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Latest Updates and Federal & State Actions By: Mark S. Birenbaum, Ph.D. Administrator American Association of Bioanalysts (AAB) National Independent Laboratory.

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Presentation on theme: "Latest Updates and Federal & State Actions By: Mark S. Birenbaum, Ph.D. Administrator American Association of Bioanalysts (AAB) National Independent Laboratory."— Presentation transcript:

1 Latest Updates and Federal & State Actions By: Mark S. Birenbaum, Ph.D. Administrator American Association of Bioanalysts (AAB) National Independent Laboratory Association (NILA) May 2011.

2 Founded in 1956 Members Directors, Owners, Managers, Supervisors Laboratories (NILA) Associate Members (MTs, MLTs)

3 AAB Proficiency Testing Service (PTS) Operating since 1949 Founded American Board of Bioanalysis (ABB) in 1968

4 AAB Special Interest Group Members are Laboratories Focus on Ownership and Senior Management Founded in 2006

5 Loosely Structured Coalition that Addresses Reimbursement Issues Launched in 1995 at the Suggestion of Robert Waters/Mark Birenbaum

6 Members Laboratory Associations 1.American Association of Bioanalysts (AAB) 2.American Association for Clinical Chemistry (AACC) 3.American Clinical Laboratory Association (ACLA) 4.American Medical Technologists (AMT 5.American Society for Microbiology (ASM) 6.American Society for Clinical Pathology (ASCP) 7.American Society for Clinical Laboratory Science (ASCLS) 8.Clinical Laboratory Management Association (CLMA) 9.College of American Pathologists (CAP) 10.National Independent Laboratory Association (NILA)

7 Members Other Health Care Associations 1.Advanced Medical Technology Association (AdvaMed) 2.American Health Care Association (AHCA) 3.American Hospital Association (AHA) 4.American Medical Association (AMA) [on occasion] Individual Laboratories/Clinics 1.Sonic - USA 2.Quest 3.LabCorp 4.Others (varies)

8 Major Accomplishments Include: Successfully Opposed Reimposition of 20% Part B Copayment Successfully Opposed CMS’s Competitive Bidding Demonstration Project Successfully Opposed CMS Requirement for Physician Signatures on Part B Requisitions.

9 Unanimity Among CLC Members CLC Added Participants (AMA, AHCA, etc.) Use of YouTube Video Prepared by Annette Iacono (Brookside Laboratory)

10 History New York’s Clinical Laboratory Evaluation Program (CLEP) paid for by inspection and reference fees assessed on permitted laboratories. The fees collected are supposed to equal the cost of the CLEP program. Each laboratory pays a percent of CLEP’s expenses equal to that laboratory’s percent of New York Laboratory revenues.

11 History, continued From 1980s to mid-1990s, CLEP’s cost rose from about $3 million to $6 million per year (Inflation grew about 55-60% during that time). Over a 2 to 3 year period in the mid-1990s, CLEP expenses nearly tripled, from $6 million to over $15 million. In 1998, AAB formally inquired as to the reason for the large increase.

12 History, continued AAB discovered that many expenses being charged by CLEP were clearly inappropriate. After NYSDOH refused to return overpayments, AAB filed suit in 1999.

13 History, continued During discovery phase of litigation, AAB discovered: Many expenses charged by CLEP were unrelated to regulating clinical laboratories. NYSDOH failed to keep accurate records of some CLEP expenses.

14 History, continued After 7 years of litigation, trial court ruled in AAB’s favor and ordered NYSDOH to recalculate CLEP fees correctly and refund overpayments. NYSDOH appealed lower court rulings over next 5 years. In February 2011, NYSDOH exhausted its appeals.

15 Final Result After recalculating CLEP fees from , NYSDOH determined that 78% of the CLEP fees should be returned. CLEP fees returned totaled $5,041, to 35 laboratories represented by AAB. Refund checks were cut on March 28-30, 2011.

16 The Money Trail: Total CLEP fees collected from 1998 to 2006 were approximately $123 million. 78% of $123 million = $96 million Interest of 4% on $96 million (from ) estimated at $17 million Total income for NYSDOH, including time value of money, = $96 million + 17 million = $113 million Fees Returned = $5 million Total Retained “unearned” income for NYSDOH = $108 million

17 The Money Trail:, continued NYSDOH did NOT have to pay interest on returned money. NYSDOH did NOT have to pay AAB’s legal expenses. NYSDOH did NOT reprimand, discipline, or terminate any officials responsible for overcharges. Several NYSDOH employees who criticized CLEP’s overcharges suffered negative consequences.

18 Lessons: Beginning in the mid-90s, CLEP intentionally overcharged New York laboratories. The New York legislature did not penalize CLEP for this unauthorized behavior. Instead, the New York legislature granted new powers to CLEP.

19 Lessons:, continued The only way to combat this behavior is for the entire laboratory community to oppose it. Number of plaintiffs in AAB Lawsuit covering : 35 Number of plaintiffs in AAB lawsuit covering : 105 Number of laboratories regulated by CLEP:

20 Lessons:, continued As long as the majority of New York laboratories accept this behavior, it will continue and possibly worsen.


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