LAB INSTITUTE 2008 CHANGING OF THE GUARD SUMMARY REPORT BY: JOHN W. SHERER, MT(AMT) CHAIR, AMT FEDERAL GOVERNMENT AFFAIRS COMMITTEE SEPTEMBER 17-19, 2008 9-17-08 5 PM- First Session- Dennis Weissman-“Setting the Stage for a Generational Makeover: Top issues and /trends for the Lab and Pathology Sectors” Dennis indicated that all the materials will be accessible on-line for all participants for one month following the Institute. He opened up stating that this millennial generation is a generation unlike any other, they think different, make decisions different and they will vote different. Regarding voting, they are still not in the majority but predicted that whichever way the election goes this year, realignment will take place in the future. They tend not to align as Democrat or Republican, but want solutions to our problems. They want Government to set guidelines but leave choices.   Government Under The Gun-The good, bad and ugly- Catastrophic economic period- stock went down another 400 points today, AIG sell out, other bailouts. Record deficits-Problem for whoever is elected President Demographics of Medicare- We’ll expand from 40 Millions today to 80 Million in one decade. How to pay for health care? Healthcare cost and coverage running at 2-3 trillion dollars today, Labs costing 55 Billion or 5% of overall cost.   Reform in the making- Repeal of Lab Demo project was a major victory for the lab community and shows what can be done when we unify our efforts. In addition Labs will receive a 4.5% CPI increase in 2009 after being frozen the past 5 years. Interim Physician pay fix- Temporary, so whoever gets in office may place more control on payments. Medicare fees will all be under assault. Predicts unless Industry unites, we will be rolled over in future reimbursement fixes. When Lab Corp accepts 50% off Medicare fee schedule for Managed Healthcare contracts, look out. Noted they are not doing so well with these MHC contracted business. Yes they got volume, but is it profitable? He says Repeal of Lab Demo would not have happened had not Democrats taken control of the House and Senate in 2006.   It’s not business as usual – Diagnostic Conversion- Imaging may become part of lab package in future. Personalized Medicine- Growth is coming in Molecular, genomic, and other specialized testing, not in the routine testing. Direct Consumer Testing- Should Government get more involved with control? As fees increase, consumers will get more involved with their healthcare and cost. Consumer empowerment- Goes along with above. Innovation- This is where we’ll see market growth.   Industry Under Microscope- Leveraging and Pricing squeeze. Growth in specialized testing. Emerging business models-capital crunch. Venture Capital investment-California Medicaid hasn’t paid providers for 3 months for lack of funds. Generation shift.   5:45- 7PM- Keynote Address I- Millennials Rising: Let the Political and Policy Realignment Begin –By- Michael Hais, PhD  who was a political pollster for Democrats in Michigan and a Political Science Professor at University of Detroit and Morley Winograd who served as Senior Policy advisor to Vice President Al Gore. They are co-authors of Millennial Makeover. They predict greater voter turn out of the Millennial (those born after 1981) with 40 million eligible to vote this year. They predict an extreme political make over because history shows this occurs every 40 years. Millennials vote 2 to 1 as Democrats and consider themselves liberal; however 40% consider themselves Independents. They communicate via web-based, social networking sites like my space, face book and you tube. They are highly tolerant on social issues with 60% okay with gay marriages and they tend to think the Government should take care of people who can’t take care of themselves, they prefer bigger Government, and think that Health Insurance should be available to all even if it cost more in taxes. They tend to be more global in their thinking.   7 – 8 PM Going inside the Boardroom, Taking a measure of the Lab Industry-This was a question answer session with a panel of experts. I’ll only cover a couple of the more interesting questions and answers.   1)      Given what has happened on Wall Street this week, will this impact the Lab Industry? Response- Yes the public will start to weigh health care cost against putting gas in their car. 2)      How about Education in Medical Schools? Response- States support so they will not be that much impacted. 3)      What is the #1 competitive challenge your organization faces over the next year? Response- Pricing threats by commercial payers including Managed Health Care 4)      What do you see as the future of the Lab? Responses- Massive change in Healthcare reform, genomics, I.T., and electronic records will revolutionize the industry. Very positive with great growth, greater need of technology and will have target treatments to cure or treat diseases heretofore not treatable.   Thursday, 9-18-08 8AM – Craytal Ball Gazing: 2008 Election Analysis and Forecast Speaker Ann Walter, Editor in Chief of the Hotline. Many intricacies were presented making this a very interesting election but the speaker predicts the Democrats will pick up 4 to 6 Senate seats and 12 to 15 house seats and the Presidential race favors Obama, noting that when the country is in financial crises, never has the same party president been elected. Obama has already spent over $200 milllion but the public is still not real comfortable with his message of change. He will need to get more specific.   Special Service Award- Dennis Weissman deviated from the program to recognize Congresswoman Nydia Velazquez (D-Brooklyn, N.Y.) chair of the House Small Business committee. Congresswoman Velazquez addressed the body indicating that sometimes things that make sense at first don’t make sense when looked at critically and the Lab Competitive bidding demo was one such case. She said when you see wrongs, you must be the voice to correct the wrongs and she went on to say the award should go to all who participated in the grassroots efforts to get this done.   9-18-08 9-10AM- Health Care Reform Redux- Can the Policy Divide be Resolved? Speakers Maggie Maher, PhD, journalist and author of “Money-Driven Medicine” and “The Real Reason Health Care Costs So Much” and Grace-Marie Turner, President of Galen-Institute, a public policy research organization that promotes ideas for reform that transfer power over health care decisions to doctors and patients.   Dr. Maher explained that market driven health care doesn’t work because consumers don’t get involved in the decision making process. She explained that where there are more hospital beds, the cost per beneficiary increases 2 fold yet the outcomes are no better and 80% of our dollars are spent treating chronic illnesses. She stated that consumers don’t have the same leverage in Health Care as they do buying other commodities and this presents a problem.   Grace-Marie Turner feels that Health Care reform will be put on the back burner because of the economic crises, the Iraq war, and Russia/Georgia issue. There simply isn’t enough money to address the problem. She feels we need to gain better value for our dollars, better preventive H.C., and better use of our resources cutting out duplication of services, etc. She said Obama believes government must have more control to reduce cost while McCain believes we need better resources and higher quality. She addressed competitive bidding and agreed many times it reduces competition rather than increasing it.   9-18-08, 10:30-11:30 AM- Capitol Hill Buzz- Laying it on the Line for Labs and Pathologists. This was a panel of speakers. Don Lavanty, Esq. nationally renowned Washington political specialist on health policy was moderator. First speaker was Tom Dawson, Esq.  Counsel for Health Care policy to the U.S. House of Representatives, Committee on Small Business.  He was the driving force behind the scenes for lab competitive bidding Demo repeal working directly with Congresswoman Velázquez. He explained what a difficult job it was to get her to see that this was anticompetitive rather than competitive in nature. To the question, what do you see coming in Health Care arena? He responded Reform is coming but it won’t look like the UK system. He indicated small hospitals are having difficulty moving to the Electronic Record system and their committee is looking at that.   Alan Mertz, President of American Clinical Laboratory Association was the next speaker. He praised the efforts of the lab community in their grassroots effort to bring about repeal of the lab competitive bidding demonstration and at the same time deliver 4.5% Lab Fee increase for 2009. The San Diego lawsuit was very important for it held up the bidding process. Although the underlying legal action is moot because of the legislative repeal, the goal now is to keep CMS from using the bids submitted before the court injunction to develop a national lab fee schedule. He predicts that a Democrat sweep increases the likelihood of major health care legislation, early legislation is likely and they must face the physician fee schedule within 1.5 years or they will be cut by 20%.   Bob Waters, Chair of the Clinical Lab Coalition and Representative for the American Association of Bioanalysts.  He says nobody in Congress really cares about Labs. Economy is first priority, Terrorism is second, Iraq is third, and shifting to a new Congress will be fourth. It may be 2 to 4 years before health care reform takes priority. Medicare reform means cuts before baby boomers kick into the system. He praises the lab community for hanging together on Co-Pay issue and now Competitive bidding and stated that lessons learned for the future, if we don’t have consensus, it will be very difficult to pass anything and it could bring divisiveness within the industry.   9-18-08, 11:30am-12:30pm – The Lab Regulatory Insider, Probing the Hot Spots A panel of speakers addressed these topics.  Among the topics discussed were, crosswalk pricing may not pay for innovation/new tests for cancer and molecular testing. They discussed the new ABN, CMS-R-131, explaining CMS wants just one form reducing paper work and covered key changes and implementation has been delayed until 2/28/09.   Judy Yost, Director of Lab Services at CMS addressed the main concerns as avoiding Proficiency testing (PT) referral and status of alternative quality control. Do not send a PT or part of such to another lab for testing. Be careful with reflex and confirmatory testing.  Don’t send these out even if that is your policy for routine patient samples. Do not communicate with another lab about  results until after your results are returned. Avoid the perception of cheating. QA coordinators should not review before submitting results. She solicited reference labs to call CMS if they receive PT tests from another lab. Penalties for such action would be loss of CLIA certificate for 1 year and cancellation of Medicare/Medicaid payments for 1 year and Lab Director can’t direct the lab for 2 years. Where there have been court appeals to this violation, CMS has prevailed in all cases. A letter is coming out to all Non-Waived labs in this regard.   9-18-08, 2 PM- Latest Developments on the Legal Front Panel Speakers were Hope Foster, Esq. who has represented Labs in law suits for the past 30 years and Patric Hooper, Esq. the attorney who handled the recent suit challenging the Completive bidding demonstration in San Diego, CA.  Hope Foster started out by stating Labs are not immune from OIG. Whereas in the 90’s most cases involved billing, now the cases are more sophisticated, like marketing practices, does the test do what you claim it will do?,  pricing issues, Stark issues, and anti-kickback issues. She cautioned, know what your marketing people are doing, they should be employees. Compliance programs should focus on marketing practices. Recently there have been several cases of Proficiency violations where the employee sent out the specimen for verification before results were submitted. Mr. Hooper discussed the Repeal of Lab Competitive bidding Demo lawsuit and that they are trying to block CMS from using the information received from those labs that submitted bids before the court ruled on the case.   9-18-08-4 – 5:30 pm- Getting down to Business: Practical Solutions for Lab Compliance Challenges- Speaker Christopher Young, Certified in Health Care Compliance with 20+ years in consulting on compliance issues. Chris shared results of the Health Care Compliance recent survey as follows:   Does your lab have a compliance program? 65% said yes and 40% met monthly, 41 % quarterly. How many employees in your compliance department? 36% said 1, 22% said 2, 19% said 2 or 3. Is there a specific compliance budget? Only 15% said yes. Chris cautioned that OIG looks at this with a jaundice eye. Put something in the budget for compliance. Is new employee and annual compliance training mandatory? 93% said yes and 65% said it included HIPAA training as well. How many hours are required for training? 41% said 1 hour or less, 40% said 1-3 hours, 10% said 5+ hours. What is the primary training method? 51% said web-based, 24% classroom with compliance officer, 10% classroom with other instructors, 8% self instructed, 2% video How long has the current Compliance Officer been in place? 42% said 6 or more years, 22% 3-4 years, 15% 2 or less years and in the area of expertise- 51% are schooled in basics, 25% don’t know enough to correct a problem, 16% not fully trained, and 7% not comfortable in position. How many conduct some kind of audits? 94% said yes. Who conducts the audits? 11% said department managers, 8% said other person in department, 24% said compliance officer, 8% said outside auditors. How often are audits conducted- Monthly or quarterly. What kinds of audits are conducted? 82% Billing, 65% Charge Master, 48% program effectiveness, 33% sales and marketing, 29% said annual general audits, and 19% said special nitch business audits like nursing homes and ESRD.   Chris emphasized the importance of having good up to date policies and procedure in place and ongoing training stating that untrained employees will not detect violations. He also emphasizes team work. Compliance is every employees business.   9-19-08 sessions starting at 8:45 am through 4 pm were as follows:   Diagnostic Innovations and Convergence: What the Future holds Panel Discussion: Promises and Realities of Personalized Medicine Democratizing the Human Genome-The Advent of Personal Genomic Testing Roundtable: Has Genetic Testing Reached A Tipping Point for Labs? Empowering Consumers Through the Web: Google’s Strategy for Providing Personalized Medical Information Driving Growth in Diagnostic Testing through innovation Labs on the move   While all of these sessions were of interest, they dealt with new technologies. If anyone is interested in one of these topics, let me know and I’ll try to provide a summary.