Measure Repeals Competitive Bidding, Lifts Freeze on Clinical Laboratory Fee Schedule, Extends TC Grandfathering Provisions

On July 9th, the Senate approved an ASCP-supported Medicare fix, reversing the pending 10.6 percent cut in the physician fee schedule, repealing the clinical laboratory competitive bidding demonstration project, lifting the freeze on the clinical laboratory fee schedule, and extending the technical component grandfather provisions. The Senate approved the measure on a vote of 69 to 30, not more than two weeks after a prior attempt by the Senate to pass the bill failed by one vote.

The vote was marked by the emotional arrival of Massachusetts Senator Edward M. Kennedy, who returned to the Senate for the first time since his May brain surgery.

Passage of HR 6331, also known as "Medicare Improvements for Patients and Providers Act of 2008, is a huge victory for ASCP and its members. However, the bill's passage sets up a showdown with President Bush, who has threatened to veto the measure. Consequently, ASCP is urging its members and our colleagues in the laboratory community to contact the White House and urge the President to sign the Medicare Bill.

In a message to Congress outlining his opposition to the Medicare bill, President Bush specifically mentioned the ASCP-supported repeal of the competitive bidding program as among his reasons for opposing the bill. The Administration's support of competitive bidding is based on a desire to cut reimbursement costs for Medicare laboratory services.

ASCP has been working hard on a number of the wins found in the Medicare bill. As part of ASCP's efforts, the Society issued numerous action alerts resulting in more than 15,000 letters being sent to Congress urging them to enact a number of the elements of the bill (e.g., repeal of the clinical laboratory demonstration project, lift the freeze on the clinical laboratory fee schedule, fix the physician fee schedule, and extend the technical component grandfathering provisions).

HR 6331 provides an 18-month Medicare physician payment fix. It eliminates a planned 10.6 percent cut in the Medicare physician fee schedule (the cut was expected to go into effect on July 1, but the Administration has provided a 10-day delay) scheduled for 2008 and also reverses an estimated cut of 5 percent that is anticipated to occur in 2009. These cuts to the physician fee schedule are caused by the flawed sustainable growth rate, which ASCP has repeatedly urged Congress to reform. In place of these cuts HR 6331 provides a positive 0.5 percent update for 2008 and a 1.1 percent update for 2009.

The measure also extends, until December 31, 2009, the technical component grandfathering provision for independent laboratories, thus enabling these laboratories to continue receiving Medicare reimbursement for the technical component (TC) of pathology services provided to hospital inpatients and outpatients.

Now that the bill has been approved by the Senate, the bill will soon be sent to President Bush to be signed into law. If President Bush vetoes the legislation, as he has threatened to do, it would force CMS to cut the physician fee schedule by 10.6 percent for the remainder of 2008.

ASCP urges its members to use the ASCP e-Advocacy Center to send President Bush a letter to sign the Medicare Bill.