A small clinical laboratory and two healthcare systems in Southern California have filed a lawsuit seeking to hold up a CMS demonstration project intended to find out whether competitive bidding could lower Medicares bill for laboratory services without compromising quality or access.
Unless a federal judge grants an injunction, the CMS plans to close the door on bids Feb. 15 for the three-year project, which would replace the existing fee-schedule in the metropolitan area around San Diego.
Three-hospital Sharp HealthCare and four-hospital Scripps Health, both in San Diego, operate laboratories that provide significant outpatient services to patients of their affiliated physicians, and the lawsuit argues that competitive bidding could hobble the integrated delivery of care if the systems are forced to farm out laboratory work to low bidders. A third plaintiff, Internist Laboratory, Oceanside, Calif., provides only a small fraction of the 303 coded services it will be required to bid on, essentially forcing it into agreements with competitors, the lawsuit argues.
This project is being rushed into place, and the CMS folks did not go through the kinds of rulemaking and other regulatory processes that ordinarily they must go through when theyre trying to change the system, said lawyer Patric Hooper of Hooper, Lundy & Bookman, which filed the complaint Jan. 29 in U.S. District Court in San Diego. The American Clinical Laboratory Association, meanwhile, is urging lawmakers to repeal the statutory language in the Medicare Modernization Act of 2003 that led to the project, warning it could sink smaller laboratories and harm access to services.
A CMS spokeswoman, while citing a policy against commenting on pending litigation, said the agency has communicated with and sought input from the laboratory industry and other stakeholders. -- by Gregg Blesch
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