News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel

News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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Progressive pathologists and lab leaders are looking ahead to the day when fee-service reimbursement is replaced by budgeted payment and similar arrangements

SAN DIEGO, CALIFORNIA—More than 100 clinical laboratory owners and lab executives gathered here this week for the annual meeting of the California Clinical Laboratory Association (CCLA). Because the medical laboratory testing marketplace in California is often a bellwether for trends that go national, the presentations were timely and of universal interest to lab professionals working in other regions of the United States.

The membership of CCLA certainly reflects the broader changes happening in the clinical laboratory industry nationally. Whereas a decade or two ago, the majority of CCLA members were independent lab companies providing routine lab testing services to office-based physicians, today the larger share of CCLA members are associated with lab companies that offer patent-protected or proprietary specialty tests.

California’s Flourishing Regions for Biotech Developments

That is not surprising. California has flourishing biotech communities. In the south, they are found in San Diego, Orange, and Los Angeles counties . In the north, it is the Silicon Valley and the San Francisco Bay Area. Academic centers and tech companies are competing to identify and develop useful biomarkers and develop technologies for sequencing genes and interpreting the resulting data.

But square one for every clinical laboratory company in California is to get paid for the lab tests they perform. That makes it a priority to file clean claims that payers accept at first submission.

This was the subject of a pre-conference workshop that provided attendees with presentations from Xifin; Noridian Healthcare Solutions; Palmetto GBA; Xerox State Healthcare, LLC, which administers the Medi-Cal program; and the law firm of Hooper, Lundy, & Bookman.

Changing Requirements for How Medical Labs File Claims

One point of agreement among all speakers from these organizations is that there are a growing number of changes in how claims for clinical laboratory tests and anatomic pathology services are to be submitted to public and private payers. Thus, it is essential for labs to stay current with changing payer policies and carefully pursue each claim that is submitted.

One issue related to getting paid for lab tests is patient-centered care, including how labs collect higher deductibles, co-pays, and out-of-pocket monies from patients. This is a major challenge for all medical laboratories for a simple reason. Almost all laboratory information systems (LIS) lack the capabilities to track the specimens, lab test results, and billing/collection status of individual patients. That’s because they were originally designed to help labs manage client accounts of physicians who referred specimens.

David Morre

At last week’s annual conference of the California Clinical Laboratory Association that took place in San Diego, David Moore (pictured above), Chief Information Officer of Sonora Quest Laboratories, urged clinical lab executives and pathologists to become a “patient-centric” provider of medical laboratory testing services. He explained to attendees why most existing laboratory information systems (LIS) do not have the capability to support patient-centric services. Moore explained how his laboratory organization has developed an enterprise-wide, master patient index (EMPI) as a solution to this problem. (Photo copyright of The Dark Report)

To address the challenge of how a lab makes the transformation from being volume-driven to value-added contributor, speaker David Moore, Chief Financial Officer at Sonora Quest Laboratories (SQL) in Phoenix, Arizona, discussed how his laboratory organization is building the infrastructure necessary to be a “patient-centric” provider of lab testing services. The cornerstone of this effort is an enterprise-wide, master-patient index (EMPI) that SQL developed in collaboration with Atlas Medical of Calabasas, California.

Medical Lab Builds Enterprise-Wide, Master-Patient Index

Few labs have an effective EMPI and it took considerable effort for SQL to get its EMPI up and running. But the EMPI is now the essential tool that enables the lab to establish and deliver patient-centric services. “As one example, our EMPI has helped us with problems associated with the use of social security numbers (SSN) as part of patient identification,” stated Moore.

“Our experience explains why a social security number can be a problem in patient identification,” he explained. “Based on 15 million lab test orders over the past 28 months, there was a value in the SSN field just 33% of the time. Next, of those 5 million SSNs that were included in the test requisitions, we could see that almost 70% were bogus or inaccurate.

“We regularly find SSNs that are consecutive digits, like 123-45-6789 or all the same digit,” observed Moore. “In other cases, the same SSN shows up repeatedly. This is a sign of identity theft or, as is common in Arizona, individuals will purchased a false identity and the provider of that identity sells the same SSN to all of his or her customers.

Social Security Number Lacks Weight as a Patient ID Component

“It is easy to see why, for us, use of the social security number has no weight as a component in establishing patient identification,” he added. “In collaboration with Atlas Medical, we spent three months designing algorithms to give our EMPI a high rate of accuracy.

“This was done by taking a holistic approach to data analysis,” continued Moore. “We developed probabilistic rankings for first name/nicknames matched with last names. We also compare incoming data from the EMRs (electronic medical record) of ordering clients to flag changes by using chart IDs as one key. At the end of the development process, we had processed 12.5 million accessions and had identified 3.6 million unique patients,” he said.

With the EMPI now in place, the team at Sonora Quest Laboratories is now reaching out to deliver value to clinicians in useful ways. “One idea is to receive discharge summaries from the hospitals we serve and setup a watch list based on our EMPI for the patient,” noted Moore.

Using EMPI to Create Value-Added Medical Lab Test Services

“Whenever a clinical lab test order is entered into the system for a patient in our lab EMPI, we can send a secure message to the care team alerting them to the upcoming encounter,” he explained. “The team can then follow up with the patient to understand the reason for the test and intervene if needed. We are excited about this opportunity to deliver more value and are working through some compliance issues before we initiate this service.”

Other speakers at the CCLA conference tackled the important subjects of:

  • How last Tuesday’s national election will change the landscape for clinical laboratories and anatomic pathology groups;
  • Changes now happening at the Food and Drug Administration on laboratory-developed tests (LDTs); and,
  • What the Centers for Medicare & Medicaid Services is expected to do to implement specific elements of the “Protecting Access to Medicare Act of 2014” (PAMA).

Clinical Laboratory Owners Seemed Guardedly Optimistic

The mood at the conference was one of guarded optimism. The clinical laboratory owners and lab executives in attendance understand that change is unfolding across all of healthcare in these United States.

Still, as your Dark Daily editor reminded the attendees in his presentation, despite all these changes, “there are 320 million Americans who will continue to get the medical laboratory tests they need. The goal is to make sure that your clinical lab organization evolves intelligently by contributed, recognized value, thus ensuring that your lab remains financially viable and survives healthcare’s transformation.”

Your Dark Daily Editor,

Robert L. Michel


Related Information:

California Clinical Laboratory Association

Program topics and speakers for the 2014 Annual Meeting of the California Clinical Laboratory Association

California Clinical Laboratory Association sues HHS over local coverage determinations

Changing Reimbursement for Clinical Pathology Laboratory Testing and Direct-to-Consumer Testing Discussed at California Clinical Laboratory Association Conference in San Diego

Executive War College on Lab and Pathology Management