Yesterday was big news for the lab industry as Senate passed the “The Medicare Improvement for Patients and Providers Act of 2008” (HR 6331).” This bill includes repeal of the Medicare Laboratory Competitive Bidding Demonstration Project. Because the House passed this bill last month, it means the bill now moves to the President for his signature or veto.

Also included in this Medicare funding bill for 2008 are a reversal of the 10.6% cut in Medicare physician reimbursement and an 18-month extension of the “TC Grandfather clause” (which covers independent laboratories located outside a hospital that provide technical component [TC] pathology services furnished to hospital patients). On July 1, 2008, the Medicare physician fee cut of 10.6% took effect. Also on July 1, the Centers for Medicare and Medicaid Services (CMS) implemented “a policy to pay only the hospital for the technical component (TC) of physician pathology services furnished to hospital patients.”

Thus, this Medicare funding bill represents a significant victory for pathologists and the laboratory industry. It is known that the President opposes this Medicare bill, as passed, because it would cut funding for Medicare Advantage insurance plans. However, both the vote in the Senate (69-30 in favor) and the House (355 to 59 in favor) indicates the likelihood that, were the President to veto this bill, there enough votes to probably override that veto.

In the meantime, some attorneys have advice to independent laboratories that provide TC services to Medicare inpatients. They suggest that these labs hold claims originated since July 1, 2008. Once the Medicare funding bill, with the 18-month extension of the TC grandfather clause becomes law, they should be able to submit those claims and be reimbursed.