CCLA Issues Press Release: Palmetto Genetic Test Rates Could Bankrupt CA Genetic Labs

In response to Palmetto’s recently-released MoPath pricing, the California Clinical Laboratory Association has issued the following press release:

PALMETTO GENETIC TEST RATES COULD BANKRUPT CA GENETIC LABS, FORCE THOUSANDS OUT OF WORK, AND SLOW THE ADVANCES IN PERSONALIZED MEDICINE.

CCLA Calls Emergency Board Meeting to Create Crisis Response Plan

The California Clinical Laboratory Association (CCLA) has scheduled an emergency board meeting in response to genetic test reimbursement rates announced last week by Palmetto GBA.  Palmetto, the outgoing Medicare contract administrator for California and several other states, upended the clinical laboratory industry last week by announcing surprise reimbursement rates that in many instances are below the costs of doing the tests.  The impact of this development could force clinical laboratories performing genetic testing to close their doors–reducing patient access to these important new clinical laboratory tests.

“These new reimbursement rates for molecular and genetic testing have no relationship to reality. They will result in lab closures, lost jobs and a reversal of recent advances in personalized medicine,” said Michael Arnold, CCLA Executive Director. “Patient access to many life-saving genetic and molecular tests may no longer be available.”

CCLA is the state association representing licensed clinical laboratories in California.  Clinical laboratory tests comprise only 3-5% of healthcare spending, yet drive more than 70% of clinical care decisions. This robust industry has long been recognized as a significant economic engine within the State. These new rates of reimbursement for the tests developed by this industry will kill this important economic engine. For many of the tests, the new reimbursement rate does not even cover the costs of the reagents, labor and equipment needed to conduct the tests.

Such a reimbursement structure will kill all incentive for businesses to engage in the necessary research and development required to bring these important tests to the health care marketplace.

CCLA is calling an emergency meeting of the Board of Directors to determine how best to respond to what could be the death knell for California’s genetics/molecular testing industry.

FOR IMMEDIATE RELEASE
CONTACT: Michael Arnold, CCLA Executive Director, (916) 446-2646
SACRAMENTO, CA

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Source: Press Release, CCLA, February 7, 2013