[Federal Register Volume 72, Number 200 (Wednesday, October 17, 2007)]
[Notices]
[Pages 58856-58857]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-20499]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-5045-N]
Medicare Program: Medicare Clinical Laboratory Services
Competitive Bidding Demonstration Project
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice.
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SUMMARY: This notice announces the first demonstration site for the
Medicare Clinical Laboratory Services Competitive Bidding Demonstration
project and the date for the Bidder's Conference. The Medicare Clinical
Laboratory Competitive Bidding Demonstration was mandated by the
Congress. Section 302(b) of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173)
requires the Centers for Medicare & Medicaid Services (CMS) to conduct
a demonstration project on the application of competitive acquisition
for clinical laboratory services that would otherwise be paid under the
Medicare Part B fee schedule. The objective of the demonstration is to
determine whether competitive bidding can be used to provide Part B
clinical laboratory services at fees below current Medicare payment
rates while maintaining quality and access to care.
The MMA specifically requires that the demonstration: (1) Includes
tests paid under the Medicare Part B Clinical Laboratory Fee Schedule;
(2) excludes entities that have a ``face-to-face encounter'' with the
patient; (3) excludes Pap smears and colorectal cancer screening tests;
and, (4) includes requirements under the Clinical Laboratory
Improvement Amendments (CLIA) program. An initial Report to the
Congress was submitted April 2006.
Site(S): The fundamental criteria for selecting demonstration sites
require that each Metropolitan Statistical Area (MSA) allows for
potential Medicare program savings from the demonstration, is
administratively feasible, represents the laboratory market, and will
yield demonstration results that can be generalized to other MSAs.
The first demonstration site will be the San Diego-Carlsbad-San
Marcos, California MSA.
A Bidders Conference is planned for October 31, 2007 in the San
Diego-Carlsbad-San Marcos, California MSA.
The demonstration covers tests provided to beneficiaries enrolled
in the traditional fee-for-service (FFS) Medicare program who reside in
the area of the demonstration site or competitive bid area (CBA) during
the 3 year demonstration period. Beneficiaries who travel outside the
CBA during the demonstration period and require laboratory services
will be able to access services from most laboratories in the United
States. We will not directly pay, however, for services furnished by a
required bidder that did not bid or bid and did not win or a non-
required bidder that bid and did not win. (The terms ``required
bidder'' and ``non-required bidder'' are explained in section II
below.) Laboratories may not bill beneficiaries for laboratory services
covered under the Medicare program.
FOR FURTHER INFORMATION CONTACT: Linda Lebovic at (410) 786-3402 or
lab-- bid --demo@cms. hhs.gov. Interested parties can obtain
information about the demonstration project on the CMS Web site at
http://www.cms.hhs.gov/ DemoProjectsEvalRpts/ downloads/2004--
Demonstration-- Competitive-- Bidding-- Clinical-- Laboratory--
Services.pdf.
SUPPLEMENTARY INFORMATION:
I. Background
Section 302(b) of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) (Pub. L. 108-173) amends section
1847(e) of the Social Security Act (the Act) (42 U.S.C. 1395w-3) --
``Competitive Acquisition of Certain Items and Services,'' to include a
demonstration project for clinical laboratory services. The statute
requires the Secretary of Health and Human Services to conduct a
demonstration project on the application of competitive acquisition for
payment of clinical laboratory services that would otherwise be made
under Medicare Part B Clinical Laboratory Fee Schedule.
II. Provisions of the Notice
Under section 1847(e) of the Act, Pap smears and colorectal cancer
screening tests are excluded from this demonstration. Requirements
under CLIA as mandated in section 353 of the Public Health Service Act
apply. The aggregate amounts to be paid to contractors in a competitive
acquisition area are expected to be less than the aggregate amounts
that would otherwise be paid under the laboratory fee schedule. The
payment basis determined for each competitive acquisition area will be
substituted for payment under the existing Medicare Part B Clinical
Laboratory Fee Schedule. The demonstration period is 3 years for each
demonstration site or ``competitive bid area'' (CBA). The competitively
set demonstration fee schedule will be used to pay for laboratory
services in the CBA for the duration of the 3-year demonstration
period. Multiple winners are expected in each CBA.
Required bidders are defined as those organizations that will
supply, or expect to supply, at least $100,000 annually in
demonstration tests to Medicare beneficiaries residing in the CBA
during any year of the demonstration. Required bidders that bid and win
will be paid under one demonstration fee schedule for services provided
to beneficiaries residing in the CBA for the duration of the
demonstration.
Non-required bidders are defined as laboratories that are not
exempt from the demonstration, but have the option of participating in
the bidding process. Non-required bidders that do not bid as well as
those that bid and win, will be paid under the demonstration fee
schedule for the duration of the demonstration. These laboratories will
be paid under the same fee schedule as the winning required bidders.
Non-required bidders that choose to bid and
[[Page 58857]]
do not win will not receive payment for services provided to
beneficiaries residing in the CBA for the duration of the demonstration
period.
A non-required bidder is:
A small business laboratory, which we are defining as one
that will supply less than $100,000 annually in demonstration tests to
Medicare FFS beneficiaries residing in the CBA during each year of the
demonstration. These laboratories may choose to be a ``passive''
laboratory. A passive-small business laboratory will have a $100,000
ceiling on annual payment from Medicare for demonstration tests for the
duration of the demonstration.
A laboratory that exclusively serves beneficiaries
entitled to Medicare because they have end-stage renal disease (ESRD)
residing in the CBA may choose to be a ``passive'' laboratory under the
demonstration. A passive-ESRD laboratory may continue to provide
services to ESRD beneficiaries residing in the CBA and receive payment
from Medicare for demonstration tests paid under the competitively set
Part B Clinical Laboratory Fee Schedule (demonstration fee schedule)
for the duration of the demonstration.
A laboratory that exclusively serves beneficiaries
residing in nursing homes or receiving home health services in the CBA
may choose to be a ``passive'' laboratory under the demonstration. A
passive-nursing home laboratory may continue to provide services to
beneficiaries residing in nursing homes or receiving home health
services in the CBA and receive payment from Medicare for demonstration
tests paid under the demonstration fee schedule for the duration of the
demonstration.
This notice announces a ``Bidder's Conference'' to be held in the
San Diego-Carlsbad-San Marcos, California MSA on October 31, 2007 for
potential bidders to learn about the demonstration rules and ask
questions about the bidding process. A Bidder's Package provides
information about the demonstration project and is available to the
public on the CMS project Web site. There will be a single bidding
competition covering demonstration tests for each CBA. Bidders will be
required to submit a bid price for each Health Care Procedure Coding
System (HCPCS) code in the demonstration test menu. Bidding
laboratories will be asked to identify demonstration tests that they do
not perform, and will be asked to explain their plans for responding to
requests for demonstration tests that they do not perform in house (for
example, subcontracting and referrals). As part of their bid,
laboratories will provide information on ownership, location of
affiliated laboratories and specimen collection sites, CLIA
certification, laboratory finances, and quality.
III. Collection of Information Requirements
This information collection requirement is subject to the Paperwork
Reduction Act of 1995 (PRA). The collection is currently approved under
OMB control number 0938-1008 entitled ``Medicare Clinical Laboratory
Services Competitive Bidding Demonstration Project Application Form''
with a current expiration date of January 31, 2009.
Authority: Section 302(b) of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (MMA).
(Catalog of Federal Domestic Assistance Program No. 93.773
Medicare--Hospital Insurance Program; and No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: October 4, 2007.
Kerry Weems,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. E7-20499 Filed 10-16-07; 8:45 am]
BILLING CODE 4120-01-P