Competitive bidding provokes controversy

March 1, 2003
By Carren BerschCompetitive bidding provokes controversyBudgets are at the forefront as healthcare industry advocates face this years Congressional agenda, which reflects Republican healthcare reforms. Although Senate Majority Leader Bill Frist (R-TN) may have an understanding of the issues confronting both providers and patients because of his own medical background, his push to revise government programs juxtaposed against the Bush Administrations goal to institute an economic stimulus package could mean another year of struggle for laboratory groups. Congressional support of competitive bidding as a cost-saving solution has been met with opposition from a number of healthcare organizations, which will be affected in the near future. Durable medical equipment (DME) and POS (prosthetics, orthotics and supplies) localized competitive bidding demonstrations in Florida and Texas, opened the gate for arguments against a national DME plan, among them that Medicare beneficiaries will lose access to services and their choice of suppliers. The American Association for Home Health Care points out that competitive bidding cannot be a quick fix for perceived structural problems in the Medicare program and cites the demos as having several structural flaws. According to Mark DeHarde, The O&P Edge, No patient satisfaction or clinical outcome measures are part of the definition for a successful demonstration project. However, they should be.One proponent of the competitive bidding model is Thomas Scully, administrator of the Centers for Medicare and Medicaid Services, who has been quoted as saying the current Medicare program is an archaic, screwed-up insurance model. He has publicly defended the competitive bidding model: My goal is to make Medicare a balanced, reasonable payer, where people can make fair, decent boring margins. It shouldnt be a cash cow.Scullys goal to have Medicare providers compete for customers and implement annual fee increases according to a quality rating may not affect clinical laboratories in the immediate term. Labs impact on Medicare is slight in comparison to other sectors. He recently told the American Clinical Laboratory Association that publicly rating their quality is not imminent.The Institute of Medicine (IOM) and the Medicare Payment Advisory Commission (MediPAC) question the feasibility of competitive bidding involving clinical labs, according to the South Central Association for Clinical Microbiology.Noting that lab services and their associated marketplace are different from DMEs because lab testing is a service, requiring technical expertise and analytical work by the laboratorian who plates, reads, and analyzes test results … used to determine whether or not a patient has an infectious or chronic disease, SCACM believes that competitive bidding poses serious threats to beneficiaries access to quality laboratory testing. Changes in policies, practices and payment levels of Medicare the largest single purchaser of clinical laboratory services have a direct effect on the overall clinical laboratory marketplace. Any modifications based on competitive bidding, claim these groups, could have a widespread, unintended and irreversible adverse impact on the nations system of clinical laboratories. While competitive bidding may be the panacea for certain products and services covered by Medicare, its entry into the laboratory arena may be fraught with grievances as clinical labs attempt to thwart its application. Lipid testing and NCPThe National Coverage Policies for 23 clinical laboratory tests were recently published in the Federal Register. Among those affected is lipid testing. A brief summary of the new policies, and their impact on lipid testing reimbursement, is available on the Equal Diagnostics website
(, along with a link to the full details in the Federal Register.
, managing editor of MLO, formerly specialized in legislative issues for a major Washington, D.C. pharmaceutical association.
As has been the history of MLOs Washington Report, this space will be
devoted in 2003 to keeping readers abreast of ongoing issues and new legislation affecting the clinical laboratory and its professional managers and technicians. If there is a particular legislative question or a legislative topic of special interest to your organization, please e-mail:
[email protected].
March 2003: Vol. 35, No. 3
© 2003 Nelson Publishing, Inc. All rights reserved.