Medicare Part B spending for clinical laboratory services increased to $6.8 billion in 2007, up 1.6 percent from 2006, according to the latest data from the 2008 Medicare Trustees Report. The increase, however, is less than in 2006, when the spending rose 3.7 percent over the total for 2005.

The Medicare program covered 44.1 million enrollees in 2007. From 2002 to 2007, Part B lab spending increased an average 8 percent per year. Over the same period, total Part B spending rose 9.6 percent per year to reach $169.7 billion, or 1.3 percent of the gross domestic product (GDP). It is expected to reach $183.9 billion this year and to grow to about 4.1 percent of GDP by 2082. Meanwhile, total Medicare program expenditures increased 5.9 percent to reach $432 billion in 2007, compared with $408 billion in 2006.

Although the report projects an average annual growth rate of 6.2 percent in Part B costs over the next 10 years, the trustees note that this rate is unrealistically constrained by factoring in multiple years of physician fee reductions that would occur under current law (the SGR formula), including a cut of 10.6 percent that CMS projects for the second half of 2008. If Congress continues to override these reductions, as it has from 2003 through the first half of 2008, the Part B growth rate would average approximately 8 percent.

"Actual future Part B costs will depend on the steps Congress takes to address the situation but could exceed the current-law projections by 7 to 8 percent in 2010 and by roughly 10 to 20 percent for 2030 and later," the report stated.

Additional analysis of the recent Medicare Part B data will be featured in the May issue of Laboratory Industry Report.