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David P. Smith: Major Lab Companies Given Blank Check by Government
Monday, June 20, 2011 8:35 AM

Written by David P. Smith

Over the last several years, Medicare has reduced payments for lab tests and most insurers have followed suit to the point that most private physicians could no longer afford to offer lab services in their clinics. The only clinics that can offer lab services are those groups with enough volume to overcome the low reimbursement levels. Medicare has barred participating physicians in the past from requesting payment from patients if Medicare deemed the test “not medically necessary” according to their confusing usage of various codes for which the rules are continually changing.

Now, Medicare allows the patient to be billed for tests that they have denied coverage benefits, if the patient has signed a waiver indicating that they understand the test could be denied for payment and, if so, the patient will be responsible. This new policy had been put in place after most physicians completely quit doing lab in their offices. That policy of allowing the patients to be billed if they signed the waiver agreement has resulted in gouging of patients by large lab companies who are basically allowed to then charge whatever they want. For example, if a lipid profile is denied for payment by Medicare, the lab company can lawfully send a bill to the patient and this inexpensive test may be charged to the patient for well over $100 when Medicare reimbursement is $18.72. The same level of inflation of charges to patients occurs with all other lab tests that a physician might order to help with diagnosis or monitoring of their patients.

This year, Medicare is now going to deny payment as “not medically necessary” for any patient who does not sign a waiver under their reasoning that unless the patient has signed a waiver, the test isn’t really needed. This will effectively force the patient to choose whether to subject themselves to exorbitant charges from lab companies in the event of a Medicare denial, or not get their tests done. With rare exception, physicians did not treat patients this way in forcing them their hands like this.

The solution for this problem is for these lab companies, who have agreed to accepting Medicare payment anyway, to only be allowed to bill the patient for what they would have been reimbursed by Medicare if it had been approved, not multiple times over what they would have been paid. This is fair and not abusing the patients when there is a denial by Medicare. Lobbying by lab companies has paid off for them in a big way; it’s time for this boondoggle to end.

 

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