On Mar. 23, 2010 President Obama signed the healthcare reform bill into law. American consumers and providers weighed in with very spirited opinions as health care reform was debated and waited with bated breath for the final result.
When the bill finally passed a cantankerous Congress, it seemed no constituent was totally happy with the final bill. Some complained it had not gone far enough in providing universal coverage, some wanted a single payer, political opponents called it a government takeover, and still others predicted it would ruin small businesses.
The clinical laboratory industry, like other healthcare providers, worried that reimbursement would be cut as Medicare has traditionally reduced payments almost annually. It had long been common knowledge that an additional 33 million Americans would be insured under the plan, but no one was sure how many would access the healthcare system and what the actual total payment would be. Many in the industry predicted steep copays for patients seeking laboratory services.
However at the end of the day, the Patient Protection and Affordable Care Act did not contain the massive tax increases and deep cuts to laboratory reimbursement that everyone feared. In fact there is reason for cautious optimism.
Laboratory testing is included in the basic healthcare coverage. With operational efficiencies, any cuts to the laboratory fee schedule might be offset by the expected increase in testing from more patients accessing the system and more testing for covered preventive care.
Recently, Glen McDaniel, writer, clinical lab scientist and healthcare consultant answered questions submitted by medical laboratorians regarding healthcare reform. The answers are based on facts, but some answers are his personal interpretation, based on his analysis of the information available.
Q: What is the goal of Obamacare really?
McDaniel: Obamacare, more correctly called the Patient Protection and Affordable Care Act (PPACA), was enacted by the 111th Congress and signed into law by President Obama. Together with the Healthcare and Education Reconciliation Act, this represents the most significant regulatory overhaul of the healthcare system since the passage of Medicare and Medicaid in 1965.
The two main goals are to reduce the number of uninsured Americans and to reduce the overall cost of care. This will be accomplished through a series of mandates, subsidies and tax credits. It is hoped that there will be almost-universal coverage by adopting a carrot and stick approach.
Other goals include:
Improving clinical outcomes and streamlining delivery of care
A requirement for health insurance companies to take all comers, regardless of preexisting conditions, age or gender
Concentration on prevention and coverage of certain associated items (e.g. contraception) and procedures
Q: Will Obamacare be repealed like the Republicans want?
McDaniel: Earlier there was some question of constitutionality of the law based on the mandate to buy a service. On June 28, 2012, the Supreme Court in a 5-4 decision ruled that the main aspects of the law are in fact constitutional. The case is cited as National Federation of Independent Business v. Sebelius.
Presidential candidate Romney had threatened to repeal the law and could have, if elected, used certain presidential powers to limit aspects of the law. He could also have directed CMS on how to implement the law, including delaying or even ignoring parts of the law. At the end of the day it would take Congress (not the President) to repeal a law that has been declared constitutional.
Q: What are the main timelines for healthcare reform kicking in?
McDaniel: That is one of the most difficult questions to answer. There are a lot of details, some contingent on others. But here is a quick summary of timelines of interest to the clinical laboratory. Bear in mind this has been taken from searching the literature (not the actual law itself) and is not all-inclusive.
- Patient-Centered Outcomes Research Institute (for comparative effectiveness research) launches.
- Annual productivity adjustment to clinical lab CPI update takes effect.
- A 1.75 percent reduction in clinical lab CPI update is implemented.
- A 2-year demonstration begins to allow independent clinical labs and hospitals to bill Medicare directly for certain molecular pathology tests that would normally fall within the 14-day rule.
- A 2.3 percent excise tax on medical devices takes effect.
- National Health Insurance Exchange starts to assist individuals who want to purchase private insurance plans.
- Independent Payment Advisory Board is formed to recommend Medicare spending reductions.
Q: Will laboratory reimbursement decrease?
McDaniel: Earlier this year, I interviewed Dr Cathy Otto, then President of the American Society for Clinical Laboratory Science (ASCLS). I will quote her verbatim since she provides the most cogent analysis that I have seen.
"Although laboratory testing comprises only 1.6% of all healthcare spending, new models will be introduced and implemented for reimbursing laboratories for their services, in order to cut costs to the Medicare and Medicaid programs. Although in the past the laboratory professional community has been able to effectively lobby to remove a co-payment option for patients who receive laboratory testing under Medicare Part B, there is a high probability that this type of cost-sharing will be instituted to cut costs to the Medicare program.
Other types of reimbursement mechanisms to providers (including medical laboratories) and cost-sharing protocols will continue to be identified and implemented in order to address the increase in utilization of the Medicare insurance program."
Q: What are the good and bad for the clinical laboratory?
McDaniel: This is a very complex law. Some details are stated explicitly, while others have to be extrapolated. The increased coverage, recommended testing for screening and preventive purposes, together with an aging population should all mean greater laboratory utilization and increased revenue.
As Dr Otto points out, reimbursement might not increase exponentially with increased testing since the government is continually trying to reduce payment for Medicare; a major payer. Other payers often mimic Medicare, increasing or decreasing payment in tandem. So Medicare payment is a bellwether indicator of total reimbursement.
The encouragement of effectiveness research should mean increased laboratory testing as well. A significant part of any test of effectiveness of certain protocols will be the use of periodic laboratory testing.
Another consideration is that CMS has the mandate to develop regulations to implement aspects of the PPACA. Will laboratories find measures onerous, expensive and difficult to comply with? No one knows at this point.
The aging population will produce more patients seeking laboratory services at the same time laboratory professionals will be retiring. So a significant personnel shortage could be a by-product of the twin effects of aging and implementation of PPACA.
Q: How can laboratorians prepare for the unknown?
McDaniel: Clinical laboratorians have always dealt with change as a matter of course. While it is difficult to know all the relevant details and to predict the future, it does help to educate yourself about the law rather than depending on the interpretation of politicians and pundits.
The laboratory community must prepare for increased volume of testing, while each individual should reassess career goals since professional roles might change as care delivery models evolve.
There will be definitely be opportunities for more involvement in decision making. Shortage of personnel will mean laboratorians themselves must step up to the plate and decide how the profession (not administration or physicians) is going to ensure testing is performed by qualified personnel. Even with increased point of care testing, our duty to the profession and to patients will mean we cannot abdicate our responsibilities or simply acquiesce to encroachment on our scope of practice by unqualified individuals. In my mind, "unqualified" does not simply mean uneducated, it also means inappropriately educated. Medical laboratory science has its own unique body of knowledge just like medicine or pharmacy or any other profession.
These might appear to be frightening, unpredictable times. But the next few years can also be terribly exciting and full of opportunities. It will be your choice.
Glen McDaniel is a healthcare executive, clinical lab scientist, speaker and freelance writer. His interests include mediation, leadership, change and ethics. He can be reached at email@example.com.