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R. Lewis Dark:
Medicare's Lab Competitive Bidding Demonstration
EVERYONE SHOULD MARK JANUARY 1, 2007 ON THEIR CALENDARS. On that
date, just 14 weeks from now, Medicare administrators intend to
announce which laboratory bidders will be allowed to provide lab testing
services in the laboratory competitive bidding demonstration that was
mandated by the 2003 Medicare bill.
Never mind that officials at the Centers for Medicare and Medicaid
Services (CMS) have yet to identify which region of the country will be
involved in this demonstration project. Nor have they released information
on how laboratories must respond, how "winning" bids will be
selected, how laboratories exempted in the 2003 law will participate, and
what type of appeals procedure will be available to non-winning laboratories
that currently provide testing services in the region selected for the
demonstration project.
Against this information vacuum, it seems that the next 14 weeks will be
awfully busy-not just for some folks at CMS tasked with implementing the
laboratory competitive bidding demonstration project, but also for the laboratories
that find it is their service area which will be the demonstration site.
After investigating company business practices, reading company
documents, and interviewing a host of laboratory personnel, the U.S.
Attorney's Office became convinced that at least three executives of
UroCor had committed actions that violated the Medicare anti-kickback
statute and securities laws. In June 2004, criminal indictments were filed
against these individuals. Following a three-week jury trial in June 2006,
they were acquitted on all counts.
Oh, and there is something else you should know. Despite all the
CMS fanfare and hoopla in the past couple of years that a panel of laboratory
industry professionals will be meeting regularly to provide advice
and input to CMS and its contractor on the best way to design and manage
this demonstration project, not much has happened on that front.
There's been no recent meetings of the lab advisory panel and, by all
appearances, CMS and its contractors will go blithely down their own
path in designing and implementing the Medicare laboratory competitive
bidding demonstration.
Long-time clients and regular readers of THE DARK REPORT probably
know how I feel about this situation. When it comes to laboratory contracting,
federal and state healthcare adminstrators have an abysmal record. In
fact, these pages have chronicled many of their lab contracting foibles in
recent years. So I am not optimistic that the final design and execution of
this laboratory competitive bidding demonstration will prove satisfactory to
any stakeholder-and that certainly is likely to include the Medicare patients
in whatever region is selected for the demonstration.
Lab Competitive Bidding
Project Slated For Jan. 1
Medicare officials have yet to disclose
which regions and zip codes will be involved
In a rather quiet fashion, Medicare officials
have disclosed timetable dates for implementing the
laboratory competitive bidding demonstration mandated by
the 2003 Medicare spending bill. Medicare intends to
announce the names of participating laboratories by
January 1, 2007. It also wants to implement demonstration
pricing in the target regions by April 1, 2007.
Siemens' IVD Purchases
Are a Major Investment
By acquiring DPC and Bayer Diagnostics,
Siemens has triggered much speculation
CEO SUMMARY: In the space of just nine weeks, Siemens
AG purchased Diagnostic Products Corp. (DPC) and Bayer
Diagnostics. Siemens paid $1.86 billion and $5.31 billion,
respectively, for the two in vitro diagnostics (IVD) companies.
Once it closes the acquisition of Bayer Diagnostics, Siemens
will have the third largest IVD business in the world. Experts
predict more consolidation in the IVD industry.
IVD Executive Discusses
Three Developing Trends
Published interview describes existing flaws
in analyzers, automation, and software
CEO SUMMARY: In a refreshingly candid assessment of
current technology published in IVD Technology magazine,
one lab industry executive describes both the successes
and the failings of analyzers, automation, and software. He
offers three trends he expects will address the deficiencies
of the current generation of products. Help appears to be on
the way, even if it will take a few years to reach the market.
Pathologist-Entrepreneurs
Offer New Lab Automation
DEVELOPED AT DETROIT MEDICAL CENTER
CEO SUMMARY: Since October 2003, the core laboratory
of Detroit Medical Center University
Laboratories has operated with a home-grown total
laboratory automation (TLA) system. The 100-foot
automated line currently connects to 11 instruments
and the hardware cost only $200,000 to build
and install. Not only did it allow 20 medical technologists
to shift to other positions within the laboratory,
but this automated line has operated 24/7 for
almost three years without a major stoppage.
Supremes Rule Against
LabCorp On Test Patent
One barrister believes there's good news
in the dissenting opinion of three justices
CEO SUMMARY: It's a bad news/good news outcome for
pathologists and lab administrators hoping for clearer guidance
on patents granted for DNA and other diagnostic technology.
The bad news is that LabCorp gets no relief from
lower court rulings that it infringed patents on homocysteine
testing. The good news is that three justices wanted
to rule in this case, and likely in favor of LabCorp.
INTELLIGENCE: Late & Latent
LUNG CANCER TEST
PREDICTS LIKELIHOOD
OF RECURRENCE
MORE ON: TC/PC TREND
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