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After many years of dodging bullets and absorbing punches from the budget hawks on Capitol Hill, the clinical laboratory community finally had cause for genuine celebration on July 16, 2008. Both the House of Representatives and the U.S. Senate had voted that day to override President Bush’s veto of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), sealing the single most significant legislative accomplishment for the lab community in decades.
Competitive Bidding Demo Repealed – While the central mission of the Medicare bill had been to prevent a 10.6% physician pay cut from taking effect July 1, MIPPA includes a number of provisions that benefit other providers as well. Of primary significance to lab interests is a repeal of the clinical laboratory competitive bidding demonstration that had been mandated five years earlier in the Medicare Prescription Drug, Improvement and Modernization Act (MMA).
The repeal language was included in the final Medicare legislation after separate, stand-alone bills to terminate the demo had gained increasing support in the House and Senate. But victory never would have been achieved without a well coordinated lobbying campaign by the Clinical Laboratory Coalition (CLC). The campaign to repeal competitive bidding began several years ago, as soon as it became apparent that the Centers for Medicare and Medicaid Services was not going to give proper credence to stakeholder input and concerns in designing the demo.
The repeal movement gained steam in 2007, when the CLC prevailed upon Congresswoman Nydia Velázquez (D-NY), Chair of the House Small Business Committee, to hold a hearing on the demo’s impact on small laboratories and the Medicare populations served by those labs. The crusade gained added momentum when, shortly after the House hearing, bills to repeal the demo were introduced in the House by Rep. Velázquez and in the Senate by Finance Committee members Ken Salazar (D-CO), Pat Roberts (R-KS) and Maria Cantwell (D-WA).
The key breakthrough, however, occurred in late April of this year when senior Democrat and Republican staff members of the Senate Finance Committee summoned CLC representatives to a meeting on Capitol Hill to engage in some “horse trading.” The July 1 deadline for resolving the physician pay cut fiasco was fast approaching, and a Medicare bill was in the works. The staffers were well aware of the coalition’s desire to repeal the demo, while at the same time Congress was looking for budgetary offsets to help pay for the physician pay-fix. Coincidentally, the MMA’s five-year freeze of lab fee inflation updates was also coming to an end, and the committee staff wondered whether the lab community was willing to tolerate a reduction in the scheduled updates over the next five years in exchange for repeal of the competitive bidding demo.
Following a series of skull sessions, the lab coalition reached a consensus that it could live with a partial (rather than full) CPI update, if that was the price for a legislative repeal of the demo. The coalition thus proposed that the Finance Committee accept a reduction in the full CPI update for Part B lab testing by 0.5% each year, which was calculated to save the Government about $600 million over five years. The committee ultimately accepted the coalition’s proposal, gained the concurrence of their counterparts in the House of Representatives, and included the repeal package in the final Medicare bill that passed both chambers of Congress.
Drama Precedes MIPPA’s Enactment – The Medicare bill did not become law, however, until considerable drama had unfolded on the floor of the Senate. With the House having already passed the bill, the Senate leadership on June 26 was able to muster only 59 of the 60 votes need to invoke “cloture” – a procedural mechanism that ends debate and brings legislation to the floor for a vote. During Congress’s July 4 recess, the American Medical Association stepped up an already intensive campaign to win enactment of the bill, including pointed attacks on Republican Senators who had voted against cloture.
A second cloture vote was held July 9. With the bill’s fate hanging narrowly in the balance, Sen. Edward Kennedy (D-MA) made a surprise appearance to cast an “aye” vote. Kennedy had missed the previous cloture vote while recovering from brain surgery and undergoing chemotherapy for brain cancer. After Kennedy cast the deciding vote amidst loud cheers from colleagues, a number of Republican Senators changed their votes from “nay” to “aye,” and the bill ended up passing the Senate by a 69-30 tally.
The drama wasn’t over yet, however. Six days after the Senate vote, President Bush followed through on his threat to veto the legislation. In his veto message, the President made clear that he favored a physician pay fix, but opposed the way this bill paid for it – i.e., through cuts in payments for the Medicare Advantage program (a Medicare managed care program run by private insurance companies).
Immediately following the President’s action, Speaker of the House Nancy Pelosi (D-CA) brought the bill back to the House floor for a vote to override the veto. With a two-thirds majority needed to override, the House voted overwhelmingly to do so, 383-41. A few hours later, the Senate similarly overrode the veto by a margin of 70-26. MIPPA thus became law on July 15, 2008.
Fee Schedule Inflation Update – Because of MMA’s five-year freeze on the Medicare lab fee schedule, labs had not received an inflation update since 2003. With MIPPA’s enactment, the clinical lab fee schedule will now be adjusted annually through 2013 by the urban consumer price index (CPI-U) minus 0.5%. For FY 2009, the update will be a surprisingly robust 4.5%, since inflation has been substantially higher over the last 12 months (5.0%) than in the recent past.
The Power of Advocacy – The passage of the Medicare bill, and especially the inclusion of provisions critically important to the lab community, is a true testament to the effectiveness of advocacy. The competitive bidding demo would not have been repealed if not for a persistent, well coordinated campaign that included both Washington-based lobbying and grassroots advocacy.
All who had a hand – however small – in the effort deserve thanks and hearty congratulations. And the entire lab community should allow itself to bask in the glory of its greatest legislative victory in decades.
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