MedPAC proposal for additional reimbursement cuts to clinical laboratories are unsustainable: ACLA

"We believe that additional reimbursement cuts to clinical laboratories are unsustainable, as they would hit an industry that has nothing left to cut."

The proposal now under consideration by the Medicare Payment Advisory Committee to slash Medicare reimbursement rates for clinical laboratory services as part of a broader effort to fix the Medicare physician-payment system would threaten the economic survival of many clinical labs. That was the message of a letter signed by ACLA President Alan Mertz and sent today to MedPAC Chairman Glenn Hackbarth. The letter came in response to MedPAC's recent discussions to repeal the physician payment formula, known as the Sustainable Growth Rate (SGR), and finance changes to physician payment levels via an offset package of cuts to healthcare providers, including clinical laboratories, hospitals, nursing homes, drugmakers and non-primary-care physicians—totaling $235 billion over 10 years. Under the proposal, cuts in laboratory reimbursement would account for 9% of the savings, or $21 billion. In addition, the proposal would cut payments for laboratory services that are included in the Medicare physician fee schedule.

"We believe that additional reimbursement cuts to clinical laboratories are unsustainable, as they would hit an industry that has nothing left to cut," said the ACLA letter. "Clinical laboratory services inform 70 percent of healthcare providers' decisions, while accounting for only 1.6% of Medicare spending. Reimbursement for clinical laboratories under Medicare has been systematically reduced over the decades, raising concerns about the ability of many laboratories to continue to serve Medicare beneficiaries. Payments have been reduced by about 40% in real (inflation-adjusted) terms over the past 20 years. In addition, the Affordable Care Act cut Medicare reimbursement for laboratory services by an additional 19% over the next 10 years and more cuts are reportedly "on the table" for the Joint Select Committee on Deficit Reduction."

ACLA said that it looked forward to working with MedPAC in seeking ways to fix the broken SGR system without subjecting clinical laboratories to unsustainable reimbursement cuts.