U.S. Legislative/Regulatory News

1. San Diego Laboratories File Response to Denied TRO

On February 28, 2008, Sharp HealthCare, Scripps Health, and Internist Laboratory of Oceanside filed a response to the February 14, 2008 order denying a temporary restraining order (TRO) to block implementation of the competitive bidding demonstration project in the San Diego-San Marcos-Carlsbad Metropolitan Statistical Area (MSA). The three laboratories are plaintiffs in a lawsuit filed against U.S. Department of Health and Human Services (HHS) Secretary Michael Leavitt on January 29, 2008. The Clinical Laboratory Coalition (CLC), of which CLMA is an active member, fully supports the lawsuit.

The Centers for Medicare and Medicaid Services (CMS), as part of the Medicare Prescription Drug, Improvement and Modernization Act of 2003, chose the San Diego area as the first of two demonstration project sites to test competitive bidding for the procurement of clinical laboratory services.  The agency has accepted bids on laboratory services and will select only a very limited number of laboratories to perform tests that will be reimbursed under Medicare Part B.  Those laboratories that don’t win the bid cannot bill for reimbursement of Medicare clinical laboratory services for the three-year duration of the project.  Rather than creating competition, it will result in fewer laboratories, less competition and the government in essence picking winners and losers. 

Internist, Sharp HealthCare and Scripps Healthcare are fighting to be able to continue to serve San Diego residents.   These laboratories will either be forced to shut down all together or close laboratory outreach services if they aren’t selected as winning bidders. 

The court denied the TRO based on legal issues filed at the last minute by HHS. The government argued that stopping the demonstration project was premature, because no winners or losers had yet been chosen, thus laboratories in the San Diego area have yet to be harmed. They further questioned whether the federal court has jurisdiction, and argued that the court may in fact be precluded from reviewing the legality of the project due to purported jurisdictional and other technical legal impediments that are unique to the Medicare Program. The February 28^th filing by the plaintiffs disputes many of the government’s arguments.

In the meantime, CMS is moving forward with the demonstration project in San Diego. Bids were due on February 15, 2008, CMS will announce bid winners and losers on April 11, 2008, and implementation will commence on July 1, 2008.

The next legal step will be to ask the court to issue a preliminary injunction (PI) prior to April 11, 2008 when the bid winners are announced.

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2. Competitive Bidding Action Alert Update: Repeal Legislation Still Alive in 2008!

Support for repeal of competitive bidding among key lawmakers continues to grow, thanks to the phenomenal grassroots response from CLMA members.  CLMA sincerely thanks all members who have contacted Congress regarding competitive bidding.  Rest assured that these efforts are not in vain and repeal for competitive bidding is still alive for 2008!

Congress must revisit Medicare legislation mid-2008 when the six-month extensions included in the 2007 Medicare bill expire. This presents the opportunity to address provisions left out of the 2007 bill such as repeal of competitive bidding. Currently two repeal bills have been introduced; the “Protecting Access to Clinical Laboratory Services Act of 2007(S 2099)” and the “Community Clinical Laboratory Fairness in Competition Act (HR 3453).” Support for these bills moving forward is absolutely critical so that repeal of competitive bidding can be attached to the earliest possible legislative vehicle in 2008!

On October 2, 2007, CLMA launched a grassroots campaign to gain support for S 2099 and HR 3453, and CLMA members have more than answered the call to action. To date 1108 messages from 554 members have gone to the Senate, and 659 emails have gone to the House asking for co-sponsors for the repeal bills. We have reached 359 Senators and Congressmen combined so far!

These grassroots efforts continue to have an impact. In addition to Rep. Nydia Velazquez (NY), HR 3453 now has 35 co-sponsors. In addition to Senator Ken Salazar (CO), S 2099 now has 7 co-sponsors.  Representative Tim Ryan (OH) and Senator Tim Johnson (SD) have just joined as co-sponsors.

Please contact your Senators and Representative and urge them to co-sponsor legislation to repeal the competitive bidding demonstration project and stop CMS from implementing it.

*To contact your Members of Congress, please use CLMA’s “one-click” advocacy software, CapWiz.  The links below will connect you to action alerts for both S 2099 and HR 3453. A template letter has been provided for each bill. You can customize the letter with your own story. Also, if your Member of Congress is already a co-sponsor of S 2099 or HR 3453, please customize the letter to thank them for their support. Your letter will automatically be emailed to your Members of Congress. The links below represent separate letters to your two Senators and to your Representative. Please click on each link separately in order to contact both the Senate and the House.

House Bill (HR 3453): http://capwiz.com/clma/issues/alert/?alertid=10372476
Senate Bill (S 2099): http://capwiz.com/clma/issues/alert/?alertid=10372386

*Note: Before responding to the call to action above, please check the list of co-sponsors for HR 3453 and S 2099.  For a list of co-sponsors, please visit http://thomas.loc.gov/  and search using HR 3453 and S 2099. If your Senators or Representative are already co-sponsors, please modify the letters in the action alerts to thank them for their support.

Thank you for your support!

Links for Medicare Competitive Bidding Demonstration Project for Clinical Laboratory Services:
Frequently Asked Questions (FAQs):
http://www.cms.hhs.gov/DemoProjectsEvalRpts/downloads/MMA302b_Appendix_A.pdf  .
Final Bidders Package: http://www.cms.hhs.gov/DemoProjectsEvalRpts/downloads/MMA302b_Final_Bidder.pdf

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3. CMS Announces Implementation of New ABN Form

As of March 3, 2008, CMS has replaced both the General Use Advanced Beneficiary Notice (ABN) (CMS-R-131-G) and the Laboratory ABN (CMS-R-131-L) with a new “Advanced Beneficiary Notice of Noncoverage (ABN) (CMS-R-131).” The new form and instructions are posted on the Beneficiary Notice Initiative (BNI) web page at www.cms.hhs.gov\bni.

The ABN is required as written notice to inform Medicare beneficiaries of their liability regarding non-covered services as outlined in Section 1879 of the Social Security Act (SSA).

As required by the Paperwork Reduction Act (PRA) of 1995, the ABN is subject to public comment and re-approval every three years. CMS published a revised ABN form with 60-day comment period in the February 23, 2007 Federal Register, and a notice for additional 30-day comment in the May 25, 2007 Federal Register. The changes reflected in the new ABN form are based on suggestions made during each of these comment periods.

Previously there were two approved versions of the form, the General Use ABN-G (CMS-R-131-G), and a version specifically for laboratory tests; ABN-L (CMS-R-131-L).The new version of the ABN combines the ABN-G and the ABN-L into a single notice, with an identical OMB number.  Although combined, the new notice does permit pre-printing of the laboratory-specific reasons for noncoverage of previously included on the ABN-L: 1) “Medicare does not pay for these tests for your condition”2) “Medicare does not pay for these tests as often as this (denied as too frequent)”3) Medicare does not pay for experimental or research use tests. According to the new instructions, CMS will provide alternate versions of the ABN, including one that illustrates the laboratory-specific use of the notice.

Features of the new ABN include:

• A revised official title, the “Advance Beneficiary Notice of Noncoverage (ABN),” in order to more clearly convey the purpose of the notice;
• Replaces both the existing ABN-G and ABN-L;
•  A mandatory field for cost estimates of the items/services at issue;
•  May also be used for voluntary notifications, in place of the Notice of Exclusion from Medicare Benefits (NEMB) and;
• A new beneficiary option, under which an individual may choose to receive an item/service and pay for it out-of-pocket, rather than submit a claim to Medicare.

The instructions state that the ABN must be verbally reviewed with the beneficiary or his/her representative, and any questions must be answered before the notice is signed. The signature indicates that the beneficiary has received the notice and understands its contents.

CMS is providing a six-month transition. Between March 2, 2008 and September 1, 2008, providers including laboratories may use either the new or old ABN form. As of September 1, 2008, all providers and suppliers must use the new ABN.

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4. CMS RAC Program Identifies Improper Payments in Three States

In a Fiscal Year (FY) 2007 RAC Status Document, CMS is reporting that $371.5 million in improper Medicare payments have been collected from, or repaid to, health care providers in 2007 as part of a three year demonstration project using recovery audit contractors (RACS) in California, Florida and New York. Close to $440 million has been collected since the demonstration began in 2005.

The demonstration program is mandated by Section 306 of the “Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173).”  CMS contracted with RACs to detect improper payments, both overpayments and underpayments, and to correct them by repaying providers who were underpaid and collecting and returning overpayments to the Medicare Trust Fund. The RACs are paid a contingency fee based on the amount of improper payments they correct. The RACS are guided by the same policies and rules used by Medicare claims processing contractors in identifying improper payments. They are required to use clinical staff when conducting medical reviews and each RAC has a Medical Director.

The demonstration began in California, Florida and New York in 2005, and was expanded to include Massachusetts, South Carolina, and Arizona in 2007. In 2007, approximately 96 percent of the improper payments identified were collected overpayments, with the remaining 4 percent as repaid underpayments.

Overpayments collected in FY 2007 as of September 30tth include:

• $124.6 million in Florida
• $120.1 million in California
• $112.5 million in New York
• Total = $357.2 million

Underpayments returned in FY 2007 include:

• $4.1 million in Florida
• $8.4 million in California
• $1.8 million in New York
• Total = $14.3 million

Calculating payment error rates is the first step in correcting improper payments. In 2003, CMS implemented the Comprehensive Error Rate Testing (CERT) program to calculate error rates and estimates of improper payments. CMS uses the error rates to evaluate contractor performance, identify where problems exist, and to target improvement strategies The RAC demonstration program was added to further enhance and support the agency’s efforts.

Section 302 of the “Tax Relief and Health Care Act of 2006 (TRHCA) made the RAC program permanent and requires nationwide implementation by 2010. The RAC demonstration program began in March 2005 and will conclude in March 2008. CMS will gradually transition to the nationwide program by January 1, 2010.

For more information on the RAC program and to read the FY 2007 RAC Status Document please visit http://www.cms.hhs.gov/RAC/.

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5. Make A Difference With ASCLS, CLMA and ASCP Legislative Symposium 2008!

March 17-18 2008

Washington, D.C.

CLMA IS PROUD TO JOIN WITH ASCLS and ASCP for the 2008 Legislative Symposium. Attendees will go directly to their Representatives on Capitol Hill as a unified front on behalf of their profession. We need you!! – committed laboratory professionals and leaders – to come to Washington to provide a visible and informed voice and make our concerns known inside Congress.

            Education, Experience, Leadership

A key component of the Legislative Symposium is a guided education in the “how-to’s” of lobbying.  Our sessions, held at the Westin Grand in Washington, D.C., will familiarize you with the organizational structure of congressional offices, committees and staff. You will be coached on presentation techniques specifically tailored for the political environment.   Newcomers will know what to expect and what to do when they arrive on Capitol Hill for appointments on day-two. Everyone will return home from Washington with first-hand knowledge of the political system in action and confidence knowing you can make a difference.

              Issue Briefings and Seminars

• Medicare Reimbursement
• Personnel Shortage
• Competitive Bidding
• Title VII and Title VIII Funding

Please register directly with ASCLS.

Please note that the room block at the Westin Grand is filled.  An additional room block has been set up under the name of ASCLS at:

Best Western Georgetown Suites

 Rate is $209 plus tax per night

 Phone number:  1-202-457-0565

To download a registration form, please visit http://www.clma.org/knowledgecenter/files/policy/LEGDAY%20flyer%202008.pdf.

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6. Call For CLMA Committee Nominations

Are you interested in joining a CLMA committee but don’t know how to start the process?  The door is now open, and we are looking for dedicated, hard-working individuals to serve.  CLMA committees have been and will continue to be where the work is done and where our policies are generated.  Committees also provide important opportunities for those seeking to serve CLMA in future leadership capacities, as committee chairs or board members.

To facilitate the four Goals in the CLMA Strategic Plan, we are looking for individuals who can specifically help us:

●          Strengthen CLMA Member Value
●          Secure the Financial Position of CLMA
●          Secure the Operational Position of CLMA
●          Maximize Strategic Relationships

Now is your chance to be engaged and involved in setting “The Revolution Within CLMA!”  If you are interested in serving on a CLMA committee, please send your CV/resume along with a cover letter explaining which committee you’d like to join and why you believe you would be an asset to that committee. The deadline for submitting your resume and cover letter is 5:00 p.m. Eastern Time, Wednesday, March 12, 2008.  For more information, please contact Stephanie Robinson, Manager, Governance Services, at srobinson@clma.org or 610/995-2640, x211.

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