With the implementation of the Affordable Care Act (ACA) significant issues have arisen for those individuals using Medicare Part B coverage. Evolving changes affecting Medicare coverage have also had a profound impact on hospital-based pathology and clinical laboratory departments. Two crucial components laboratory directors must contend with are significant declines in reimbursement and severe cuts to their annual budgets. Faced with these obstacles pathology and clinical laboratory operations are balancing the need to remain financially solvent while continuing to provide the quality patient care (Confab, 2013).
Effects of the Affordable Care Act on Pathology and Clinical Laboratories.
Pathology and clinical laboratory operations are a $74 Billion industry challenged to adapt to ongoing changes being implemented due to healthcare reform. The laboratory industry as a whole saw declines in overall revenue for the first time ever in 2013 (Jahnle, 2014). This decline has major implications effecting future laboratory operations. This can be attributed to the major influx of people enrolling in the ACA. Macro trends for the clinical laboratory seen due to these enrollments are as follows:.
Lower reimbursement – 4.95% overall in 2013.
1.75% cut in Medicare clinical laboratory fee schedule under ACA.
2.00% budget sequestration cut.
2.00% cut for Substance Growth Rate (SGR) formula fix.
1.70% Consumer Price Index (CPI) adjustment.
-0.90% productivity adjustment (Jahnle, 2014).
Areas of the clinical laboratory most impacted in both 2013 and 2014 were the pathology and molecular diagnostic sections (Jahnle, 2014).
Background of Medicare Conversion Factors (CF).
Medicare uses a conversion factor (CF) which is the multiplier that sets physician fees. With the new healthcare implementation, the CF of $36.8729 for June 1 through November 30, 2010 dropped to $28.3868 on December 1 and dropped again to $25.5217 on January 1, 2011.