Medicare messed up again

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non-starter

Burnsville, MN

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#1
Mar 27, 2013
 

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Medicare Has Stopped Paying Bills For Medical Diagnostic Tests. Patients Will Feel The Effects

The Obama Administration has stopped the paying bills from hundreds of health care companies, and it has nothing to do with sequestration.

This is a story of bureaucratic mismanagement at the Centers for Medicare and Medicaid Services.

At issue is the way that Medicare reimburses everyone from the big laboratory companies such as the Laboratory Corp of America (LH:NYSE) and Quest Diagnostics Inc.(DGX:NYSE), to the molecular diagnostic labs inside academic hospitals, and especially smaller firms that make proprietary tests used by doctors to more effectively target treatments to patients with conditions like cancer.

Some of these proprietary tests — focused around the more accurate diagnosis of prostate cancer — are profiled in today’s edition of the New York Times. The incompetent manner in which Medicare has handled a change in the reimbursement of similar tests has the potential to stymie one of the most important and potentially cost-saving technologies in the pipeline.

At issue are molecular diagnostics, used to screen for everything from genetic markers that predict disease to proteins that help diagnose illnesses and guide peoples’ response to treatments. These tests are transforming the treatment of cancer, among many other maladies.

The Medicare agency decided to change the way it reimburses these sorts of diagnostic tests. But it’s been slow to decide on its new approach. So in the absence of a policy, the Medicare program is simply not paying its bills.

Previously, these diagnostics were reimbursed through a method called “code stacking.” Under this old approach, adding up the “cost” of each discrete step needed to perform a particular test derived the price paid for molecular tests.

This “cost plus” approach to setting payment rates was familiar to government actuaries. But it had many problems. Not least of which, it didn’t necessarily correlate payment rates with value – but merely the complexity of the test.

Some labs grew more adept than others at exploiting the payment scheme. A handful of crafty labs would create more complex tests, or “stack” additional steps in their molecular panels in order to game higher reimbursement.

The result was a lot of variability in what was paid for similar diagnostics, depending on which lab ran the test, and how good it was at “stacking” codes.

Moreover, private insurers that reflexively piggy backed on the Medicare payment scheme complained that the bills they got only identified a series of molecular testing steps. These bills didn’t pinpoint the actual test that was being performed. So insurers often didn’t know what they were paying for.

The private health plans could have fixed this on their own, by demanding that labs provide more information. But many health plans, looked to Medicare to fix the billing system. Under pressure, the agency said it would develop a new scheme.

The prior payment system was far from optimal. But so has Medicare’s approach to replacing it. Moreover, under the new payment schemes, even when Medicare starts to pay its bills again, the rates for individual tests are likely to come down. That was the overriding impetus for changing the scheme in the first place – to save the government money. It’s another reason why big lab companies that make a lot of their margin on the complex, molecular tests could get pinched going forward.

To move away from the “code stacking” and to a system that paid diagnostics based on what each product was testing for, in 2010 Medicare asked the American Medical Association to come up with specific codes for the most common (and important) molecular tests. There were 116 of these new codes in the first tranche. These test-specific codes became effective in 2011. But Medicare chose to retain the existing “stacking codes” and not convert to the molecular codes until 2012.
non-starter

Burnsville, MN

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#2
Mar 27, 2013
 

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Why wait? The idea was to give Medicare time to set prices for each of these new codes. Medicare was urged by the labs to cross walk some average price being paid to existing tests to the new codes (perhaps a median or weighted average of the stacks being used, which CMS would be able to measure).

But Medicare didn’t trust the current prices. It didn’t want to import any relic of the flawed stacking system into the new codes.

But instead of coming up with a new system, CMS took the full year to do largely nothing. The agency, quite literally, sat on its hands. Then, only after winding down the clock, the agency announced that it would let the local Medicare carriers figure out what prices to assign to each of the different diagnostic codes (through a byzantine process called “gap filling”). In other words, Medicare punted.

It basically means that the local carriers, which contract with CMS to administer the Medicare program for different regions of the country, now have wide discretion to come up with their own prices. The entire punt gave the local Medicare contractors no time – and no clear direction – on how to assign prices to the different diagnostic codes. The result is that no prices have been established for the vast majority of the marketplace. And so the tests simply aren’t being paid for.

This is having a profound impact on the market for developing new tests. Investors are shunning new investments as this gets sorted out. It says nothing about how these rates are ultimately going to be established, and whether the prices that the government assigns will reflect the value and innovation that these products offer.

There has been little transparency around how the local Medicare carriers are going about coming up with their price schedules. No right of appeal from affected companies. And really no clear methodology on how this all gets done.

The political class talks about the need to more effectively target treatments to help improve medical outcomes and drive more value. Yet they are systematically unraveling the very technology that is going to enable this sort of personalization.

In practice, what’s happening is that contractors are starting to copy the price schedule set by the only Medicare contractor setting some sort of rates – the contractor that covers California, Palmetto. In effect, the State of California may end up setting prices paid for most of the molecular diagnostics marketplace.

Some contractors have not priced anything, such as the Medicare contractor for the market covering Florida. That means diagnostic labs located in markets like Florida aren’t getting paid at all. In many cases, Medicare contractors look into setting a price only after they see a lot of claims for the same sort of test.

There’s no clear deadline on when this will all get resolved. There’s some speculation that when the Medicare contractors submit their 2013 pricing on April 30th, they’ll have to declare their prices for these various molecular tests. Once they do, the labs should get paid retroactively. But the April 30th deadline seems soft. This could linger much longer.

There’s also a risk for labs that the individual Medicare contractors may decide not to pay for certain codes (and tests) altogether.

This sort of bungling may be without precedent, even for the Medicare agency, which is quietly viewed in Washington – among both Democrats and Republicans – as being poorly administered. This isn’t a political slur. Problems emanating from CMS have cursed both Republicans and Democrats alike.

Diagnostic tests were supposed to usher in an age of personalized medicine. Now they’re being actively priced controlled. And by a bureaucratic regime that can’t even figure out what low-ball prices they want to pay for these services.

http://www.forbes.com/sites/scottgottlieb/201...
Bushwhacker

Kent, WA

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#3
Mar 27, 2013
 

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Sorry, no source, low integrity poster.. Heck, if you make YOUR "rules" try following them... LMAOROFU~!
non-starter

Burnsville, MN

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#4
Mar 27, 2013
 
The source is at the bottom of the second part of the posting; low integrity, reading comprehension challenged poster.
Bushwhacker

Kent, WA

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#5
Mar 27, 2013
 
Sorry, no source, low integrity poster.. Heck, if you make YOUR "rules" try following them... LMAOROFU~!

Poor non-sense, every word you write is partisan POOP !!!

non-starter wrote: I found it, you just won't publish that you got it off Yahoo or Wiki answers ....

THEN the lies began, LMAOROTFU~!

non-starter wrote: No, I guessed, because you

weren't forthcoming with your source

OR MY NEW FAVORITE-

non-starter wrote: I found similar postings on Yahoo answers and Wiki answers

You posted to the urban dictionary to support your position...It's called tampering and you're clearly a duplicitous/dishonest POS... Have a nice lie... Oh sorry, I surely meant life.
non-starter

Burnsville, MN

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#6
Mar 27, 2013
 

Judged:

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At issue are molecular diagnostics, used to screen for everything from genetic markers that predict disease to proteins that help diagnose illnesses and guide peoples’ response to treatments. These tests are transforming the treatment of cancer, among many other maladies.

The Medicare agency decided to change the way it reimburses these sorts of diagnostic tests. But it’s been slow to decide on its new approach. So in the absence of a policy, the Medicare program is simply not paying its bills.
Bushwhacker

Kent, WA

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#7
Mar 27, 2013
 
Seems they're late and you're nothing but a WHINER ~!!! Perhaps, the sequester, you CLAIMED would have no effect ! LMAOROFU~!
non-starter

Burnsville, MN

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#8
Mar 27, 2013
 
Bushwhacker wrote:
Seems they're late and you're nothing but a WHINER ~!!! Perhaps, the sequester, you CLAIMED would have no effect ! LMAOROFU~!
Too bad you can't read, from the article:

The Obama Administration has stopped the paying bills from hundreds of health care companies, and it has nothing to do with sequestration.

This is a story of bureaucratic mismanagement at the Centers for Medicare and Medicaid Services.

At issue is the way that Medicare reimburses everyone from the big laboratory companies such as the Laboratory Corp of America (LH:NYSE) and Quest Diagnostics Inc.(DGX:NYSE), to the molecular diagnostic labs inside academic hospitals, and especially smaller firms that make proprietary tests used by doctors to more effectively target treatments to patients with conditions like cancer.
Bushwhacker

Kent, WA

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#10
Mar 27, 2013
 
non-starter wrote:
<quoted text>Too bad you can't read, from the article:
The Obama Administration has stopped the paying bills from hundreds of health care companies, and it has nothing to do with sequestration.
This is a story of bureaucratic mismanagement at the Centers for Medicare and Medicaid Services.
At issue is the way that Medicare reimburses everyone from the big laboratory companies such as the Laboratory Corp of America (LH:NYSE) and Quest Diagnostics Inc.(DGX:NYSE), to the molecular diagnostic labs inside academic hospitals, and especially smaller firms that make proprietary tests used by doctors to more effectively target treatments to patients with conditions like cancer.
When I read opinions, I recognize them.... Pretty sad, you claim them as gospel.... Poor troll, a mind is a terrible thing to waste.
Not Surprising

Saint Paul, MN

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#12
Jul 14, 2013
 
non-starter wrote:
At issue are molecular diagnostics, used to screen for everything from genetic markers that predict disease to proteins that help diagnose illnesses and guide peoples’ response to treatments. These tests are transforming the treatment of cancer, among many other maladies.
The Medicare agency decided to change the way it reimburses these sorts of diagnostic tests. But it’s been slow to decide on its new approach. So in the absence of a policy, the Medicare program is simply not paying its bills.
What I have read is the Department of Health and Human Services sends Guidelines to Medicare on what services seniors can and cannot get. There are limits, one example: cholesterol blood test readings, only every 5 years, which is absurd if the person has high cholesterol. It needs to be checked frequently if the person is on any kind of prescription medication for it. Also, if Medicare doesn't pay for it, the supplement that the senior pays for won't either, regardless of what Insurance Company they have their supplement with. It is absurd and life threatening for many seniors who have worked all their life and did it the right way. It sends a message to the younger generations, that working may be the wrong way. Just get on the welfare system early.
Bushwhacker

Kent, WA

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#13
Jul 14, 2013
 
When I read opinions, I recognize them.... Pretty sad, you claim them as gospel.... Poor troll, a mind is a terrible thing to waste.

787 flying, then you're lying.

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