Lab industry opposes Clinton plan to reinstate co-pay for lab services; GAO to study safety and supply of nation's blood - Washington Report - the Laboratory Budget Coalition's opposition to Pres. Clinton's proposal to reintroduce 20% lab co-payment in Medicare; General Accounting Office - Column

Medical Laboratory Observer, Sept, 1999 by Joan Szabo

Lab co-pay proposal would trim reimbursements

The Laboratory Budget Coalition, a group of lab industry representatives, is going all out to oppose President Clinton's proposal to reintroduce the 20% lab co-payment in the Medicare program. The proposal is part of the President's recently announced plans to overhaul and strengthen Medicare.

The issue is important to lab operators because, if enacted, the proposal would likely mean a reduction in reimbursement for lab services.

In calling for reinstatement of the lab co-pay, the Administration argues that lab services are a fast-growing Medicare sector and that making beneficiaries contribute to the cost would help trim over-utilization and fraud. Under the proposal, Medicare patients would be required to pay 20% of the cost of the lab tests they receive, essentially shifting more of the cost to beneficiaries.

The lab co-payment proposal, along with a proposal to index the Medicare Part B deductible, would save an estimated $11 billion over 10 years according to the Administration's estimates.

Under the indexing proposal, the deductible that patients have to pay each year before Medicare begins covering their doctor bills, would increase on an annual basis to keep pace with inflation. The deductible has remained at $100 since 1991.

Members of the Lab Budget Coalition, including the American Association of Bioanalysts and the American Clinical Laboratory Association, have already meet with members of Congress to register their strong opposition to reintroducing the lab co-pay.

"What this proposal boils down to is a 20% cut for labs," says Mark Birenbaum, PhD, AAB administrator in St. Louis, MO. He says this is so because the added cost of doing patient billing plus the anticipated amount that lab operators will be unable to collect from some patients will exceed the amount of reimbursement received. As a result, lab operators will receive 20% less income.

Responding to the President's Medicare proposals, the American College of Physicians-American Society of Internal Medicine pointed out that the co-payment could result in some low-income patients choosing not to incur the costs of obtaining needed laboratory tests.

Mr. Clinton's plan represents a serious threat for labs because the pressure is on in the nation's capital to reduce Medicare spending. The lab industry is a likely target for cuts, says Birenbaum, and as a result "labs have to campaign against the proposal as hard as they can." Only time will tell if they will be successful.

Adequacy of nation's blood supply under study

There is growing concern in Congress over recent reports that the demand for blood may soon outstrip the supply. In fact, the chairman of the House Commerce Committee, Thomas Bliley Jr. (R-VA), has asked the General Accounting Office to look into this looming problem.

The country could be in a real deficit situation where the rate of transfusions will be higher than the rate of donations, says a Capitol Hill source.

The blood supply situation is being exacerbated by a recent move from the Department of Health and Human Services blood safety advisory committee to defer all potential blood and plasma donors who have spent 6 months or more in the United Kingdom between 1980 and 1996. The aim of the deferral is to avoid a possible risk of donations from individuals who consumed beef contaminated with "Mad Cow" disease, or bovine spongi-form encephalopathy. The HHS Secretary must still approve the committee's recommendation.

Rep. Bliley also is concerned about a possible HHS decision to direct blood banks to use blood drawn from people with hemochromatosis, a hereditary disease that overloads their bodies with iron. Individuals with this condition are currently deferred from donating blood. But HHS is reviewing the deferral and may decide that units from people with the disease would be distributed for transfusion.

Rep. Bliley has asked the GAO to study recent trends in blood donations and transfusions, the likely impact on the blood supply of the recent ban on blood donors who have traveled to Great Britain, and the potential impact of a possible change in policy to allow units of blood collected from individuals with hemochromatosis to be distributed. The study from the GAO is expected to be available by the end of September. Once the data is available, action from Congress addressing the supply problem may be forthcoming.

America's Blood Centers has said that if the HHS decision to adopt the deferral policy for individuals who may harbor and/or transmit Mad Cow disease goes forward, ABC will have to request assistance from the government. Specifically, several steps will need to be taken by HHS, including a public information campaign encouraging blood donations and an education campaign encouraging physicians to he conservative in blood usage.