Forecasts for 2009

Preserving 2008 gains

The clinical laboratory coalition achieved major
successes in 2008, including halting implementation of CMS'
competitive-bidding demonstration project in San Diego; persuading Congress
to revoke overall authorization for competitive bidding; and preserving 90%
of the 2009 CPI increase to the Part B fee schedule, resulting in a 4.5%
increase on Jan. 1. Congress delayed a scheduled 10.6% cut in Medicare's
physician payments until Dec. 31, 2009, a little over 12 months away.
Therefore, in 2009, this will again become a major focus, as the projected
physician pay cut will balloon to nearly 20%. Laboratories, along with other
healthcare providers, will be targeted for reductions to pay for delaying or
eliminating Medicare's physician pay cuts. Preserving the gains made in 2008
will, therefore, be a high priority for clinical laboratories.

New policy challenges

With a decisive presidential win and enhanced
majorities in both the House and Senate, President-elect Barack Obama
and congressional Democrats come out of the gate in 2009 in the midst of
the worst economic recession in decades but under continuing public
pressure to fulfill their campaign pledge to reform the U.S. healthcare
system. The key question for clinical lab executives is how this
challenging political and economic environment will affect their
interests in the coming year. Though precise policy prescriptions for
the incoming Administration and Congress have yet to be officially
unveiled, several consequential trends for labs are likely to emerge.
First, record national debt and deficits will likely force politicians
to either cut federal spending or, at a minimum, to offset paying for
any new programs through other budget reductions. This puts Medicare —
with its skyrocketing costs — squarely under the political gun,
particularly as billions of extra dollars are needed to fix the
physician fee schedule to head off major payment cuts for pathologists
as well as doctors, starting in 2010. The Obama team and leading
Democrats are already on record as favoring cutting Medicare
managed-care payments, but other provider cuts may also be on the table;
and this is where labs could face new initiatives to reduce their fees
after next year. Another emerging change relates to growing governmental
involvement to fix the country's ailing financial system. This portends
a more activist, interventionist role in oversight for all federal
agencies, including new requirements for genetic testing, tougher
enforcement under the CLIA lab program, and more scrutiny by the FDA in
regulating ASRs and laboratory-developed tests. In short, 2009 will
signify the start of a new legislative and regulatory era for lab
interests that will once again test the industry's ability and resolve
to successfully work together to meet the many new policy challenges
that lie ahead in the Nation's Capitol head-on.

Health info exchange progress

Public and private sectors previously operating as a
collaborative Department of Health and Human Services advisory body,
American Health Information Community or AHIC, have migrated to a
non-profit public organization with the end of the Bush administration.
The successor to the collaborative has been referred to as AHIC 2.0 or
A2. Federal efforts are joined by state initiates across 42 states and
territories studying local and intrastate security and privacy
legislations which may have stymied the ability to share patient-elected
information across boundaries. Nine prototypes across the United States
are demonstrating core capabilities of health information exchange this
month in Washington, DC. True interoperability requires a standardized
message within and outside of the four walls of the institution. The
realization of health information exchange serving a private citizen's
healthcare needs, regardless of location, and the health of the
population will come with continued collaboration and increased
education to build trust.