Opposition to Medicare Lab Fees Proposed By Senate Finance Committee

Republicans have been trying to scare seniors with misinformation on health care reform, falsely claiming they will be subjected to loss of care due to Medicare cuts. While in general this is false, there is one health care reform proposal which actually does cut benefits to Medicare beneficiaries. This is in the bipartisan Senate Finance Committee proposal which I have previously stated should not be passed.

The Wall Street Journal reviews just one negative aspect of the proposal. Fortunately this comes in the business section and is worth reading, as opposed to the tremendous amount of misinformation which has been published in their opinion section.  The proposal is to charge a co-payment for laboratory tests. Currently Medicare has a deductible for most out-patient services and a 20% co-pay, but does not charge this on laboratory tests.

One major reason for not charging this is that the charges to collect this copay will often exceed the actual amounts which can be collected. Medicare approved charges for many laboratory studies are often under ten dollars. Billing for such small amounts can easily cost more than is collected. Further adding to the complications of collecting this is the problem that patients tend to be less likely to pay bills for services provided by outside billers  as opposed to the physician they are actually seeing.

While the added out of pocked expenses will generally be small, they can add up to be meaningful for seniors on a fixed income, leading AARP to oppose this measure.  One goal of the health reform legislation is to reduce out of pocket costs to encourage patients to obtain preventive care, as well as to receive routine monitoring of chronic diseases. It is contradictory to eliminate the co-pay on the office call for preventive services and then to charge more than in the past for laboratory studies.

It is possible that having to pay something out of pocket will lead to lower costs by reducing the amount of laboratory studies performed. This might turn out to be counterproductive for overall cost savings. Several years ago the  local Medicare intermediary became very restrictive on paying for drug levels for patients on digitalis. I wound up ordering far less of the levels, potentially saving Medicare some money. I also had a couple of patients hospitalized due to elevated levels of the medication which would have been picked up in out patient laboratory studies if not for the restrictions. In the end I bet that the restrictions cost Medicare far more than it saved due to increased hospitalizations, along with an increased number of EKG’s done to make up for the difficulties in obtaining the drug level. This laboratory restriction has subsequently been dropped.

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1 Comment

  1. 1
    Eclectic Radical says:

    The problem with ‘bi-partisan’ health care reform is that reformers on opposite sides of the aisle want different things from health care reform. Most Democrats want some form of increased access to health care, for more people, at a lower cost. Most Republicans want to cut federal government spending on Medicare and Medicaid (or claim they do under false pretenses, in the case of those who really want to promote expensive privatzation schemes) and put more people ‘on the dole’ back in ‘the free market.’ Honest conservatives will say that they want to control access to health care by those unable to pay to avoid ‘compromising’ the quality of care received by those able to pay.
    Which is to say that Democrats want more people to have the best health care possible and Republicans want fewer people to have the best health care available, in the most oversimplified terms.
    Without arguing the merits of these positions, it still isn’t hard to state that these are not positions that lend to genuinely workable consensus or compromise that can achieve the goals of either side. This is one example of how the Democrats seeking to give Republicans what they want undermines reform as a whole.

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