Medical labs must comply with PAMA lab test price market reporting in 2017, while pathologists will see big changes in Medicare physician payments because of MIPS
It is now budget-planning season for the medical laboratories of hospital and health systems. This fall, lab administrators report grim news as they try to anticipate all the changes coming to the clinical laboratory industry in 2017—just 11 weeks away.
There is a growing consensus among lab executives and pathologists who are the business leaders of their groups that labs will not see any relief in 2017 to the multi-year decline in lab test prices that actually intensified in the past 24 months.
One factor is their assessment of the coverage and pricing decisions being made by the federal Centers for Medicare & Medicaid Services (CMS) and Medicare Administrative Contractors (MACs) for specialty lab tests. The other factor is their experience with private payers who continue excluding local clinical labs from narrow networks and who insist on price cuts when managed care contracts are renewed.
But that is not all that is expected to make 2017 a particularly difficult year for both clinical labs and pathology groups. Several new laws and federal regulations become effective on January 1, 2017. Probably the most significant of these is Protecting Access to Medicare Act of 2014 (PAMA) lab test reporting.
Experts Explain New Regulations and Managed Care Contracting Challenges
Two respected lab industry experts are deeply involved in helping their lab and pathology clients prepare for all the different challenges labs will face at the start of 2017. These range from new regulatory requirements to significant managed care contracting changes.
Anatomic pathologists will deal with all of these issues, plus another that is uniquely focused on their Medicare professional compensation—the new rule for Medicare’s Merit-based Incentive Payment System (MIPS) that starts on January 1, 2017, and will require physicians to participate in order to earn incentives and avoid financial penalties. MIPS is a change mandated by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).
In an interview with Dark Daily, attorney Richard S. Cooper of McDonald Hopkins and attorney Jane Pine Wood, formerly of McDonald Hopkins and, as of October 1, Chief Legal and Compliance Officer of BioReference Laboratories, Inc., discussed the growing list of issues that will change for the clinical laboratory industry in 2017. These include legal, regulatory, and compliance requirements, along with important managed care contracting changes, and tougher payers audits of labs and pathology groups.
“Yes, it is true that labs face tough new regulations and managed care contracting challenges starting on January 1,” stated Cooper. “Keep in mind that, along with implementation of the PAMA lab test market price reporting final rule that affects many independent labs, there is pressure from private payers for labs and pathology groups to accept lower prices when they renew managed care contracts.”
Understanding the Key Issues
Because there are so many important changes that will happen at the beginning of 2017, Dark Daily has scheduled a special webinar to help clinical lab managers, pathologists, and their business advisors, understand these key issues. Also included will be recommendations on how labs should prepare to comply with the new legal and compliance requirements, as well as strategies that can help them stay ahead of health insurers when negotiating renewals to managed care contracts.
The webinar is titled, “Preparing for 2017’s Tougher Lab Regulations and New Legal Issues: What Every Lab and Pathology Group Needs to Know to Protect Revenue and Stay Compliant.” It will take place on Wednesday, October 12, 2016, at 1PM EDT.
Three experts will present during the webinar. Leading the webinar are:
1. Jane Pine Wood, who recently became Chief Legal Counsel and Chief Compliance Officer of BioReference Laboratories; and
2. Richard S. Cooper, Attorney and Partner with McDonald Hopkins.
3. Joining them will be Elizabeth Sullivan, also an attorney at McDonald Hopkins.
Identifying Language in Managed Care Contracts That Can Reduce Revenue
Each fall in recent years, Dark Daily has arranged for Wood and Cooper to provide lab administrators and pathologists with a concise and comprehensive overview of the legal, regulatory, and managed care issues that will happen on January 1 of the coming year. It is one of the best-attended webinar events and earns high accolades from participants.
One of the important topics to be discussed during the upcoming October 12 webinar is the language that clinical labs and pathology groups have in their managed care contracts. The wrong language in these contracts can mean that labs take a double hit on their revenue—a hit that can mean tens of thousands if not hundreds of thousands of dollars less in payments from private health insurers.
This will happen as Medicare lowers Part B clinical laboratory test fees on January 1, 2018 (based on the PAMA lab test price data it receives from certain labs in 2017), and private payers adopt the same pricing. For labs that have not amended the pricing language in their managed care contracts, it could mean that they could be paid even less than the lower Medicare prices in 2018 and beyond.
Other Critical Topics to Be Discussed
Additional topics to be covered during the October 12 webinar are as follows:
• PAMA Market Price Reporting: Most clinical laboratories and pathology groups are already behind the eight-ball in meeting the final rule’s requirements for lab test market price reporting. Get exclusive insights about the processes your lab needs to put in place right away, and in 2017.
• ADLTs/LDTs: Should you pursue Advanced Diagnostic Laboratory Test (ADLT) status with your molecular and genetic testing? What are the benefits of pursuing this path? The stumbling blocks? Plus, hear important updates about the status of the regulation of Laboratory Developed tests (LDTs).
• Audit Activity by Private Payers: Expect enlightening discussion about the increased frequency of audits, the items being focused on, and the tactics being used, with plenty of valuable insights on how your lab can mitigate your audit risk, as well as steps to take in order to effectively respond to an audit.
• Medicare/Medicaid: Medicare payments will likely be very different in the future, with rates certain to fall. Now is the time to begin looking at your payer contracts and your client billing contracts—learn what to check for and the actions to take.
• Direct-to-Consumer Testing: DTC testing faces scrutiny from a number of angles and entities, with the Food and Drug Administration (FDA) taking the lead role. But what about state laws? Hear little-known facts about the intricacies and pitfalls of reaching out with laboratory services directly to patients.
Another reason why this webinar will be significant: it is an opportunity for clinical lab professionals and pathologists to hear Jane Pine Wood’s advice, counsel, and insights, as she transitions from a private practice attorney at McDonald Hopkins to Chief Legal Officer at BioReference Laboratories in Elmwood Park, New Jersey. Many of her long-time clients will be joining the webinar to hear her and also wish her well as her career goes in a new direction.
To register for this webinar, go to https://ddaily.wpengine.com/audio-conferences/preparing-for-2017s-tougher-lab-regulations-and-new-legal-issues-what-every-lab-and-pathology-group-needs-to-know-to-protect-revenue-and-stay-compliant-1012.