Medicare Clinical Laboratories Competitive Bidding Demonstration Page: 1 of 6
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Order Code RS22769
December 7, 2007
~. CRS Report for Congress
Medicare Clinical Laboratories Competitive
Information Research Specialist
Knowledge Services Group
Medicare pays for clinical laboratory services based on a fee schedule originally
established in 1984. Section 302(b) of The Medicare Prescription Drug, Improvement,
and Modernization Act, P.L. 108-173, mandated the implementation of the Medicare
Clinical Laboratory Competitive Bidding Demonstration to explore whether quality
laboratory services offered through competitive bidding could be provided at prices
below current Medicare rates. Opponents of competitive bidding have asked Centers
for Medicare and Medicaid Services (CMS) to postpone the demonstration, citing
problems such as its complexity and its effect on small businesses. They expressed their
concerns during an open forum sponsored by CMS, and as a result, CMS made some
changes to the proposal. The President's FY2008 Budget estimated that payments to
clinical laboratories would decrease, saving $110 million in FY2008 and $2.38 billion
from FY2008 through FY2012 if competitive bidding replaced the current fee schedule.
Legislation has been introduced in the 110th Congress that would eliminate the
competitive bidding project.
Clinical laboratories provide tests on specimens taken from the human body (such
as blood or urine) to help physicians diagnose a patient's health. Under current law,
Medicare Part B-covered tests (with some restrictions) include cholesterol and blood
lipid tests, fecal occult blood testing, Pap smear tests, prostate-specific antigen tests, and
diabetes screening tests.
Medicare has paid for clinical laboratory services based on a fee schedule originally
established in 1984. Section 302(b) of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) mandated the Medicare Clinical Laboratory
Competitive Bidding Demonstration to determine whether competitive bidding can be
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Medicare Clinical Laboratories Competitive Bidding Demonstration, report, December 7, 2007; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc805680/m1/1/: accessed April 20, 2019), University of North Texas Libraries, Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.