: estimates for event-year and annual state costs (USD 2012)

Objective:To estimate the direct medical costs associated with managing complications, hypoglycemia episodes, and infections associated with type 2 diabetes expressed in 2012 United States dollars (USD).Methods:Direct data analysis and microcosting were used to estimate the costs for an event leading to either a hospital admission or outpatient care, and the post-acute care associated with managing macrovascular and microvascular complications, hypoglycemia episodes, and infections. Data were obtained from many sources, including inpatient and emergency department databases, national physician and laboratory fee schedules, government reports, and literature. Event-year costs reflect the resource use during an acute care episode (initial management in an inpatient or outpatient setting) and any subsequent care provided in the first year. State costs reflect annual resource use required beyond the first year for the ongoing management of complications and other conditions. Costs were assessed from the perspective of a comprehensive US healthcare payer and expressed in 2012 USD.Results:Event-year costs (and state costs) for macrovascular complications were as follows: myocardial infarction $56,445 ($1904); ischemic stroke $42,119 ($15,541); congestive heart failure $23,758 ($1904); ischemic heart disease $21,406 ($1904); and transient ischemic attack $7388 ($179). For two microvascular complications the event-year and state costs were assumed the same: $71,714 for end stage renal disease, and $2862 blindness. The event-year cost was $9041 for lower extremity amputations, and $2147 for diabetic foot ulcers. Costs were also determined for managing hypoglycemic episodes: $176–$16,478 (depending on treatment required), and infections: vulvovaginal candidiasis $111, lower urinary tract infection $105.Conclusions:This study, which provides up-to-date cost estimates per patient, found that managing macrovascular and microvascular complications results in substantial costs to the healthcare system. This study facilitates conduct of other research studies such as modeling the management of diabetes and estimating the economic burden associated with complications.

P-157 YI Donor Stool Preparation for Fecal Transplantation in Patients with IBD

Fecal Microbiota Transplantation (FMT) is an established therapy for recurrent C. difficile infections, and a potential therapy for inflammatory bowel disease (IBD). No standardized process for FMT is universally accepted or utilized. Our group has established an approved standard operating procedure for donor enrollment and screening for FMT use in IBD. We aim to present the cost and summarize the effort needed to establish an FMT program in an IBD center. Costs were calculated based on actual cost of materials and the 2013 Clinical Diagnostic Laboratory Fee Schedule (CDLFC). For all screening tests reported, the cost billed from the lab was collected. For tests that did not have an applicable billing code, equivalent screening was identified based on the (CDLFC). Time was calculated based on actual donor stool processing. Regulatory approval was required from 1 IRB, 3 internal committees and the FDA, which took 6 months in total. Donor screening required an interview, which took 30 minutes of clinical research time per donor, to administer and review the Donor History Questionnaire (DHQ). The costs of donor screening were $441.07 per donor (Table 1). Screened donors supplied a total of 5 samples of 50 g of fresh stool. Processing donor stool required purchasing both re-usable and disposable material. The up-front costs of re-usable processing materials were $586.66 (Table 2). In addition, each donor stool sample required a 1 mm disposable sieve valued at $4.49. Processing donor stool required use of a BSL2 hood, wet lab and a -80 freezer for storage (costs not included). Each 50 g of stool was blended (15 minutes) filtered through both filters (10 minutes) centrifuged (15 minutes) and re-suspended and frozen (10 minutes); total 50 minutes processing per donor sample. Cleaning and sterilizing equipment added another 30 minutes, for a total processing time of 80-110 minutes per sample depending on stool weight. Thawing donor samples of day of FMT took 4 hours on average prior to FMT. Donor stool preparation for FMT in patients with IBD requires several regulatory and facilities hurdles. The costs and time commitment should be factored into development of local FMT programs for patients with IBD.

Lean laboratories: laboratory medicine needs to learn from other industries how to deliver more for less

Laboratory medicine faces unprecedented challenges worldwide. Demand continues to grow year on year both in volume and complexity as populations age and healthcare becomes ever more sophisticated. Crude test numbers...

Incremental Costs Associated with Physician and Pharmacist Collaboration to Improve Blood Pressure Control

To compare costs associated with a physician-pharmacist collaborative intervention with costs of usual care. Cost analysis using health care utilization and outcome data from two prospective, cluster-randomized, controlled clinical trials. Eleven community-based medical offices. A total of 496 patients with hypertension; 244 were in the usual care (control) group and 252 were in the intervention group. To compare the costs, we combined cost data from the two trials. Total costs included costs of provider time, laboratory tests, and antihypertensive drugs. Provider time was calculated based on an online survey of intervention pharmacists and the National Ambulatory Medical Care Survey. Cost parameters were taken from the Bureau of Labor Statistics for average wage rates, the Medicare laboratory fee schedule, and a publicly available Web site for drug prices. Total costs were adjusted for patient characteristics. Adjusted total costs were $774.90 in the intervention group and $445.75 in the control group (difference $329.16, p<0.001). In a sensitivity analysis, the difference in adjusted total costs between the two groups ranged from $224.27-515.56. The intervention cost required to have one additional patient achieve blood pressure control within 6 months was $1338.05, determined by the difference in costs divided by the difference in hypertension control rates between the groups ($329.16/24.6%). The cost over 6 months to lower systolic and diastolic blood pressure 1 mm Hg was $36.25 and $94.32, respectively. The physician-pharmacist collaborative intervention increased not only blood pressure control but also the cost of care. Additional research, such as a cost-benefit or a cost-minimization analysis, is needed to assess whether financial savings related to reduced morbidity and mortality achieved from better blood pressure control outweigh the cost of the intervention.

Cost analysis of chromosome testing of the second miscarriage versus evaluation for recurrent early pregnancy loss

Although 50-70% of early miscarriages (<10 weeks) can be explained by numeric chromosome errors (trisomy, monosomy or polyploidy), miscarriage chromosome testing is not consistently performed. Evaluation for recurrent early pregnancy loss (REPL), defined as two or more early miscarriages, has been recommended, but guidelines for miscarriage chromosome testing have not been published. The objective of this study was to determine whether chromosome testing of the second miscarriage, followed by selective REPL evaluation when a numeric chromosome error is not found (miscarriage chromosome testing/selective REPL evaluation), is more cost effective than routine REPL evaluation. Using a decision analytic model, costs for miscarriage chromosome testing/selective REPL evaluation were compared to routine REPL evaluation. The REPL evaluation was derived from ACOG and RCOG guidelines. Base case probabilities for each variable in the model were determined from the literature and varied over a 20% range. Base case laboratory costs reflect self pay prices from Quest Diagnostics and CombiMatrix Diagnostics. Procedural costs were derived from NorthShore University HealthSystem. Ranges were determined using values from the 2010 Medicare Laboratory and Physician Fee Schedules, LabCorp, and Signature Genomics. All costs are in 2010 dollars. One-way sensitivity analyses were performed for all cost and probability variables. The primary outcome was the average cost for each strategy. The average cost for miscarriage chromosome testing/selective REPL evaluation was $2850, compared to $3369 for routine REPL evaluation, resulting in an average cost savings of $519 per patient. Miscarriage chromosome testing/selective REPL evaluation is 15% more cost effective than routine REPL evaluation in couples with recurrent early pregnancy loss. In addition, miscarriage chromosome testing identifies miscarriages with chromosome errors, which is useful information for patients and clinicians.

Outcome, toxicity profile and cost analysis of autologous stem cell mobilization

Autologous stem cell mobilization (ASCM) is conventionally done using high-dose CY plus granulocyte colony-stimulating factor (G). It is important to examine the outcomes, toxicity profile and costs of ASCM associated with CY+G. A retrospective study was conducted in 236 patients with myeloma or lymphoma undergoing ASCM with CY+G. An ideal outcome was defined as 2 × 10(6) CD34+ cells/kg collected on the planned day of collection in 1 or 2 apheresis without a negative clinical event. The total cost of ASCM including clinical events, were reported based on Medicare part-B physician, laboratory and ancillary fee schedule. ASCM was successful in 213 (90%) patients, but an ideal outcome was seen in only 50 (20%) patients. Median (interquartile range, IQR) total cost of CY+G stem cells mobilization was $10,605 ($9,230-$14,540). Ideal outcomes were associated with lower costs compared with non-ideal outcomes (median (IQR), $9914 ($8,743-$11,168) versus $11232 ($9,292-$15,518) respectively, P<0.001). The median (IQR) cost of non-ideal outcome was higher among lymphoma patients ($12,293 ($9578-$16,268)) compared with myeloma patients ($10,388 ($9,355-$14,360) (P=0.04). Although mobilization success is eventually realized with CY+G, it has a low rate of ideal outcome, associated with significant adverse events and costs.

Pharmacoeconomics of Stem Cell Mobilization Using Cyclophosphamide and G-Csf.

Abstract 4526 IntroductionAutologous stem cell mobilization (SCM) is conventionally done using chemotherapy and G-CSF (G). Although safe and effective, patients (pts.) are exposed to risks of cytotoxic chemotherapy and myelosuppression. Plerixafor (P) and G mobilizes stem cells (SC) without any myelosuppression. Understanding the pharmacoeconomics (PE) of SCM is important so that the optimal approach can be used. MethodsWe studied PE of high dose cyclophosphamide (CY) and G SCM in 241 pts. (1/2004 to 3/2008) undergoing first autologous stem cell transplant and compared outcomes to projected costs using P+G. CY was dosed at 3 gm/m2 and G started the next day (10 mcg/kg) for 10 days with a planned first day of collection on day 11. Dose escalations were per institutional protocol. Pheresis was initiated if peripheral blood (PB) had >15 CD34+ cells/uL. PE analyses were done to compute total cost and included cost of CY, G, pheresis, product processing, and clinical events. Cost was based on Medicare part B physician, laboratory, and ancillary fee schedule and was calculated from review of random patient records. This approach removed the bias of inter-institutional cost variations. Ideal Outcome (IO) was defined as >2×106 CD34+ cells/kg collected on the planned day of collection in 1 or 2 apheresis without a preceding negative event that lead to additional evaluation in clinic or inpatient. Results141 (61%) were males; 121 (50%) had myeloma (MM), 115 (48%) had lymphoma (L) and 5 had other diagnoses; 61 (25%) received radiation with prior therapy. Median WBC and neutrophil count prior to CY was 5.3 ×109 /L (range, 1.7 to 46), and 3.3 ×109/L (range, 0.95-31.37). 199 (82.6%) started pheresis on the planned first day of pheresis, 18 (7.9%) had a delay in start of pheresis (range, 1- 7 days) due to low PB CD34 count and 24 (9.9%) pts. did not proceed to pheresis due to low PB CD34+ cell count. The mean final SC dose was 10.22 ×106 CD34/kg (range, 0.45 - 60.18). Pts. with MM collected more than lymphoma (11.98 vs. 6.35, P<0.0001). 6 (2.8%) pts. collected <2 ×106 CD34/kg. Median number of pheresis was 1 (range, 0 - 4) with 41 (17%), and 10 (4.1%) requiring 2 and 3 pheresis, respectively. The target SC dose of >6×106 CD34/kg in MM pts. was collected in 1,2, or 3 pheresis in 84 (69.4%), 98 (80.9%), and 102 (84.2%), respectively. In L pts., the target SC dose of >2×106 CD34/kg was collected in 1, 2, or 3 pheresis in 68 (59%), 85 (73.9%) and 90 (74.3%), respectively. Clinical events included: febrile neutropenia (FN) clinic evaluation (7, 2.9%); FN admission (26, 10.8%); line infection (7, 2.9%); line change (8, 3.3%), gastrointestinal side effects (111, 46%), bone pain with evaluation in clinic (127, 52%) and admission for management of bone pain (9, 3.7%). Forty-three (18%) pts. were hospitalized for clinical events. IO was seen in 48 (20%) pts. 23% of MM and 15.7% of L pts. had an IO. Risk factors including prior radiation, WBC count and ANC prior to CY could not predict ability to collect SC or IO. Mean total cost of CY+G SCM was $10,732 (range, 6988-30827). IO was associated with a lower cost in overall group, (mean, $10,371 vs. $12,870, P=0.001), in MM pts. (mean, $10,511 vs. $12,152, P=0.026), and in L pts. (mean, $10,133 vs. $13,627, P=0.006). Assuming a similar distribution of IO in 100 pts. with MM and L, the projected per pt. cost of SCM would be $11,774 and $13,067 (mean, $12,421) with CY+G. Projected costs of SCM using P+G (based on published phase III data that used G dose of 10 mcg/kg without dose escalation and that the non-mobilizers had a maximum of 4 days of P) for 100 pts. with MM and L would be $12,852 and $8986 (mean, $10,919). These do not take into account costs associated with operational planning and predictability of the date of SCM with P+G, impact of the negative event on pts. quality of life with CY+G, effects of mobilization failure leading to other alternative clinical approaches including an allogeneic stem cell transplant (N=6). ConclusionOur study shows that SCM with CY+G is associated with a low incidence of IO. P+G can be justified as upfront method of SCM in pts. with MM and L from a PE perspective without any detrimental impact on SCM efficiency. As P+G is not associated with any negative clinical events related to myelosuppression, it should translate into a better quality of life for pts. SCM using P+G may allow for optimal utilization of resources which again will impact PE. These need to be validated and should be addressed in future studies of SCM. Disclosures:Jagasia:Genzyme: Research Funding.

The clinical laboratory fee schedule yesterday, today, tomorrow.

1. Joan Longberry, CLDir (NCA)[⇑][1] 1. is a retired clinical laboratory manager and consultant and an advisor for the ASCLS Government Affairs Committee 1. Address for Correspondence: Joan Longberry, 45 West Dunedin Road, Columbus, Ohio 43214, JoanLongberry{at}aol.com 1. Describe at least three changes in Medicare payment methodology for laboratory services following the implementation of the clinical laboratory fee schedule (CLFS) in 1984. 2. List the key provisions of the Balanced Budget Act of 1997 affecting payment for Medicare laboratory services. 3. Compare the initial mechanism for annual inflation adjustments to the CLFS with the actual updates between 1991 and 2007. 4. Discuss two reasons for the actual decreases in reimbursement for laboratories since the CLFS was implemented. 5. Explain the difference between the “cross-walking” and “gap-filling” processes used to set CLFS payment amounts for new tests. 6. List five recommendations in the IOM Report “Medicare Laboratory Payment Policy: Now and in the Future”. 7. Describe the key elements of the design for the Competitive Bidding for Medicare Clinical Laboratory Services demonstration project. 8. List the specific purposes for an alternative payment system outlined in the Medicare Clinical Diagnostic Laboratory Fee Schedule Modernization Act of 2008. Introduction For well over two decades, the laboratory community has been confronted with a myriad of legislative and regulatory changes in payment policies and reimbursement levels for services provided to Medicare beneficiaries for outpatient clinical laboratory services. When Medicare was first implemented, clinical laboratories were reimbursed according to usual, customary and reasonable charges and beneficiaries were responsible for a copayment. Following the enactment of the Deficit Reduction Act in 19841, payment to laboratories providing Part B services to Medicare changed to a national clinical laboratory fee schedule (CLFS) system. Although the fee schedule established in 1984 bears little resemblance to the actual cost of laboratory testing in 2009, it remains the mechanism by which laboratories are reimbursed. An Institute of Medicine study in 2000 made several recommendations for reimbursement that have yet to be implemented. This article will review the many problems and challenges to the CLFS that have occurred since its inception in 1984. The Beginning Initially under Medicare, clinical laboratories were paid for outpatient Part B services based on customary and reasonable charges. Each state had fiscal intermediaries (which reimbursed hospital laboratories) and carriers (which reimbursed independent and physician office laboratories) and each had different ranges of customary and reasonable charges. Clinical laboratories found collecting the then-required beneficiary co-payments of 20% to be exceedingly difficult, as most did not have a billing relationship with patients. In addition, the costs of billing and collecting such small amounts were financially and administratively burdensome. Thus, the laboratory industry supported the fee… ABBREVIATIONS: ASCLS = American Society for Clinical Laboratory Science; BBA = Balanced Budget Act; CLFS = clinical laboratory fee schedule; CMS = Centers for Medicare & Medicaid Services; CPI = consumer price index; CPT = current procedural terminology; FY = fiscal year; HCFA = Health Care Financing Administration; HHS = Department of Health & Human Services; HR = House of Representatives; IOM = Institute of Medicine; MSA = metropolitan statistical area; MMA = Medicare Prescription Drug, Improvement, and Modernization Act; NLA = national limitation amount; PL = public law 1. Describe at least three changes in Medicare payment methodology for laboratory services following the implementation of the clinical laboratory fee schedule (CLFS) in 1984. 2. List the key provisions of the Balanced Budget Act of 1997 affecting payment for Medicare laboratory services. 3. Compare the initial mechanism for annual inflation adjustments to the CLFS with the actual updates between 1991 and 2007. 4. Discuss two reasons for the actual decreases in reimbursement for laboratories since the CLFS was implemented. 5. Explain the difference between the “cross-walking” and “gap-filling” processes used to set CLFS payment amounts for new tests. 6. List five recommendations in the IOM Report “Medicare Laboratory Payment Policy: Now and in the Future”. 7. Describe the key elements of the design for the Competitive Bidding for Medicare Clinical Laboratory Services demonstration project. 8. List the specific purposes for an alternative payment system outlined in the Medicare Clinical Diagnostic Laboratory Fee Schedule Modernization Act of 2008. [1]: #corresp-1

Laboratory reimbursement--competitive bidding and after.

1. Judy Davis Will 2008 be considered a watershed year for clinical laboratory Medicare reimbursement? Early in the year laboratories faced a dismal reimbursement future with a competitive bidding demonstration project scheduled to begin in San Diego in July, along with a soon-to-be announced second site. Fast forward to August and Congress has repealed CMS's authority to implement the demonstration, legislation has been introduced to re-engineer the laboratory fee schedule, and laboratories are poised to receive a 4.5% update beginning January 1, 2009. Let's look at how these paradigm changes occurred and the potential impact in the future. The 2003 Medicare Modernization Act, best known for implementing a prescription drug benefit for seniors, also included a provision for a competitive bidding demonstration project for Medicare Part B clinical laboratory services to occur in two areas. Despite ongoing opposition from the entire clinical laboratory industry, the Centers for Medicare Services (CMS) has proposed competitive bidding for laboratory services multiple times in the past. The industry remains concerned that when a limited number of laboratories are selected to provide all testing in an area, primarily based on cost, significant incentives exist to bid below cost such that quality of testing may be compromised and beneficiary access is reduced. Competitive bidding came closer to fruition this time than previously—San Diego was named the first site and bids were submitted. The process was delayed shortly before winners were to be announced in April when a preliminary injunction was granted in response to a lawsuit against CMS, filed…

Clinical laboratory practitioners speak out on Capitol Hill.

1. Paula Garrott Clinical laboratory professionals representing many levels of practice and a variety of institutions and organizations converged on Washington DC March 17-18, 2008 to attend the 20th Annual ASCLS Legislative Symposium. The symposium, which was co-sponsored by ASCP and CLMA, provides an opportunity for clinical laboratory professionals to review legislative and regulatory issues affecting the clinical laboratory and to meet with members of Congress and their staffs to share the concerns and positions of the laboratory community. A show of hands determined that about half of the “Leg Day” attendees were first-timers, including a number of students. Also participating this year were the members of the inaugural class of the ASCLS Leadership Academy. The group of individuals that had previously attended included a handful that had attended all twenty Legislative Symposia! The first day activities were designed to assure that even the “rookies” would be comfortable with the issues and the process of lobbying. The morning session included an overview and impact of legislative and regulatory issues. ASCLS, ASCP, and CLMA staff and legislative liaisons, as well as members of the ASCLS Government Affairs Committee, discussed the federal budget proposals, competitive bidding for clinical laboratory services, potential legislation to modernize the clinical laboratory fee schedule, and the laboratory personnel shortage. Judy Yost from the Centers for Medicare and Medicaid Services (CMS) provided a CLIA update. The update on the Competitive Bidding Demonstration Project included an overview of the legislative background for the project, a review of bidding requirements, the current status,…

Competitive bidding: an update.

1. Linda Comeaux 2. Judy Davis 3. Don Lavanty Competitive bidding for Medicare Part B clinical laboratory services - it's been the most powerful unifier of the clinical laboratory industry due to the propensity to dilute the quality of laboratory services, impede access for beneficiaries, and remove any future laboratory competition within the demonstration sites. The first phase of the demonstration, called for in the Medicare Prescription Drug Improvement and Modernization Act of 2003, was to begin April 1, 2007. At this writing in February, the final plan is still pending approval of the Office of Management and Budget (OMB). No announcement has been made regarding the site location, the demonstration design, the application form, or other final plans. While ASCLS concurs that the current clinical laboratory fee schedule is outdated and needs revision, competitive bidding is not the most effective way to accomplish that goal. Let's look at how CMS proposes the demonstration occur and at actions ASCLS and other laboratory groups are taking in opposition to the proposal. The demonstration will exclude hospital inpatient and outpatient testing and physician office testing, except when the facility acts as a reference laboratory and performs testing on patients from other facilities. Each laboratory performing $100,000 of testing annually on beneficiaries residing in the bidding area will be required to submit a bid for each of over 1000 CPT codes reimbursed by the fee schedule. Laboratories must bid on all CPT codes but can form consortia with other laboratories. While multiple winners will be awarded, losing laboratories will not be able…

CMS: Standing Orders Insufficient for Glucose Monitoring

Under the CMS final rule for the 2007 physician schedule, proposed policies would mean that a physician's standing order would not be sufficient to order routine blood glucose monitoring for a resident of a skilled nursing facility. The physician also would be required to certify that each blood glucose test given to a resident of a skilled nursing facility is medically necessary. The final rule applies these general policies to all providers who bill to the Medicare Part B clinical laboratory fee schedule (including home health agencies), not just SNFs, and makes clear that the policies apply only when the provider (for example, the SNF) requests Medicare to pay separately for a blood glucose test under the outpatient Part B clinical laboratory fee schedule. The proposed policies are raising concerns in the health care community. The American Medical Directors Association said CMS is predicating its “blood glucose payment guidance based on the seriously flawed medical practice belief that each and every blood glucose measurement must be ordered by a physician and subsequently responded to by a physician.” Separately, Bruce Yarwood, president and CEO of the American Health Care Association said, “The new rule for individually authorized finger stick tests for diabetic patients puts paperwork ahead of quality patient care.” He said, “Many patients and residents in our nation's long-term care facilities require up to four blood tests a day to properly manage their diabetes, and placing restrictions on this essential test is inconsistent with accepted best practices for diabetes management.” According to CMS, regulations generally require that a medical service be reasonable and necessary for diagnosis and treatment in order for that service to be eligible for coverage by Medicare. Regulations already require that to be considered reasonable and necessary, any diagnostic test—including a clinical diagnostic laboratory test—must be ordered by the physician and the ordering physician must use the result in the management of the beneficiary's specific medical problem. Tests that are not ordered by the physician who is treating the beneficiary would not be considered reasonable and necessary. “This [CMS] guidance is contrary to what is universally known to be good diabetic management,” according to the American Medical Directors Association. It contradicts “everything that the medical, nursing, and even home-based consumer community currently practices, and directly opposes all respected practice guidelines on diabetic management including AMDA's Clinical Practice Guideline on Managing Diabetes in the Long Term Care Setting.” In the context of blood glucose monitoring, CMS recently stated this policy in Transmittal AB-00–108, Glucose Monitoring, which is available at http://www.cms.hhs.gov/transmittals/downloads/ab00108.pdf. This interpretation of the Public Health Services Act's section on diagnostic x-ray tests, diagnostic laboratory tests, and other diagnostic tests also is the basis for CMS policy in chapter 7 of the Medicare Claims Processing Manual (Skilled Nursing Facility Part B Billing, available at http://www.cms.hhs.gov/manuals/downloads/clm104c07.pdf).

ASM Comments on 2006 Clinical Laboratory Fee Schedule

ASM Comments on 2006 Clinical Laboratory Fee Schedule

Economic Evaluation of Oral Treatments for Neuropathic Pain

The effectiveness of amitriptyline, carbamazepine, gabapentin, and tramadol for the treatment of neuropathic pain has been demonstrated, but it is unknown which one is the most cost-effective. We designed a cost-utility analysis of a hypothetical cohort with neuropathic pain of postherpetic or diabetic origin. The perspective of the economic evaluation was that of a third-party payor. For effectiveness and safety estimates, we performed a systematic review of the literature. For direct cost estimates, we used average wholesale prices, and the American Medicare and Clinical Laboratory Fee Schedules. For utilities of health states, we used the Health Utilities Index. We modeled 1 month of therapy. For comparisons among treatments, we estimated incremental cost per utility gained. To allow for uncertainty from variations in drug effectiveness, safety, and amount of medication needed, we conducted a probabilistic Monte Carlo simulation. Amitriptyline was the cheapest strategy, followed by carbamazepine, and both were equally beneficial. Gabapentin was the most expensive as well as the least beneficial. A multivariable probabilistic simulation produced similar results to the base-case scenario. In summary, amitriptyline and carbamazepine are more cost-effective than tramadol and gabapentin and should be considered as first-line treatment for neuropathic pain in patients free of renal or cardiovascular disease. Perspective Prescription practices should be based on the best available evidence, which includes the evaluation of the medication’s cost-effectiveness. This does not mean that the cheapest or the most expensive, but rather the most cost-effective medication should be chosen—the one whose benefits are worth the harms and costs. We report a cost-effectiveness evaluation of treatments for neuropathic pain.

Trends in healthcare payment.

1. Kathy Hansen 2. Don Lavanty ASCLS and other laboratory groups are alert to trends in Medicare payment, often the largest source of payment for a laboratory or a hospital. Developments in Medicare payment policy, such as competitive bidding, freezes to the Medicare Outpatient Laboratory fee schedule, threats of instituting a co-pay for Medicare beneficiaries, and others, have been the focus of advocacy efforts at the Legislative Symposium and in other campaigns. Legislators, businesses, and the public remain concerned about the rising cost of healthcare and the growing number of uninsured citizens in the United States. Many proposals have been made to control the rate of increase in healthcare costs. Laboratorians often feel that the laboratory is unfairly singled out for more than a fair or proportionate share of freezes or cuts in reimbursement. Concern from Congress about Medicare spending on Part B (outpatient) laboratory services stems from a significant increase in total dollars spent for laboratory services, despite the fact that the individual fees for tests have been frozen in 11 of the last 15 years. In the years 1991 and 1998, Medicare spending for laboratory services was $3.6 billion. There was a slight increase to $4.3 billion in 1993 and 1994, then a gradual decrease back to $3.6 billion in 1998. Since 1998, however, there has been an increasingly steep rise in total spending for laboratory services, averaging 8.8% annually, to $6.0 billion in 2004, the latest year for which data is available. (Data from the 2005 Medicare Trustees Report) Despite this growth, laboratory…

Cost of managing complications resulting from type 2 diabetes mellitus in Canada.

BackgroundDecision makers need to have Canadian-specific cost information in order to develop an accurate picture of diabetes management. The objective of this study is to estimate direct medical costs of managing complications of diabetes. Complication costs were estimated by applying unit costs to typical resource use profiles. For each complication, the event costs refer to those associated with the acute episode and subsequent care in the first year. State costs are the annual costs of continued management. Data were obtained from many Canadian sources, including the Ontario Case Cost Project, physician and laboratory fee schedules, formularies, reports, and literature. All costs are expressed in 2000 Canadian dollars.ResultsMajor events (e.g., acute myocardial infarction: $18,635 event cost; $1,193 state cost), generate a greater financial burden than early stage complications (e.g., microalbuminuria: $62 event cost; $10 state cost). Yet, complications that are initially relatively low in cost (e.g., microalbuminuria) can progress to more costly advanced stages (e.g., end-stage renal disease, $63,045 state cost).ConclusionsMacrovascular and microvascular complication costs should be included in any economic analysis of diabetes. This paper provides Canadian-based cost information needed to inform critical decisions about spending limited health care dollars on emerging new therapies and public health initiatives.