| R. Lewis Dark:
Is CMS Playing 'Bait and Switch' in San Diego?
ATTEMPTING TO WRITE THE ASSESSMENT of the Medicare Clinical Lab Services
Competitive Demonstration Project that you will read in this issue earned a
unique distinction: since our founding in 1995, this has been the single most difficult
story we have ever tried to explain to our clients and regular readers.
At the same time, it is likely to be one of the most important stories in the laboratory
medicine profession in the past two decades. The Centers for Medicare
& Medicaid Services (CMS) is now just six weeks away from collecting bids from
labs hoping to preserve their access to Medicare fee-for-service patients in the
San Diego-Carlsbad-San Marcos MSA (metropolitan services area).
You’ve probably read lots of news items about this competitive bidding
demonstration. But what you haven’t read is a serious, detailed critique about its
design, its operation, and the ways it is likely to change how laboratories serve
Medicare patients in the San Diego MSA. That’s because it is a complex, subjective,
and opaque scheme. CMS and RTI have delivered a demonstration project
that lacks clear, objective standards. But that’s only part of the story.
CMS is preparing to conduct a multi-step bidding auction. After opening the
bids and evaluating the applications (using non-price criteria that are not objectively
defined), it will begin a second round of bidding and negotiating with laboratories
it has selected. Thus, labs will find themselves in an open-ended
selection process. Not only do they not understand the criteria upon submitting
their bids, but they don’t know the precise terms and conditions of the provider
contract CMS will require them to sign should they be selected.
Why all this obfuscation and not a transparent, objective bidding process?
Smarter minds than I are dissecting the CMS/RTI scheme to implement the San
Diego MSA pilot site in an attempt to answer that question. Many of us have
come to a similar conclusion: CMS officials involved in designing the pilot
demonstration had another agenda beyond meeting the Congressional mandate
of finding a lower price while maintaining beneficiary access and service. Rather,
their motive seems to use the demonstration as a way to extract bids from laboratories facing total loss of access to Medicare beneficiaries. CMS will then use
these bids as a prototype for a new national Part B laboratory test fee schedule.
If this proves to be true, then the laboratory industry is likely to feel like it was
the victim of a CMS “bait and switch” tactic.
San Diego Bid Demo Pilot Is Industry Turning Point
Forget the San Diego MSA demonstration pilot,
these lab bids may be used to set national prices
CEO SUMMARY: In just six weeks, laboratories serving
Medicare patients in the San Diego-Carlsbad-San Marcos MSA
(metropolitan statistical area) will submit their bids to the Centers for
Medicare & Medicaid Services (CMS). They may think they are bidding
for access to patients in the San Diego MSA for the three-year
duration of the demonstration pilot. But comments by a CMS official
at the December bidders’ meeting indicates that CMS may want to
use these bids as the prototype for new national Part B pricing.
Analyzing Lab Bid Demo
To Predict Its Outcome
San Diego-Carlsbad-San Marcos MSA
is about to become a Medicare guinea pig
CEO SUMMARY:After two decades of study and preparation,
the Centers for Medicare & Medicaid Services (CMS) is pushing
the laboratory profession toward the first pilot site in the Congressionally-
mandated Medicare Clinical Laboratory Services
Competi tive Demonstration Project. Designed to drive down the
price Medicare pays for laboratory tests, the plan CMS described
at the December 5 bidders’ conference is likely to disappoint ev -
ery one—from patients and doctors to Medicare itself.
Anticipate Access/Service
Decline for S.D. Patients
Three levels of access to lab testing services
not addressed in design of the lab bidding demo
CEO SUMMARY: In its primary push to use the Medicare
Laboratory Competitive Bidding Demonstration Project as a tool
to drive down the price Medicare pays for Part B laboratory testing
services, CMS is giving secondary attention to patients’
needs. In particular, CMS seems to place little value on the multiyear
relationship and loyalty many elderly patients have with
their existing laboratories, nor on the professional relationship
the patients’ doctors have with their laboratory providers.
Local San Diego Lab Fights
Bias In CMS Bid Demo
San Diego’s only local lab illustrates why
CMS/RTI’s scheme intentionally excludes small labs
CEO SUMMARY: Meet Internist Laboratory of Oceanside,
California. For 18 years, its owners, Gary and Christine Stevens,
have provided a high level of laboratory testing services to
office-based physicians in Northern San Diego County. Now
Internist Laboratory is the perfect poster child for all the flaws
and bias built into the Medicare Laboratory Competitive Bidding
Demo. If denied access to serving Medicare beneficiaries for
three years, it will face a financial crisis with no solution.
Numerous Issues Identified
With Bid Demo’s 303 Tests
National expert in coding and billing predicts
some confusion during the pilot demonstration
CEO SUMMARY: One experienced expert in billing and coding
was surprised at the list of 303 tests to be included in the
Medicare Laboratory Competitive Bidding Demonstration Project.
He notes that the list of 303 tests includes a number of codes and
descriptions that are not consistent with CPT codes used by laboratories
to prepare and submit claims to Medicare. This may
cause some confusion for labs that plan to bid for the San Diego
demonstration pilot site.
Three Strikes Against CMS
Before Bid Demo Begins
CMS fails to engage voices of patients,
of physicians, of lab profession in demo’s design
CEO SUMMARY: There’s a touch of irony in the fact that the
Medicare program is a national leader in encouraging hospitals,
physicians, and other providers to pay greater attention to the
voice of patients. Yet within the Centers for Medicare & Medicaid
Services (CMS), officials tasked with developing the laboratory
competitive demonstration project seem to have ignored the
voices of Medicare beneficiaries, the physicians who serve
them, as well as the laboratory medicine profession.
Using a 1997 Bid Model
In a 2007 Health Market
San Diego Demo Plan was created in 1997;
Doesn’t reflect current lab marketplace realities
CEO SUMMARY: It’s been a long path from concept to implementation
for a competitive bidding demonstration involving clinical
lab services. It was in the mid-1980s when CMS commenced
work on designing such a demonstration. In the 1990s, RTI
International continued development of the concept and, in 1998, it
published a paper on the plan it had developed for the laboratory
competitive bidding demonstration project. This 1998 plan forms
the basis for the upcoming 2008 demo pilot in the San Diego MSA.
Call to Action Is Needed
For Lab Test Profession
Passive cooperation failed to engage CMS/RTI
during development of competitive bidding demo
CEO SUMMARY: Is a laboratory test simply a commodity,
like wheat or coal? Or is it a complex scientific service of unique
value that delivers personalized results and clinical knowledge
on behalf of millions of patients every day in the United States?
The fundamental assumption of competitive bidding for clinical
laboratory testing is that one lab’s test result is equal to another.
It is time for the laboratory medicine profession to come
together and tell its story to the public and elected officials.
Speculating On How Labs
Might Respond to Demo
Consequences of the bidding demonstration
may swiftly alter national Medicare Part B prices
CEO SUMMARY: Statements and actions by CMS officials
responsible for the laboratory competitive bidding demonstration
project reveal the likelihood that they are using it as a Trojan
Horse. While talking about implementation of a three-year
demonstration project in the San Diego MSA, CMS dropped hints
that it will use the bids submitted on February 15 as a prototype
for a new national Medicare Part B schedule for implementation
as early as next fall, at the start of fiscal year 2009.
INTELLIGENCE: Late & Latent
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