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Public Statements

Statements On Introduced Bills And Joint Resolutions

Floor Speech

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Date:
Location: Washington, DC

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By Mr. SPECTER (for himself and Mr. Wyden):

S. 1220. A bill to require that certain complex diagnostic laboratory tests performed by an independent laboratory after a hospital outpatient encounter or inpatient stay during which the specimen involved was collected shall be treated as services for which payment may be made directly to the laboratory under part B of title XVIII of the Social Security Act; to the Committee on Finance.

Mr. SPECTER. Mr. President, I have sought recognition today to introduce The Patient Access to Critical Lab Tests Act. The legislation would modernize Medicare billing rules to improve beneficiary access to important, life-saving advanced diagnostic technologies.

Mapping the human genome has enabled revolutionary advances in understanding a wide variety of diseases, and ushered in an era where treatments can be tailored to individual patients based on their DNA and specific molecular character of their disease. Complex diagnostic laboratory tests make such ``personalized medicine'' possible. By understanding the molecular nature of disease, these new technologies increasingly allow clinicians and patients to pick individualized treatment options, rather than basing treatment choices on broad assessments of what works best for a population.

Unfortunately Medicare payment, coding and coverage practices are harming Medicare beneficiary access to specialized diagnostic tests. In particular is the Centers for Medicare and Medicaid Services, CMS, Medicare ``date of service'' regulation. Under the regulation, any test furnished within 14 days after the patient's discharge from a hospital is deemed to have been performed on the day of collection, when the patient was in or at the hospital, even though the patient may no longer be at the hospital when the test is ordered, and the test is not used to guide treatment during the patient's hospital encounter. A laboratory test that is deemed to coincide with the date on which the patient was a hospital patient becomes a service furnished by the hospital, even though the hospital may have nothing to do with the ordering, performance, or use of the test.

The combination of these rules creates a host of administrative and financial disincentives for hospitals to embrace these tests.

Hospitals are required to exercise professional responsibility over these services, but are unwilling to do so for tests that are not offered by the hospital, and which are, in fact, offered by laboratories that are otherwise unaffiliated with and unfamiliar to the hospital.

Hospitals are required to bill for the service; the laboratories may not bill Medicare directly, and instead must bill the hospital for the services they provide, which means the hospital assumes the financial risk that the service is covered and that Medicare will pay for it.

In light of these administrative and financial disincentives, hospitals are encouraging physicians to delay ordering the tests until after the 14 days; others are cancelling orders altogether. These disincentives create obstacles for physicians and their patients, and genuine barriers to access these beneficial tests.

These rules also create substantial hardship for the laboratories that are seeking to develop these tests. In order for the tests to be covered, hospitals must enter into agreements with the laboratories furnishing the tests. It is administratively overwhelming for these small laboratories to seek to enter into agreements with all potential originating hospitals, which may number in the thousands when considering sites where tissue may be stored.

The legislation that I am introducing today with Senator Wyden would require CMS to take a small, but important step toward facilitating Medicare beneficiary access to innovative, life-saving diagnostic tests by updating the ``date of service'' regulation. Specifically, the Patient Access to Critical Lab Tests Act would permit independent laboratories offering complex diagnostic laboratory tests to bill Medicare directly for tests performed anytime following a patient's hospital stay, without forcing the hospital into an unnecessary middleman role.

Given the promise of these new technologies, it is important that all regulatory regimes keep pace with the rapidly evolving world of science and technology, and operate to promote innovation. Out-dated regulations and calcified regulatory agencies can stifle innovation and prevent new life-saving diagnostics and therapies from ever coming to market. They can also serve as a drag on our economy.

Fixing this rule is a matter of critical importance to Medicare beneficiaries, as well as to the laboratories developing these technologies.

I encourage colleagues to join Senator Wyden and me in cosponsoring this bill. I likewise urge Senators Baucus and Grassley to consider this important measure as part of health care reform.

Mr. President, I ask unanimous consent that the text of the bill be printed in the RECORD.

There being no objection, the text of the bill was ordered to be printed in the RECORD

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By Mr. SPECTER (for himself and Mr. Roberts):

S. 1221. A bill to amend title XVIII of the Social Security Act to ensure more appropriate payment amounts for drugs and biologicals under part B of the Medicare Program by excluding customary prompt pay discounts extended to wholesalers from the manufacturer's average sales price; to the Committee on Finance.

Mr. SPECTER. Mr. President, I have sought recognition today to introduce legislation that will help ensure Medicare beneficiaries' access to cancer drugs provided by community-based cancer clinics.

Cancer takes a great toll on our families, friends, and our Nation. On average, one American dies from cancer each minute and the overall cost of cancer to the U.S. is $220 billion annually. While these statistics are daunting, the rate of cancer deaths in the U.S. has decreased since 1993. This decrease is the result of earlier detection and diagnosis, more effective and targeted cancer therapies, and greater accessibility to quality care provided by oncologists. These vital services have allowed millions of individuals to lead healthy and productive lives after successfully battling cancer.

Leading the treatment against cancer, community cancer clinics treat 84 percent of Americans with cancer. Community cancer clinics are freestanding outpatient facilities that provide comprehensive cancer care in physician's office settings located in patients' communities. These clinics are especially critical in rural areas where access to larger cancer clinics is not available.

In 2003, the Medicare Prescription Drug Improvement and Modernization Act was signed into law. This legislation contained numerous provisions that were beneficial to America's seniors and medical facilities; however, it also provided a reduction in Medicare's reimbursement for cancer treatment. The new Medicare drug reimbursement rates, based on average sales price or ASP, are artificially lowered by the inclusion of prompt payment discounts. These discounts are provided by the pharmaceutical manufacturer to the distributor and are a financing mechanism between the manufacturer and the distributor for prompt payment of invoices. As such, they are not passed on to community oncology clinics, which purchase drugs from distributors. However, pharmaceutical manufacturers are required by statute to include all discounts and rebates in the calculation of ASP, including prompt payment discounts that are not provided to community oncology clinics. The inclusion of these prompt payment discounts results in the artificially lowering of Medicare drug reimbursement rates by approximately 2 percent. Community cancer clinics are reporting that they are finding more cancer drugs reimbursed by Medicare at a rate less than their cost.

The Congressional Budget Office estimated that Medicare reimbursements to oncologists would be reduced by $4.2 billion from 2004-2013. PricewaterhouseCoopers estimated that reductions will reach $14.7 billion over that time. This increased reduction will have a debilitating effect on oncologists' ability to provide cancer treatment to Medicare beneficiaries, especially those in the community setting.

This legislation will remove manufacturer to distributor prompt payment discounts from the calculation of ASP to provide a more appropriate Medicare drug reimbursement and will help ensure Medicare beneficiaries' access to community-based cancer treatment. I encourage my colleagues to work with me to move this legislation forward promptly.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

There being no objection, the text of the bill was ordered to be printed in the RECORD

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