Congress hears from laboratory groups on legislation; hearing held on new lab codes.

A coalition of laboratory organizations is moving full steam ahead to win passage of a key piece of legislation -- the Medicare Patient Access to Preventive and Diagnostic Tests Act. This column alerted readers to the bill (HR 1798) when it was introduced in the spring.

The coalition is made up of a number of laboratory trade organizations, including the American Association of Bioanalysts (AAB), American Clinical Laboratory Association, American Association for Clinical Chemistry, American Association for Clinical Laboratory Science, and the College of American Pathologists.

The bill, introduced by Rep. Jennifer Dunn (R-WA) and Sen. Orrin G. Hatch (R-UT), would reduce the administrative complexity and ambiguity of Medicare rules related to clinical lab benefits and foster more efficient and appropriate use of laboratory tests. In addition, it would create a more understandable system for establishing payments for such services.

Further, the legislation would modernize payments for laboratory services by establishing a national Medicare fee schedule for laboratory test services.

Representatives of laboratory trade organizations say payment changes are long overdue. The legislation builds on many of the key recommendations recently proposed by an Institute of Medicine (IOM) report on reforming Medicare payment policies. The report pointed out that the "current Medicare payment policy for outpatient clinical laboratory services seems not only outdated, but also irrational."

A committee of experts in laboratory science, medicine, economics, and health policy developed the IOM report. They analyzed current clinical laboratory services and payment policies and made 12 recommendations for improvements through alternative approaches. Some of the changes can be implemented through regulation, but others require legislation.

To help win support for the bill, the lab coalition held a Capitol Hill day on Sept. 11. Laboratory industry representatives from across the county visited lawmakers to emphasize the importance of enacting the bill into law.

While proponents intend to do all they can to gain the necessary support, they face an uphill battle.

Winning passage will be a difficult challenge because of the budgetary climate. "The whole atmosphere has changed from a year ago when there were budget surpluses," says Mark Birenbaum, Ph.D., administrator for the AAB in St. Louis. Nevertheless, lab coalition members intend to push ahead and do all they can to win congressional backing.

More laboratory payment issues Meanwhile, officials with the Centers for Medicare & Medicaid Services (CMS) recently held a public meeting with representatives from a number of clinical laboratory organizations. The purpose was to hear what the industry had to say about appropriate Medicare payment rates for specific CPT codes for new clinical laboratory tests that will be paid under the 2002 Medicare lab fee schedule.

Holding a public hearing on this particular issue is one of the ways CMS is complying with requirements of the Benefits Improvement & Protection Act (BIPA). Under that law, the federal government must take steps to create a more open and rational process for determining lab coding and payment.

BIPA also established the national limitation amount at 100 percent of the median of all local fee schedule amounts for new lab tests that the Secretary of the Health and Human Services Department finds have had no previously established limitation amount.

While CMS heard from a number of laboratory organizations, agency officials said very little. "It was a listening session," says Joanne Glisson, vice president of governmental affairs for the American Clinical Laboratory Association (ACLA) in Washington, DC.

The laboratory representatives in attendance were generally in agreement over payment methods for most of the new codes for chemistry, immunology, and microbiology tests.

ACLA, the College of American Pathologists, and the Clinical Management Association supported "gap filling" for the following procedures: oncoprotein; occult blood, by fecal hemoglobin determination; and Inhibin A. Gap filling is used when there is no comparable, existing test code already in use.

The other method used is called "crosswalking." CMS uses crosswalking when it finds a new test is similar to an existing test, current multiple test codes, or a portion of an existing test code. Codes that are gap filled usually result in better payments than those that are crosswalked.

The jury is still out on whether the hearing was beneficial for the industry. CMS intends to complete lab payment rates for the new 2002 lab tests codes sometime this fall.

Joan Szabo is a Washington, DC, freelance writer specializing in healthcare issues. She has been writing the "Washington Report" column for MLO for the past four years.