Dec 11, 2017 | Coding, Billing, and Collections, Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Managed Care Contracts & Payer Reimbursement, Management & Operations
While proposals might change before the final CMS draft, lobbyists see potential for improving Medicare payment totals and structures in the upcoming 2018 outpatient rule and physician fee schedule
At this time, efforts by medical laboratories to lobby and educate Medicare officials and members of Congress about the flaws in the Medicare program’s market study of what private health insurers pay for clinical laboratory tests have failed to trigger positive action on this matter. But despite the bad news concerning that issue, there is a positive development with a proposed rule that would change which lab tests should be included in bundles paid under the Hospital Outpatient Prospective Payment System (OPPS).
The details of how the clinical laboratory industry worked to educate the right decision-makers within the federal Centers for Medicare and Medicaid Services (CMS) was part of a story published by Axios. The story described how several different healthcare specialties conducted educational and lobbying campaigns and succeeded in getting favorable decisions on the matters of concern.
Changing the Medicare 14-day Medical Lab Test Billing Schedule Regulation
Though the complete Axios article covers several categories of healthcare lobbying, “The Win for Clinical Labs” section lists lobbying activities in 2017 on behalf of the medical laboratory industry. It covers:
· “Who met with the feds: Lobbyists with lab testing companies Myriad Genetics and Veracyte, pharmaceutical company Boehringer Ingelheim, and lobbying firm Todd Strategy, federal meeting records show.
· “What they wanted: An open comment period on the ‘14-day’ regulation, likely with the goal of adjusting or eliminating it, according to a lobbying presentation.
· “The 14-day regulation stipulates that if lab tests are ordered within 14 days of a patient’s discharge from a hospital, the hospital must bill Medicare for the tests. The lab then seeks payment from the hospital. Anything after 14 days, the lab can bill Medicare directly.
· “The companies argued in the presentation that the rule limits access to lab tests because hospitals may be reluctant to bill Medicare for labs after patients leave.
· “What they got: An open comment period, and a modification to the policy that would allow labs to bill Medicare directly for some tests.”
One success slated to enter the OPPS relates to the 14-day rule/Date of Service (DOS) determinations, which set strict billing requirements for diagnostic tests based on when the tests are ordered. Medical laboratories, pharmaceutical companies, and lobbying strategists teamed up to streamline the current regulations and improve how billing works for a range of Advanced Diagnostic Laboratory Tests (ADLTs).
Lobbying participants included:
· Biodesix of Boulder, Colo.;
· Boehringer-Ingelheim of Ridgefield, Conn.;
· Guardant Health Inc. of Redwood City, Cali.;
· LUNGevity Foundation of Chicago;
· Myriad Genetics of Salt Lake City, Utah;
· Veracyte of South San Francisco.
The graphic above was taken from a May 2017 presentation to policymakers at HHS and CMS, which focused on delays created by the 14-day rule. It described existing determinations as “developed for the old world of hospital and reference laboratories.”
Presentation speakers also cited concerns that current payment requirements might limit access to testing and delay diagnosis. As precision medicine often involves major illnesses—such as cancer—swift testing, diagnosis, and treatment are essential parts of improving patient outcomes.
Results of the Lobbying Effort Could Bring Relief for Hospitals and Clinical Laboratories
CMS posted their proposed OPPS rules for 2018 in July and created an open comment period, which closed in September.
In analysis of the current proposed rules at Health Law and Policy Matters noted, “The proliferation of molecular pathology testing technology, coupled with the implementation of the packaging policy a few years ago, has strained relationships between many hospitals and laboratories.”
The analysis outlined three currently proposed approaches from CMS:
· The first crates exceptions to current DOS rules for molecular pathology tests and ADLTs under certain conditions.
· The second only applies exemptions to ADLTs citing a lack of “access to care” concerns for molecular pathology tests.
· The third adds an exception for molecular pathology tests and ADLTs excluded from OPPS packaging, but applicable to “under arrangements” rules.
Other Lobbying ‘Wins’
Axios noted two other potential wins related to this year’s lobbying efforts.
1. Fresenius Medical Care, owner of National Cardiovascular Partners, opened public debate regarding pay rates for heart procedures in outpatient heart labs and ambulatory surgery centers.
2. CMS and HHS awarded Photocure, manufacturer of Cysview (FDA-approved technology for the detection of bladder cancer), a proposal for add-on billing codes to increase pay for bladder cancer procedures using their drug solutions.
However, these are just proposals. There is no guarantee they will reach the final draft for 2018—if at all.
Lobbying Expensive but Gets Results
While lobbying is an important way to shape the regulatory landscape surrounding healthcare, it is time- and money-intensive. In the presentation from Todd Strategy, LLC, regarding the 14-day rule, the speakers established a timeline spanning two years of administration and congressional outreach. They also pointed out that similar requests were made in 2016 for the calendar year 2017 OPPS rules that were never implemented.
As healthcare continues to shift toward personalized approaches, and diagnostic testing becomes an increasingly important aspect of diagnosing and treating disease, laboratories and healthcare groups must continue to identify opportunities to both increase revenue and streamline operations to continue growing.
With innovative medical laboratory tests and new diagnostic technologies emerging at a rapid pace, the opportunity to use lobbying to educate lawmakers and government regulators continues to be a viable tool for clinical laboratories interested in speeding change and protecting the ability of clinical laboratories to serve physicians and their practices—particularly because the system is known for its complex requirements and slow-moving bureaucracy.
—Jon Stone
Related Information:
The Subtle Lobbying Wins in Medicare’s Outpatient Rule
Impact of Date of Service “14 Day” Rule on Diagnostics
Hospital Outpatient Prospective Payment – Final Rule with Comment and Final CY2017
14 Day Rule Frequently Asked Questions
CMS May Decide to Permit Labs to Bill for Certain Tests Provided to Outpatients
Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs
Your Quick Guide to Understanding the Weird 14 Day Rule (CMS Billing for Lab Tests)
Date of Service (DOS) for Clinical Laboratory and Pathology Specimens
Dec 6, 2017 | Instruments & Equipment, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory News, Laboratory Pathology, Laboratory Testing, Management & Operations
Proof-of-concept research investigates whether photoacoustic imaging can be used in place of traditional tissue staining procedures during cancer surgery to determine if all of the tumor has been removed
Determining where breast cancer ends and healthy tissue begins is a critical part of breast cancer surgery. Surgeons are used to working closely during surgery with anatomic pathologists who generate pathology reports that specify the surgical or tumor margin, an area of healthy tissue surrounding a tumor that also must be excised to ensure none of the tumor is left behind. This helps prevent the need for follow-up surgeries and involves quick work on the part of medical laboratories.
Thus, any technology that renders such a pathology report unnecessary, though a boon to surgeons and patients, would impact labs and pathology groups. However, such a technology may soon exist for surgeons to use during breast cancer surgery.
Assessing Tumor Margin with Light During Surgery
A proof-of-concept study undertaken by researchers at Washington University School of Medicine in St. Louis (WUSTL) and California Institute of Technology (Caltech) has been looking at ways photoacoustic and microscopy technologies could enable surgeons to quickly and accurately assess the tumor margin during breast cancer surgeries. The research suggests it could be possible for surgeons to get answers about critical breast tumor margins without employing a clinical laboratory test.
This new technique based on light and sound uses photoacoustic imaging. The researchers scanned a tumor sample and produced images with enough detail to show whether the tumor was completely removed during surgery, a WUSTL news release explained.
The researchers scanned slices of tumors secured from three breast cancer patients. They also compared their results to stained specimens.
The photoacoustic images matched the stained samples in key features, according to the WUSTL news release. And the new technology produced answers in less time than standard analysis techniques. But more research is needed before photoacoustic imaging is used during surgeries, researchers noted.
“This is proof of concept that we can use photoacoustic imaging on breast tissue and get images that look similar to traditional staining methods without any sort of tissue processing,” Novack added.
A new imaging technique based on light and sound produces images doctors can use to distinguish cancerous breast tissue (below the dotted blue line) from normal tissue more quickly than is currently possible. The new technique (right) produces images as detailed and accurate as traditional methods (left) but in less time, according to the researchers. If such technology were eventually approved for clinical use, it would reduce the need for pathologists to analyze frozen sections while a patient was still in surgery. (Caption and photo copyright: WUSTL/Terence T. W. Wong.)
Once ready, this technology may well change how surgeons and pathologists collaborate to treat breast cancer patients and those with other chronic diseases that include growths that must be excised from the body.
Current Pathology Procedures Take Time, Not Always Useful During Cancer Surgery
At present, standard breast cancer operation procedures involve surgical and pathology teams working simultaneously while the breast cancer patient is in surgery.
Excised tissue is frozen (surrounded by a polyethylene glycol solution), sliced into wafers, stained with a dye, and microscopically analyzed by the pathologist in the clinical laboratory to determine if all cancerous tissue has been removed by the surgeon.
“The procedure takes about 10 to 20 minutes. However, freezing of tissue can result in some distortion of cells and some staining artifact. That is why frozen sections are often preliminary—with a final diagnosis based on routine processing of tissue,” according to LabTestsOnline.
Additionally, fatty breast specimens do not make good frozen sections, which requires surgeons to complete procedures uncertain about whether they removed all of the cancer, the researchers noted.
“Right now, we don’t have a good method to assess margins during breast cancer surgeries,” stated Rebecca Aft, MD, PhD, Professor of Surgery at WUSTL and co-senior study author.
Up to 60% of Breast Cancer Patients Require Follow-up Surgeries
More than 250,000 people in the US are diagnosed with breast cancer each year, and about 180,000 elect to undergo surgery to remove the cancer and preserve healthy breast tissue, WUSTL reported. However, between 20% to 60% of patients learn later they need more surgery to have additional tissue removed when follow-up lab analyses suggest tumor cells were evident on the surface of a tissue sample, Caltech noted in a news release.
“What if we could get rid of the waiting? With three-dimensional photoacoustic microscopy, we could analyze the tumor right in the operating room and know immediately whether more tissue needs to be removed,” noted Lihong Wang, PhD, Professor of Medical Engineering and Electrical Engineering in Caltech’s Division of Engineering and Applied Science. Wang conducted research when he was a Professor of Biomedical Engineering at University of Washington’s School of Engineering and Applied Science.
“Currently, no intraoperative tools can microscopically analyze the entire lumpectomy specimen. To address this critical need, we have laid the foundation for the development of a device that could allow accurate intraoperative margin assessment,” the study authors penned in Science Advances.
What is Photoacoustic Imaging and How Does it Work?
Photoacoustic imaging’s laser pulses create acoustic waves within tissue, which make way for intraoperative images with enough detail to expose cancerous tissue as compared to healthy tissue, explained a Medgadget article.
The graphic above shows elements of the photoacoustic microscopy system for surgical margin imaging developed by researchers at University of Washington School of Medicine in St. Louis and California Institute of Technology. (Photo Credit: Science Advances)
According to the Caltech news release:
· Photoacoustic imaging (also called photoacoustic microscopy or PAM by the researchers) employs a low energy laser that vibrates a tissue sample;
· Researchers measure ultrasonic waves emitted by the vibrating tissue;
· Photoacoustic microscopy reveals the size of nuclei, which vibrate more intensely than nearby material;
· Larger nuclei and densely packed cells characterize cancer tissue.
“It’s the pattern of cells—their growth pattern, their size, their relationship to one another—that tells us if this is normal tissue or something malignant,” said Deborah Novack, MD, PhD, WUSTL Associate Professor of Medicine, Pathology, and Immunology, and co-senior author on the study.
Whether in surgical suites or emergency departments, technological advancements continue to bring critical information to healthcare providers at the point of care, bypassing traditional medical laboratory procedures that cost more and take longer to return answers. Successful development of this technology would create new clinical collaborations between surgeons and anatomic pathologists while improving patient care.
—Donna Marie Pocius
Related Information:
New Imaging Technique Aims to Ensure Surgeons Completely Remove Cancer
Understanding Anatomic Pathology
Cutting Down on Cancer Surgeries
Fast Label-Free Multilayered Histology-Like Imaging of Human Breast Cancer by Photoacoustic Microscopy
Optoacoustics May Allow Surgeons to See Tumor Margins, Accurate Incisions
Dec 4, 2017 | Laboratory Instruments & Laboratory Equipment, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Management & Operations
It’s all about convenience and offering consumers multiple services at a single location. That’s why certain clinical laboratory tests will soon be offered at CVS Health Minute Clinics
As predicted, operators of rapid clinics located in retail pharmacies and other retail stories are adding additional clinical services. In the case of CVS Health, it recently announced plans to add certain clinical laboratory testing services to its Minute Clinic locations.
Consumer demand is driving these decisions. After all, who doesn’t want to save time and money these days? Combining errands into as few trips as possible means getting more at each location. This imperative drove big-box stores Walmart (NYSE:WMT) and Target (NYSE:TGT) to combine their household lines with grocery products all under one roof, and customers loved it!
Thus, it was no surprise when pharmacy chains got in on the act by adding rapid care clinics to retail stores that already included health and beauty products, pharmaceuticals, and limited grocery items. This important trend has been written about by Dark Daily in previous e-briefings.
Now, during a second quarter earnings call, CVS Health revealed that they plan to expand their offerings at Minute Clinic locations to include services intended to help consumers manage chronic health conditions. The move could be considered part of the same trend—providing customers with more options at each visit. However, there’s more to it. The new services aim at empowering chronic disease suffers through population health management tools. For patients and caregivers of chronic disease patients, this could be quite beneficial.
But how will this impact medical laboratories and pathology groups, when patients realize they can employ tools that monitor their chronic conditions at convenient locations where they can likely fulfill other needs as well? Might this impinge on revenues from tests and specimen gathering procedures traditionally performed at clinical laboratories?
Demand for Low-Cost Quality Care Driving Growth in Retail Clinics
There are currently more than 1,100 Minute Clinics located inside CVS stores in 33 states and the District of Columbia. Headquartered in Woonsocket, R.I., CVS expects an escalation in the need for their Minute Clinic services due to:
· A shortage of primary care physicians;
· An increase in chronic diseases; and
· The aging US population.
CVS Health’s initial service offerings will help diabetes patients:
· Monitor glucose levels;
· Adhere to medication schedules, and,
· Modify their lifestyles through education.
During the next two years, CVS plans to add similar services at their Minute Clinic locations for other chronic conditions, including:
· Asthma;
· Depression;
· Hypercholesterolemia (high cholesterol); and,
· Hypertension.
The Minute Clinics operate seven days a week, with half of their patients seen in the evenings and weekends—times when most traditional medical offices are closed. CVS Health plans to open an additional 150 Minute Clinic locations within the next year.
Patients waiting to be seen by nurse practitioner Marti Wolfson (right) at a Minute Clinic in La Mesa, CA. CVS announced that it will introduce certain clinical laboratory testing services to its chain of rapid care clinics located in CVS retail pharmacies. (Photo copyright: San Diego Union Tribune/John Gastaldo.)
According to a report from the Robert Wood Johnson Foundation and Manatt Health Solutions, there are more than 1,800 retail clinics in the United States and CVS Minute Clinics hold more than 50% of the market. Access to walk-in appointments, convenience, extended hours of service, lower costs, and having no primary source of care are the most common reasons given by people who utilize services at the clinics.
“Patients are looking for easy access to care, good quality, and low cost,” Andrew Sussman, President, Minute Clinic, told the Boston Globe. “That’s part of what’s making us so successful.”
Retail clinics account for 10.5 million healthcare visits annually, which represent about 2% of primary care encounters in the country. The number of retail clinics in the US increased by 900% between 2006 and 2014 and is expected to continue to climb.
According to AMN Healthcare research, the most common reasons for visits to the clinics include:
· Diagnosis and treatment of new illnesses and symptoms;
· Vaccinations;
· Prescription renewals; and,
· Basic health screenings.
Other major players in the retail clinic industry include Walgreens Healthcare Clinic, Kroger Little Clinic, Walmart Retail Clinic, and Rite Aid RediClinic.
VA Now Referring Vets to Retail Clinics in Phoenix Area
In April, CVS Health, the Department of Veterans Affairs (VA), and TriWest Healthcare Alliance joined forces to improve access to health services for veterans in the Phoenix area. This initiative allows healthcare professionals at the Phoenix VA to refer veterans to Minute Clinic for minor health conditions.
“This new public-private collaboration between CVS, TriWest, and the VA is an important step forward in enhancing choice and flexibility in veterans’ healthcare,” Senator John McCain noted in a CVS Health press release. “I’ve long believed that veterans in need of routine healthcare services should not have to wait in line for weeks to get an appointment when they can visit community health centers like Minute Clinic to receive timely and convenient care.”
Because of this collaboration, 120,000 veterans living in the Phoenix area may now receive care, when appropriate, at the 24 Minute Clinic locations in the metropolitan area.
“Our number one priority is getting veterans access to care when and where they need it. The launch of this partnership will enable VA to provide more care for veterans in their neighborhoods,” stated Baligh Yehia, MD, MPP, MSc, in the CVS Health press release. Yehia is Senior Medical Director at Johns Hopkins Medicine, and Deputy Undersecretary for Health at the US Department of Veterans Affairs.
As retail clinics become more popular a growing number of medical laboratory test samples that traditionally came from office-based physicians may originate from these clinics. Clinical laboratory outreach, physician support, and patient education programs have never been more critical.
—JP Schlingman
Related Information:
CVS Expanding Minute Clinic Chronic Disease Programs
Phoenix VA Healthcare System, TriWest, and CVS Health Partner to Increase Veteran Access to Healthcare Services
CVS Health (CVS) Q2 2017 Results – Earnings Call Transcript
The Value Proposition of Retail Clinics
Convenient Care: Growth and Staffing Trends in Urgent Care and Retail Medicine
Walk-in Clinics Force Big Medicine to Rethink
Five Reasons Why Retail Clinics Are a “Game-Changing” Threat to Traditional Healthcare Providers That Could Strain Clinical Laboratories and Pathologists
Retail Clinics Are Poised to Offer More Health Services, Participate in ACOS, and Offer Expanded Menu of Clinical Pathology Laboratory Tests
Dec 1, 2017 | Laboratory News, Laboratory Pathology, Laboratory Testing, Management & Operations, News From Dark Daily
Professor-led classroom lectures end as students are expected to do much of their traditional learning outside of class. Will this influence how many medical students go on to choose pathology for their residency?
Medical Colleges, hospital universities, and healthcare trade schools nationwide are considering “Active Learning” techniques to replace lectures. These bastions of higher education—where anatomic pathologists, medical laboratory scientists, doctors, nurses, clinical laboratory technicians, and other healthcare professionals learn their skills—are adopting evidence-based teaching styles that resonate with modern technology-savvy students.
In September, the University of Vermont Larner College of Medicine (UVM) became the latest institution to embrace this trend when it announced it would abolish lectures across all of its programs beginning in 2019. This makes UVM the first member of the Association of American Medical Colleges (AAMC) to drop lectures from its curriculum.
“What we know about learning in general is different than it was decades ago,” Lisa Howley, PhD, AAMC Senior Director of Strategic Initiatives and Partnerships, told Inside Higher Education. “Our medical students are of a generation that has grown up differently when it comes to technology and the impact that has on their ability to receive and retain information.”
Dubbed a “flipped classroom,” students do homework before classes rather than after, as would be done in a traditional education setting. They are expected to learn material online and through textbooks, and then complete self-assessments to gauge their understanding of what they’ve learned. Classroom time involves so-called “active learning,” which includes problem-solving in small groups, question-and-answer sessions, and group discussions.
UVM Not First to Drop Lectures
While UVM’s announcement has generated headlines and controversy, it is not the first medical school to abandon traditional lectures. Cleveland Clinic’s Lerner College of Medicine at Case Western Reserve University opened in 2004 with a no-lecture format.
A growing body of research, such as this study published in the Proceedings of the National Academy of Sciences of the United States of America (PNAS), indicates that active learning improves student performances, especially in science, technology, engineering, and mathematics. With the specialties of pathology and medical laboratory medicine heavily dependent on technology and science, this may be a favorable development for medical students who decided to specialize in these fields.
“We teach evidence-based medicine all the time,” William Jeffries, PhD, Senior Associate Dean for Medical Education at UVM, stated in the Inside Higher Education article. “If you have the evidence to show one treatment is better than the other, you would naturally use that treatment. So, if we know that there are methods superior to lecturing, why are we lecturing at all?”
Kelly J. (McDonough) Butnor, MD (center), Surgical Pathologist and Professor of Pathology and Laboratory Medicine at University of Vermont College of Medicine, conducts a team-based learning session with second-year students. (Photo and caption copyright: The Washington Post, Erin Post, Larner College of Medicine.)
In 2112, Charles G. Prober, MD, Senior Associate Vice Provost for Health Education and Professor of Pediatrics at Stanford School of Medicine, and Chip Heath, PhD, Professor of Organizational Behavior in the Stanford Graduate School of Business, called for a “change in the way we educate doctors.”
In “Lecture Halls without Lectures—A Proposal for Medical Education,” published in the New England Journal of Medicine (NEJM), Prober and Heath wrote, “Students are being taught roughly the same way they were taught when the Wright brothers were tinkering at Kitty Hawk.” They suggested five years ago that active learning and short online videos were more effective and a better use of students’ limited time than auditorium-style mandatory lectures. Today, with mobile technologies and streaming Internet technologies, their argument is even more valid.
Lack of Funds Blocks Innovation
Jeffries contends the cost of making wholesale changes in how students are taught, which requires retraining faculty and renovating classrooms, keeps most medical schools from overhauling teaching methods. “Most schools do not have the resources to turn the battleship around,” he told Inside Higher Education.
At UVM, however, a $66-million gift last year by Robert Larner, MD, and his wife Helen, is helping fund the school retrain its medical school teaching staff and redesign classroom spaces to support active learning. Larner is a dual-degree alum whose name now adorns the medical school.
In a recent NEJM article, Richard M. Schwartzstein, MD, Professor, Beth Israel Deaconess Medical Center (BIDMC) at Harvard Medical School, and David H. Roberts, MD, Dean for External Education at Harvard Medical School, point out that “the movement away from traditional lecture-based courses has been under way in US medical schools for more than three decades.” They question, however, whether the push to do away with all lectures is “merely the latest fad in medical education” or is it truly evidence-based?
“We can often serve our students best by fusing elements of various methods, such as team-based or case-based learning and interactive large-group learning sessions, rather than feeling obliged to adhere to a particular format,” they wrote. “But we must also use evidenced-based approaches whenever possible and rigorously evaluate our innovations, acknowledging that important outcomes may include student engagement and problem-solving skills, team dynamics, and the learning environment as much as exam scores.”
Prober told the Washington Post that medical school students already vote with their feet for the type of teaching format they prefer.
“When you go into a lecture in medical schools across the nation, you will find a minority of students actually present,” he said. “Medical students are adults. One generally believes adults try to make decisions that are in their best interests. They have seemingly made the decision that it is not in the lectures.”
For the past two decades, many pathologists have regularly pointed out that advances in technologies and procedures in both anatomic pathology and clinical laboratory medicine have outpaced the ability of medical schools and residency programs to incorporate these new developments into training programs. Thus, clinical laboratory scientists and pathologists will be watching with interest to see if these new models for medical school education are capable of incorporating new advances in laboratory medicine into their training formats in a timely fashion.
—Andrea Downing Peck
Related Information:
Become a Doctor, No Lectures Required
Medical School Without the ‘Sage on a Stage’
Active Learning Increases Student Performance in Science, Engineering, and Mathematics
Lecture Halls without Lectures–A Proposal for Medical Education
Saying Goodbye to Lectures in Medical School–Paradigm Shift or Passing Fad?
UVM Names Robert Larner, MD, College of Medicine
Nov 29, 2017 | Coding, Billing, and Collections, Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Sales and Marketing, Laboratory Testing, Management & Operations
Medical laboratories today struggle to submit clean claims and be promptly and adequately reimbursed as health insurers institute burdensome requirements and audit more labs
Across the nation, clinical laboratories and anatomic pathology groups of all sizes struggle to get payment for lab test claims. Veteran lab executives say they cannot remember any time in the past when medical laboratories were challenged on the front-end with getting lab test claims paid while also dealing on the back-end with ever-tougher audits and unprecedented recoupment demands.
These issues center upon the new policies adopted by the Medicare program and private health insurers that make it more difficult for many clinical laboratories to be in-network providers, to obtain favorable coverage guidelines for their tests, and to have the documentation requested when auditors show up to inspect lab test claims. This is true whether the audit is conducted by a Medicare Recovery Audit Contractor (RAC) or a team from a private health insurer.
Source of Financial Pressure on Medical Laboratories in US
Another source of financial pressure on medical laboratories in the United States today is the ongoing increase in the number of patients who have high-deductible health plans—whether from their employer or from the Affordable Care Act’s Health Insurance Marketplace (AKA, health exchanges). The individual and family annual deductibles for these plans typically start at around $5,000 and go to $10,000 or more. Many labs are experiencing big increases in patient bad debt because they don’t have the capability to collect payment from patients when they show up in patient service centers (PSCs) to provide specimens.
Some of these developments make it timely to ask the question: Is it a trend for payers to gang up on clinical laboratories and pathology groups and make it tougher for them to be paid for the lab tests they perform? Multiple factors can be identified to support this thesis.
“Is it a coincidence that, in recent years, so many payers are initiating numerous requirements that add complexity to how labs submit claims for lab tests and how they get paid?” asked Richard Faherty of RLF Consulting LLC. Faherty was formerly Executive Vice President, Administration, with BioReference Laboratories, Inc. “I can track four distinct developments that, collectively, mean that fewer lab claims get paid, expose clinical laboratories to extremely rigorous audits with larger recoupment demands, and heighten the risk of fraud and abuse allegations due to use of contract or third-party sales and marketing representatives who represent independent medical lab companies.”
Faherty described the first of his four developments as prior-authorization requirements for molecular and genetic tests. “Health insurers are reacting to the explosion in molecular and genetic testing—both in the number of unique assays that a doctor can order and the volume of orders for these often-expensive tests—by establishing stringent prior-authorization requirements,” he noted.
More Prior-Authorization Requirements for Molecular, Genetic Tests
“At the moment, many clinical lab companies and pathology groups are attempting to understand the prior-authorization programs established by Anthem (which became effective on July 1) and UnitedHealthcare (which became effective on November 1),” explained Faherty. “Just these two prior-authorization programs now cover as many as 80 million beneficiaries. There are plenty of complaints from physicians and lab companies because the systems payers require them to use are not well-designed and quite time-consuming.
“One consequence is that many lab executives complain that they are not getting paid for genetic tests because their client physicians are unable to get the necessary prior authorization—yet the lab decides to perform the test to support good patient care even though it knows it won’t be paid.”
Richard Faherty (left), CEO, RLF Consulting LLC, and formerly with Bio-Reference Laboratories, Inc., will moderate this critical webinar. Joining him will be Rina Wolf (center), Vice President, Commercialization Strategies, Consulting and Industry Affairs, XIFIN, Inc., and Karen S. Lovitch (right), JD, Practice Leader, Health Law Practice, Mintz Levin, PC, Washington, DC. The webinar takes place Wednesday, December 6, 2017, at 2 p.m. EST; 1 p.m. CST; 12 p.m. MST; 11 a.m. PST. Click here to register. (Photo copyright: Dark Intelligence Group.)
Payers Checking on How Clinical Laboratories Bill, Collect from Patients
Faherty’s second trend involves how medical lab companies are billing and collecting the amounts due from patients. “Most payers now pay close attention to how clinical laboratories bill patients for co-pays, deductibles, and other out-of-pocket amounts that are required by the patients’ health plans,” he commented. “Labs struggle with this for two reasons.
“One reason is the fact that tens of millions of Americans currently have high-deductible health insurance plans,” said Faherty. “In these cases, medical laboratories often must collect 100% of the cost of lab testing directly from the patients. The second reason is the failure of many independent lab companies to properly and diligently balance-bill their patients. This puts these labs at risk of multiple fraud and abuse issues.”
Many Medical Lab Companies Undergoing More Rigorous Audits by Payers
Faherty considers trend number three to be payers’ expanding use of rigorous audits of lab test claims. “In the past, it was relatively uncommon for a clinical lab company or pathology group to undergo audits of their lab test claims,” he observed. “That has changed in a dramatic way. Today, the Medicare program has increased the number of private auditors that visit labs to inspect lab test claims. At the same time, private health insurers are ramping up the number and intensity of the audits they conduct of lab test claims and substantially increasing their demands for recoupment without audit.
“One consequence of these audits is that medical laboratories are being hit with substantial claims for recoupment,” noted Faherty. “I am aware of multiple genetic testing companies that have been hit with a Medicare recoupment amount equal to two or three years of the lab’s annual revenue. Some have filed bankruptcy because the appeals process can take three to four years.”
Are Contract Lab Sales Reps More Likely to Offer Physicians Inducements?
Faherty’s fourth significant trend involves the greater use of independent contractors that handle lab test sales and marketing for clinical lab companies. “This trend affects both labs that use third-party lab sales reps and labs that don’t,” he said. “Labs that use contract sales and marketing representatives do not have direct control over the sales practices of these contractors. There is ample evidence that some independent lab sales contractors are willing to pay inducements to physicians in exchange for their lab test referrals.
“This is a problem in two dimensions,” noted Faherty. “On one hand, clinical lab companies that use third-party sales contractors don’t have full control over the marketing practices of these sales representatives. Yet, if federal and state prosecutors can show violations of anti-kickback and self-referral laws, then the lab company is equally liable. In certain cases, government attorneys have even gone after executives on a personal basis.
“On the other hand, I am hearing lab executives complain now that a substantial number of office-based physicians are so used to various forms of inducement offered by third-party sales representatives that the lab’s in-house sales force cannot convince those physicians to use their lab company without a comparable inducement. If true, this is a fundamental shift in the competitive market for lab testing services and it puts labs unwilling to pay similar inducements to physicians at a disadvantage.”
These four trends describe the challenges faced by every clinical laboratory, hospital laboratory outreach program, and pathology group when attempting to provide lab testing services to office-based physicians in a fully-compliant manner and be paid adequately and on time by health insurers.
Why Some Labs Continue to Be Successful and What They Can Teach You
These four trends may also explain why many medical lab companies are dealing with falling revenue and encountering financial difficulty. However, there continue to be independent lab companies that have consistent success with their coding, billing, and collections effort. These labs put extra effort into aligning their business practices with the requirements of the Medicare program and private health insurers.
To help pathologists and managers running clinical laboratory companies, hospital lab outreach programs, and pathology groups improve collected revenue from lab test claims and to improve lab compliance, Pathology Webinars, LLC, is presenting a timely webinar, titled, “How to Prepare Your Lab for 2018: Essential Insights into New Payer Challenges with Lab Audits, Patient Billing, Out-of-Network Claims, and Heightened Scrutiny of Lab Sales Practices.” It takes place on Wednesday, December 6, 2017 at 2:00 PM EDT.
Three esteemed experts in the field will provide you with the inside scoop on the best responses and actions your clinical lab and pathology group can take to address these major changes and unwelcome developments. Presenting will be:
· Rina Wolf, Vice President, Commercialization Strategies, Consulting and Industry Affairs, XIFIN, Inc. in San Diego; and,
· Karen S. Lovitch, JD, Practice Leader, Health Law Practice, Mintz Levin, PC, in Washington, DC;
· Moderating will be Richard Faherty of RLF Consulting LLC, and formerly with Bio-Reference Laboratories, Inc.
Special Webinar with Insights on How Your Lab Can Collect the Money It’s Due
To register for the webinar and see details about the topics to be discussed, use this link (or copy and paste this URL into your browser: http://pathologywebinars.com/how-to-prepare-your-lab-for-2018-essential-insights-into-new-payer-challenges-with-lab-audits-patient-billing-out-of-network-claims-and-heightened-scrutiny-of-lab-sales-practices/).
This is an essential webinar for any pathologist or lab manager wanting to improve collected revenue from lab test claims and to improve lab compliance. During the webinar, any single idea or action your lab can take away could result in increasing collected revenue by tens of thousands even hundreds of thousands of dollars. That makes this webinar the smartest investment you can make for your lab’s legal and billing/collection teams.
—Michael McBride
Related Information:
How to Prepare Your Lab for 2018: Essential Insights into New Payer Challenges with Lab Audits, Patient Billing, Out-of-Network Claims, and Heightened Scrutiny of Lab Sales Practices
Risk, Compliance, Pay—A Juggling Act for Labs
Continued ‘Aggressive Audit Tactics’ by Private Payers and Government Regulators Following 2018 Medicare Part B Price Cuts Will Strain Profitability of Clinical Laboratories, Pathology Groups
Threats to Profitability Causing Clinical Laboratories, Pathology Groups to Take on Added Risk by Entering into ‘Problematic’ Business Relationships and Risky Pricing Plans
Payers Hit Medical Laboratories with More and Tougher Audits: Why Even Highly-Compliant Clinical Labs and Pathology Groups Are at Risk of Unexpected Recoupment Demands
‘Death by 1,000 Knives’ Could Be in Store for Clinical Laboratories, Pathology Groups Not Prepared to Comply with New Medicare Part B Regulations
Nov 27, 2017 | Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Management & Operations, News From Dark Daily
November workshop to teach Clinical Lab 2.0 to forward-thinkers among clinical laboratories, IVD manufacturers, and lab IT vendors offered many examples where clinical laboratory diagnostics can add value and improve patient outcomes
DATELINE: ALBUQUERQUE, New Mexico—Here in this mile-high city, a special Project Santa Fe Workshop devoted to teaching the principles of Clinical Lab 2.0 attracted an impressive roster of innovators and forward-thinkers in clinical laboratory medicine. In attendance were leaders from a select number of the nation’s first-rank health systems and hospitals, along with executives from In Vitro diagnostics (IVD) manufacturers, lab IT companies, other lab service companies, attendees from the Centers for Disease Control and Prevention, and from institutions in Canada, Germany, Israel, India, and the UK.
Their common goal was to learn more about the emerging clinical and business model for medical laboratories known as “Clinical Lab 2.0.” A key objective of the workshop was to help those lab leaders in attendance develop strategic action plans for their own lab organizations, so as to take advantage of the insights coming from the vast information streams generated by their clinical laboratories. These services would be in support the evolving needs of health systems, hospitals physicians, and health insurers to more effectively provide integrated patient-centered clinical care.
Medical Laboratories Can Use Clinical Lab 2.0 as a Path to Adding Value
Clinical Lab 2.0 is the clinical and business model of the future for medical laboratories, assert the developers of this concept. “Clinical Lab 2.0 describes the attributes needed by all medical laboratories that want to succeed in a healthcare system organized to provide precision medicine, keep people out of hospitals, and where providers—including labs—are reimbursed based on the value they provide,” stated Khosrow Shotorbani, CEO of TriCore Reference Laboratories, one of the organizers of the Project Santa Fe Clinical Lab 2.0 Workshop.
“Clinical Lab 2.0 is the path medical labs will need to follow if they are to continue providing relevant lab testing services and generate the reimbursement necessary for them to maintain a high level of clinical excellence and financial stability going forward,” he added. “This is the next generation of medical laboratory organization and operation.”
Lab 1.0 Was Lab Clinical/Business Model for 50 Years
For more than 50 years, Clinical Lab 1.0 was the model for labs,” noted James Crawford, MD, PhD, Executive Director and Senior Vice President of Laboratory Services at Northwell Health Laboratories and an organizer of the Project Santa Fe Clinical Lab 2.0 Workshop. “Lab 1.0 is transactional, focusing on generating high quality analytical data on specimens received, but without assembling these data into integrative clinical care programs. In the simplest sense, Clinical Lab 1.0 focused on generating ever-greater numbers of specimens to drive down average cost-per-test, while maximizing revenue in a fee-for-service system.
This chart shows the attributes of Clinical Lab 1.0 and compares those to the attributes of Clinical Lab 2.0. Lab 1.0 is transactional and based on increasing test volume to lower costs and maximize fee-for-service revenue. Clinical Lab 2.0 is integrative in ways that add value to lab testing services. (Graphic copyright Project Santa Fe.)
“But fee-for-service payment is going away,” he said. “Increasingly, clinical laboratories will be paid based on the value they provide. This payment can be in the form of bundled reimbursement, as a per-member-per-month payment, or as a share of the budgeted payment made to a health system, an accountable care organization (ACO), or a multispecialty provider network. As these alternative forms of provider payment become dominant, to earn a fair share of reimbursement, all medical laboratories will need a clinical strategy to deliver lab testing services that measurably contribute to improved patient outcomes while reducing the overall cost of care. This requires looking at medical laboratories’ contribution to effective delivery of the full dollar of the healthcare spend, not just the three-cents-on-the-dollar representing laboratory testing.”
Innovators in Clinical Laboratory Industry Identify New Ways to Add Value
There are already a handful of innovative clinical laboratory organizations that have clinical experience in moving past the Lab 1.0 paradigm of reporting an accurate test result within the accepted turnaround time. Leaders within these labs are collaborating with physicians and frontline care givers specifically to help them better utilize lab tests in ways that directly improve the speed and accuracy of the overall diagnostic sequence, as well as achieving therapeutic optimization as rapidly as possible. These collaborations are tracking the improvement in patient outcomes while demonstrating how better use of lab tests can lower the total cost per episode of care.
During the Clinical Lab 2.0 workshop, case studies were presented demonstrating how clinical laboratory leaders are taking the first steps to practice Clinical Lab 2.0 so as to achieve added value with medical laboratory tests. The case studies included:
· A project to improve diagnosis and treatment of sepsis at Geisinger Health System.
· A project at Henry Ford Health to collaborate with physicians to more appropriately utilize lab tests and build consensus in support of a new lab test formulary.
· A multi-hospital initiative at Northwell Health to collaborate with physicians and nurses in the use of creating testing to make earlier, more accurate diagnoses of acute kidney injury during inpatient admissions, and better guide decisions to treat.
· A partnership involving TriCore Reference Laboratory and certain health insurers in New Mexico where the laboratory—using lab test data (some generated by emergency room testing) and other clinical data—alerts the insurers to women who are pregnant, thus allowing the insurers to provide timely guidance to the women’s care teams with the goal of improving prenatal care.
The Project Santa Fe Clinical Lab 2.0 Workshop convened on November 13-14 in Albuquerque, N.M. A broad spectrum of innovative professionals from the five Project Santa Fe member laboratories (above) were there to teach the lessons learned from their first successful efforts to collaborate with physicians and create added value from medical laboratory diagnostics. Other attendees included progressive lab leaders from several of the nation’s most prominent health systems, along with thought leaders from the IVD, lab software, and lab association sectors. (Photo copyright Project Santa Fe.)
Project Santa Fe Workshop: A Well-Attended Lab ‘Think Tank’
Participants attending the Clinical Lab 2.0 workshop included hospital lab administrators, pathologists, and clinical laboratory industry executives. The importance of this workshop is reflected in the educational grants and financial support provided by leading in vitro diagnostics manufacturers, lab IT companies, and other lab industry vendors. The lab industry vendors included:
· Abbott Laboratories
· ARUP Laboratories
· Beckman Coulter
· DiaSorin
· MedSpeed
· Roche Diagnostics
· Siemens Healthineers
· Sysmex
Also providing educational grants and similar support were:
· American Clinical Laboratory Association
· CAP Today
· Centers for Disease Control and Prevention
· Mayo Medical Laboratories
· The Dark Report
Project Santa Fe was launched in 2016 by clinical lab leaders from five of the nation’s most respected integrated health systems:
· TriCore Reference Laboratories;
· Henry Ford Health;
· Geisinger Health;
· Kaiser Permanente Northern California; and,
· Northwell Health.
Described as a think-tank venture, the organizers are committed to implementing projects that demonstrate how lab tests can be used in ways that add value, and then publish the resulting projects, along with data about improved patient outcomes and reductions in healthcare costs, in peer-reviewed journals. Multi-institutional studies will be required to validate the findings and outcomes from the added-value clinical collaborations initiated at the different medical laboratory organizations participating in Project Santa Fe.
Another primary goal is to share the lessons learned from these innovative projects with other like-minded pathologists, lab administrators, and lab managers. In May, Project Santa Fe organizers led a one-day workshop to teach Clinical Lab 2.0 at the Executive War College on Laboratory and Pathology Management. The workshop in Albuquerque on November 13-14 was the second learning opportunity available to medical laboratory professionals. A November 2018 workshop is planned.
—Robert L. Michel
Related Information:
Project Santa Fe Workshop
Improving American Healthcare through “Clinical Lab 2.0”: A Project Santa Fe Report
Laboratory 2.0: Changing the Conversation
CEO Describes Characteristics of the Clinical Lab 2.0 Model: Five Health System Labs Using Project Santa Fe To Demonstrate Value
Moving to Clinical Lab 2.0: Deliver More Value! Get Paid More Dollars!
Lab Innovators Advocate Need for Clinical Lab 2.0: Lab 1.0 Is the Low-Paid Commodity Lab, While Lab 2.0 Gets Paid More for the Value It Contributes
Using the Laboratory Value Pyramid and Clinical Lab 2.0 to Position Your Lab to Add Value in the Era of Population Health, Precision Medicine, and Value-Based Payment
