Medicare Clinical Laboratories Competitive Bidding Demonstration (CRS Report for Congress)
| Release Date |
Revised May 2, 2008 |
| Report Number |
RS22769 |
| Report Type |
Report |
| Authors |
Barbara English, Knowledge Services Group |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
Medicare pays for clinical laboratory services based on a fee schedule originallyestablished in 1984. Section 302(b) of The Medicare Prescription Drug, Improvement,and Modernization Act, P.L. 108-173, mandated the implementation of the MedicareClinical Laboratory Competitive Bidding Demonstration to explore whether qualitylaboratory services offered through competitive bidding could be provided at pricesbelow current Medicare rates. Opponents of competitive bidding had asked the Centersfor Medicare and Medicaid Services (CMS) to postpone the demonstration, citingproblems such as its complexity and its effect on small businesses. Their concern wasexpressed during an open forum sponsored by CMS, and as a result, CMS made somechanges to the proposal. The President's FY2008 Budget estimated that payments toclinical laboratories would decrease, saving $110 million in FY2008 and $2.38 billionfrom FY2008 through FY2012 if competitive bidding replaced the fee schedule. OnApril 28, 2008, a U.S. District Court granted an injunction blocking implementation ofthe first demonstration project scheduled to take place in the San Diego area. Plaintiffsin the action were local area laboratories that alleged the demonstration project, asplanned, would result in substantial economic harm. Legislation has been introducedin the 110th Congress that would eliminate the competitive bidding project.
