CoPay

1
Co-Pay

• Kathy Hansen
• ASCLS GAC Chair

2
Co-Pay Background

• Many Medicare outpatient services require a 20
  co-pay paid by the beneficiary.
• Laboratory tests paid via the Medicare Clinical
  Laboratory Fee Schedule have not required a
  co-pay since 1984 when the fee schedule was
  implemented.
• Part of the trade-off for implementation of the
  fee schedule was an understanding that there
  would be no co-pay.

3
Purposes of Co-Pay

• Congress sees the imposition of a co-pay as a
  source of significant savings to the Medicare
  budget (estimated at 18 billion over ten years).
• CMS sees the co-pay as a method of controlling
  test utilization.

4
Laboratory Perspective

• A co-pay represents a significant added
  administrative burden to issue a large number of
  invoices for very small amounts.
• Co-pay for 83 of the top 100 tests would be less
  than 3.00
• Non-collection rate for these small invoices is
  likely to be high.
• Double whammy for labs added cost of billing
  and decreased reimbursement due to bad debt.

5
Co-Pay and Test Utilization

• CMSs goal of controlling utilization is unlikely
  to happen. Patients have little control or
  influence over which tests are ordered.
• Co-pay may result in seniors foregoing needed
  tests to the detriment of their health status,
  and result in higher downstream costs.

6
IOM Recommendations

• A study of the Medicare laboratory payment system
  by the Institute of Medicine (IOM) recommended
  that co-payments
• could create barriers to access for the most
  vulnerable Medicare beneficiaries
• including dialysis patients, disabled persons,
  and the sickest seniors.

7
Whats happening now with co-pay?

• The Senate version of the Medicare Modernization
  Act (MMA) of 2003 contained provisions for a
  co-pay. The House version did not.
• After much advocacy by laboratory groups, the MMA
  as finally passed did not include the co-pay, but
  instead contained the 5-year freeze on the fee
  schedule that is currently in place.

8
Have we heard the last?

• The good news The Bush administration proposed
  budget for 2006 does not contain a provision to
  bring back the co-pay
• The caution The huge federal deficit means that
  Congress will look for every opportunity to save
  money. It is more than possible that we will
  have to fight a co-pay proposal again.