(1) The Centers for Medicare & Medicaid Serv-
ices of the Department of Health and Human Serv-
ices (HHS) estimated that there are approximately 
5,200 independent clinical laboratories in the United 
States. 
(2) Independent clinical laboratories provide 
$16.3 billion in Medicare services to many of the 40 
million-plus Medicare beneficiaries in the United 
States. 
(3) The laboratory results allow health care 
professionals to make important diagnosis of their 
patients. While the tests performed by clinical lab-
oratories account for less than 2 percent of Medicare 
expenditures, they influence as much as 70 percent 
of medical decision-making. 
(4) Small labs often operate 24 hours a day, 7 
days a week to respond to hospital, nursing home, 
physician practices, and urgent emergency care situ-
ations. 
(5) Nearly 5,000 independent clinical labora-
tories are classified as small business concerns by 
the Small Business Administration. 
(6) A wide variety of independent clinical labs 
exist in the marketplace and serve the important 
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function of providing prompt access to diagnostic in-
formation that is crucial to decision-making. 
(7) Most small independent clinical laboratories 
receive 40 percent of their revenue from Medicare. 
(8) The fee schedule and the formula for deter-
mining payment amounts for Medicare services were 
established in 1984.
Although payment rates have 
changed over the past 20 years, the basic method-
ology has not, and, according to many experts inside 
and outside of the laboratory community, the meth-
odology is considered outdated.
In deciding a pay-
ment formula, it must consider the potential
im-
pact on small laboratories as well as access to serv-
ices for health care professionals and the Medicare 
beneficiaries. 
(9) Competitive bidding would reduce the num-
ber of lab service providers in the market, lessening 
the diversity of labs currently competing by forcing 
smaller labs out of business, and ultimately creating 
monopolies. The current diversity among clinical lab-
oratories has fostered price competition and ensured 
patient access to lab services. Allowing the market-
place, rather than the Federal government, to drive 
competition will spur innovation and safeguard pa-
tient access to lab services. 
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(b) POLICY.—It is the policy of the United States 
to— 
(1) promote and encourage competition in the 
market; 
(2) preserve the vibrant and competitive free 
market that presently exist among independent clin-
ical laboratories; and 
(3) encourage the continuation of industry best 
practices that guarantee patient access to quality 
laboratory services. 
SEC. 3. REPEAL OF MEDICARE COMPETITIVE BIDDING 
DEMONSTRATION PROJECT FOR CLINICAL 
LABORATORY SERVICES. 
(a) IN GENERAL.—Section 1847 of the Social Secu-
rity Act (42 U.S.C. 1395w–3) is amended by striking sub-
section (e). 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on the date of the enact-
ment of this Act. 
(c) REPORT.—The Administrator of the Centers for 
Medicare & Medicaid Services shall submit to issue a re-
port to the Committee on Small Business of the House 
of Representatives and the Committee on Small Business 
and Entrepreneurship of the Senate providing an analysis 
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of the impact of competitive bidding on small clinical lab-
oratories. 
SEC. 4. SMALL BUSINESS ADVOCACY REVIEW PANELS. 
Section 609(d) of title 5, United States Code, is 
amended by striking ‘‘and the Occupational Safety and 
Health Administration of the Department of Labor’’ and 
inserting ‘‘, the Occupational Safety and Health Adminis-
tration of the Department of Labor, and the Centers for 
Medicare & Medicaid Services of the Department of 
Health and Human Services (solely with respect to its ca-
pacity to issue rules governing the Medicare part B fee 
schedule for clinical laboratory services)’’. 
Æ 
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