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

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

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Medical Laboratory Testing Company uBiome Raided by FBI for Alleged Insurance Fraud and Questionable Business Practices

Following the raid, the company’s co-founders resigned from the board of directors

Microbiome testing company, uBiome, a biotechnology developer that offers at-home direct-to-consumer (DTC) test kits to health-conscious individuals who wish to learn more about the bacteria in their gut, or who want to have their microbiome genetically sequenced, has recently come under investigation by insurance companies and state regulators that are looking into the company’s business practices.

CNBC reported that the Federal Bureau of Investigation (FBI) raided the company’s San Francisco headquarters in April following allegations of insurance fraud and questionable billing practices. The alleged offenses, according to CNBC, included claims that uBiome routinely billed patients for tests multiple times without consent.

Becker’s Hospital Review wrote that, “Billing documents obtained by The Wall Street Journal and described in a June 24 report further illustrate uBiome’s allegedly improper billing and prescribing practices. For example, the documents reportedly show that the startup would bill insurers for a lab test of 12 to 25 gastrointestinal pathogens, despite the fact that its tests only included information for about five pathogens.”

Company Insider Allegations Trigger FBI Raid

In its article, CNBC stated that “company insiders” alleged it was “common practice” for uBiome to bill patients’ insurance companies multiple times for the same test.

“The company also pressured its doctors to approve tests with minimal oversight, according to insiders and internal documents seen by CNBC. The practices were in service of an aggressive growth plan that focused on increasing the number of billable tests served,” CNBC wrote.

FierceBiotech reported that, “According to previous reports, the large insurers Anthem, Aetna, and Regence BlueCross BlueShield have been examining the company’s billing practices for its physician-ordered tests—as has the California Department of Insurance—with probes focusing on possible financial connections between uBiome and the doctors ordering the tests, as well as rumors of double-billing for tests using the same sample.”

Becker’s Hospital Review revealed that when the FBI raided uBiome they seized employee computers. And that, following the raid, uBiome had announced it would temporarily suspend clinical operations and not release reports, process samples, or bill health insurance for their services.

The company also announced layoffs and that it would stop selling SmartJane and SmartGut test kits, Becker’s reported.

uBiome Assumes New Leadership

Following the FBI raid, uBiome placed its co-founders Jessica Richman (CEO) and Zac Apte (CTO) on administrative leave while conducting an internal investigation (both have since resigned from the company’s board of directors). The company’s board of directors then named general counsel, John Rakow, to be interim CEO, FierceBiotech reported.

John Rakow (center) is shown above with uBiome co-founders Jessica Richman (lower left) and Zac Apte (lower right). In a company statement, Rakow stressed that he believed in the company’s products and ability to survive the scandal. His belief may be based on evidence. Researchers have been developing tests based on the human microbiome for everything from weight loss to predicting age to diagnosing cancer. Such tests are becoming increasingly popular. Dark Daily has reported on this trend in multiple e-briefings. (Photo copyrights: LinkedIn/uBiome.)

After serving two months as the interim CEO, Rakow resigned from the position. The interim leadership of uBiome was then handed over to three directors from Goldin Associates, a New York City-based consulting firm, FierceBiotech reported. They include:

Four testing products remain available for in-home testing on the uBiome website:

What Went Wrong?

Richman and Apte founded uBiome in 2012 with the intent of marketing a new test that would prove a link between peoples’ microbiome and their overall health. The two founders initially raised more than $100 million from venture capitalists, and, according to PitchBook, uBiome was last valued at around $600 million, Forbes reported.

Nevertheless, as a company, uBiome’s future is uncertain. Of greater concern to clinical laboratory leaders is whether at-home microbiology self-test kits will become a viable, safe alternative to tests traditionally performed by qualified personnel in controlled laboratory environments.

Dark Daily reported on the controversy surrounding this trend in “At-Home Microbiology Tests Trigger Concerns about Scientific Value and Impact from Microbiologists and Clinical Laboratory Scientists,” October 16, 2017.

It’s a trend worth watching.

—JP Schlingman

Related Information:

Insiders Describe Aggressive Growth Tactics at uBiome, the Health Start-up Raided by the FBI Last Week

FBI Investigating uBiome’s Billing Practices

Turmoil Persists at uBiome with New Management Overhaul Amid FBI Probe: Reports

uBiome Appoints John Rakow as Interim Chief Executive Officer

Another Shakeup at uBiome: Interim CEO Quits

Seven Updates on the Ongoing uBiome Investigation

Microbiome Startup uBiome Cofounders on Administrative Leave after Reports of FBI Raid

Microbiome Testing Startup Under Scrutiny for Billing Practices

At-Home Microbiology Tests Trigger Concerns about Scientific Value and Impact from Microbiologists and Clinical Laboratory Scientists

Are Clinical Laboratories Prepared to Cope with Outrage Over Surprise Medical Billing? Patient Access Management May Be an Effective Solution

Consumer demand and federal requirements for price transparency affect how clinical laboratories and anatomic pathology groups meet patients’ expectations while navigating complex payer agreements

Regardless of a clinical laboratory’s payer mix and revenue cycle management (RCM) system, the demand for greater price transparency impacts laboratory services just as it does other healthcare services. Addressing new federal policies that support price transparency may require medical laboratory managers to alter how they approach RCM and patient communications.

Patient access management (PAM) is what some early-adopter medical labs and pathology groups are using to respond to these new federal policies and changing patient expectations. PAM can be an effective tool to fulfill complex payer requirements and implement consumer-friendly healthcare services. Not only does this comply with federal guidelines, it helps independent laboratories increase revenue by lowering denial rates.

How and When Clinical Laboratories Should Implement Patient Access Management

Revenue cycle experts say clinical laboratories are in a position to take an active role in the pricing transparency debate.

“If labs don’t control the pricing narrative, someone else will,” stated Walt Williams, Director of Revenue Cycle Optimization and Strategy for Quadax, a firm that has studied revenue trends in healthcare for more than 40 years, in an exclusive interview with Dark Daily.

He says, given these new demands on clinical laboratories and pathology groups, implementing patient access management practices ensures a satisfactory patient and physician experience and reduces the financial risk related to trends in uncollected revenue.

“In this age of increasing consumerism—along with the complex challenges of navigating the payer landscape and pre-empting administrative denials—it’s no wonder independent labs are turning to new patient access technology solutions to avoid leaving money on the table,” Williams said.

Patient access management solutions allow clinical laboratories to:

  • obtain accurate patient demographic information,
  • verify insurance coverage and eligibility, and
  • gain clarity on payer rules regarding prior authorization and medical necessity.

These capabilities enable medical laboratories to secure appropriate reimbursement closer to the date of service. PAM also can provide the ordering-physician with financial counseling and guidelines on a patient’s financial obligation. This would be shared with the patient to help prevent surprise billing.

New Fact of Life for Labs: Patients Are the New Payers

Medical laboratory patient-access representatives must employ proper patient-liability collection techniques before, during, and after each date of service. This has become increasingly challenging as more patients join high-deductible health plans (HDHPs) and take on more financial responsibility. The problem for labs is that meeting the expectations of consumers requires a different toolset than meeting the needs of complex payer requirements.

Additionally, evolving policies in prior authorization, medical necessity, and coding (see, “Labs Get High Denial Rates Under New NCCI Rules,” The Dark Report) are resulting in potential payment traps for patients and known revenue traps for providers and suppliers.

In its research into trends in healthcare access and affordability, the Peterson Center on Healthcare and the Kaiser Family Foundation (KFF) created the Health System Tracker to monitor consumer spending and surprise medical billing, among other points of interest.

The graphic above, taken from a KFF Health Tracking Poll conducted in 2018, lists “unexpected medical bills” as the top financial fear among Americans. “Four in 10 (39%) insured adults ages 18-64 say there has been a time in the past 12 months when they received care from a doctor, hospital, or lab that they thought was covered and their health plan either didn’t cover the bill at all or covered less than they expected,” the KFF poll notes. This illustrates the critical importance for clinical laboratories to implement patient access management protocols. (Graphic copyright: Kaiser Family Foundation.)

While the current high cost of healthcare will likely continue for some time, publishing information about the lab’s policies can help consumers view choices when it comes to selecting laboratory tests and anticipating potential payment obligations.

Henry Ford Health System, for example, posted information about prior authorization as it relates to its pathology and laboratory services.

Consumer-Facing Price Transparency and CMS Requirements

Rooted in price transparency regulations issued in July 2018, the federal Centers for Medicare and Medicaid Services (CMS) encouraged “all providers and suppliers of healthcare services to undertake efforts to engage in consumer-friendly communication of their charges to help patients understand what their potential financial liability might be for services they obtain, and to enable patients to compare charges for similar services. We encourage providers and suppliers to update this information at least annually, or more often as appropriate, to reflect current charges.”

The questions below, which CMS posed for comment in “Hospital Outpatient Prospective Payment-Notice of Proposed Rulemaking” (CMS-1695-P), may help lab managers tasked with making price transparency program decisions. They include:

  • How should we define “standard charges” in provider and supplier settings? Is the best measure of a provider’s or supplier’s standard charges its chargemaster, price list, or charge list?
  • What types of information would be most beneficial to patients … enable patients to use charge and cost information in their decision-making?
  • How can information on out-of-pocket costs be provided to better support patient choice and decision-making? What can be done to better inform patients of their financial obligations?
  • What changes would need to be made by providers and suppliers to provide patients with information on what Medicare pays for a particular service performed by that provider or supplier?

These considerations and more can help the development of patient access management and consumer-friendly communication initiatives that are tailored to clinical laboratory services.

Patient Access Management for Clinical Laboratories

Patient access management facilitates critical components of the revenue cycle. However, it must be fine-tuned to fit each healthcare provider’s unique revenue cycle process. This includes clinical laboratory and anatomic pathology services.

“Having business rules and workflows based on best practices to verify patient demographics, support insurance discovery, and navigate prior authorizations are now a minimum requirement for any healthcare provider to maintain financial viability,” Williams notes.

To help clinical laboratories fulfill CMS’ patient access guidelines—including best practices for reversing the trend of uncollected revenue—a free white paper titled, “Patient Access Antidote: Retaining More Revenue with Front-End Solutions,” has been published by Dark Daily in partnership with Quadax.

The white paper will provide useful insights regarding front-end patient access management. And it will equip clinical laboratories and pathology groups with the expert tools and solutions they need to optimize their cash flow and successfully meet key revenue cycle objectives.

Download it here.

—Liz Carey

Related Information:

WHITE PAPER: Patient Access Antidote: Retaining More Revenue with Front-End Solutions

Undertaking CMS Efforts to Engage in Consumer-Friendly Communication

An Examination of Surprise Medical Bills and Proposals to Protect Consumers from Them

Kaiser Health Tracking Poll – Late Summer 2018: The Election, Pre-Existing Conditions, and Surprises on Medical Bills

Labs Get High Denial Rates Under New NCCI Rules

Walmart Flies Employees to Top Hospitals for Surgeries in a Bid to Cut Healthcare Costs

Case study in Harvard Business Review showcases retailer’s blueprint for employer-generated healthcare reform and shows clinical laboratories that employers are price-shopping

Healthcare reforms that curb costs while improving outcomes have been an elusive goal at both the federal and private insurance levels. Now, Walmart (NYSE:WMT) may have found a plan that works, and it may have implications for clinical laboratories.

In an effort to curb healthcare spending while ensuring workers have access to the best quality care at competitive costs, Walmart is paying the travel costs to send sick employees to out-of-state hospitals and doctors that are top-ranked.

If the retail giant succeeds where other stakeholders have failed, clinical laboratories may find major employers in their communities decide to pursue lower prices for other types of healthcare, including medical laboratory test services.

Walmart and its partners published a recent case study in the Harvard Business Review hoping to encourage other companies to follow suit. It’s an intriguing story.

‘These people are skinnin’ us alive!’

An employee was suffering from mild, but worsening, neck pain and a tremor in his hands. After a local surgeon recommended spine surgery due to spinal column narrowing and disc degeneration, Walmart paid for the worker and his wife to travel to Geisinger Medical Center in Pennsylvania for a second opinion. Geisinger evaluated his condition and diagnosed Parkinson’s disease. After receiving treatment for the disease, the patient returned to work.

Walmart’s actions prevented an unnecessary $30,000 spinal surgery.

“Employers will shoulder a substantial portion of the cost of US healthcare for the foreseeable future,” the case study states. “Until recently [employers have] had few options but to shift some of the growing cost to employees and fight for rate decreases. Those tactics have not stemmed rising costs and have done little to address quality. But as we and others have found, high-quality care is reliably the most cost-efficient.”

According to the case study, founder Sam Walton first urged his leadership team to find a solution to out-of-control healthcare costs. “These people are skinnin’ us alive,” Walton was quoted as saying in 1991. “They’re charging us five and six times what they ought to charge us … so, we need to work on a program where we’ve got hospitals and doctors … saving our customers money and our employees money.”

Walmart’s answer is its six-year-old Centers of Excellence (COE) program. In partnership with third-party administrator Health Design Plus (HDP), Walmart directly contracts with the following leading medical centers for procedures, such as hip or knee replacements, heart or back surgery, or cancer treatments:

Patients incur no out-of-pocket costs for travel to a COE facility and most plan procedures and consultations are fully covered. Until 2018, the COE program was optional for Walmart employees. Now, employees may be on the hook for the entire cost if they opt to have a covered procedure performed locally.

‘It’s become a mission’

That’s what Lisa Woods, Senior Director of US Health Care at Walmart, wrote in the case study, which she co-authored with Jonathan Slotkin, MD, Director of Spine Surgery and Associate Chief Medical Informatics Officer at Geisinger, and Ruth Coleman, RN, founder of Health Design Plus.

Coleman goes a step farther in her praise for Walmart’s direct-contract model.

“Taking care of patients the right way is the best way to get good outcomes while reducing employer costs,” she said. “This could revolutionize healthcare.”

Lisa Woods (above), Senior Director of US Health Care at Walmart, is confident the COE program can be a model for other employers looking to address the cost-and-quality dilemma. “It doesn’t mean we have all the answers, but we want to share and teach. Our goal is to create positive changes in the healthcare space.” Nevertheless, higher-priced clinical laboratories that service healthcare providers contracted with Walmart may find test orders for Walmart beneficiaries diminishing in the future. (Photo copyright: Fortune.)

Other Company Efforts to Lower Healthcare Costs for Employees

Walmart is not alone in seeking new ways lower healthcare costs. The case study notes that healthcare spending nationwide “has increased by 44% per enrollee from 2007 to 2016, reaching an annual amount of nearly $700 billion in 2017—roughly what the Pentagon spends on defense.”

General Electric, Lowe’s, McKesson, and Boeing also are directly contracting with high-quality healthcare providers to control costs and improve outcomes.

In Utah, medical tourism of another kind is bringing down employer healthcare costs. As Dark Daily previously reported, a state program dubbed “pharmaceutical tourism” incentivizes state employees to buy certain prescription drugs in Mexico.

Patients are flown with a companion from Utah to San Diego and then transported by private car to Tijuana where their prescriptions are filled. Even with travel expenses and a $500 cash bonus to program participants, the state’s employee health plan saves 40% to 60% percent each time a prescription is filled in Mexico.

As the future of the Affordable Care Act and other healthcare reforms remain uncertain, clinical laboratories and anatomic pathology groups should expect more employers to turn to outside-the-box methods for ratcheting down healthcare costs. They also should be looking for innovative ways to add value to the services they provide patients and healthcare systems to maintain their current rate of test orders.

—Andrea Downing Peck

Related Information:

Walmart Is so Desperate to Fix Health Care, It Flies Employees to Top Hospitals in Other States for Treatment

How Employers are Fixing Healthcare

Utah Public Employees Receive transportation and a $500 Cash Bonus to Purchase Prescriptions in Mexico

Innovative Programs by Geisinger Health and Kaiser Permanente Are Moving Providers in Unexplored Directions in Support of Proactive Clinical Care

These initiatives are a call-to-action for clinical laboratories to contribute their expertise in support of wellness programs

Two of the largest healthcare systems in America are moving in non-traditional directions to proactively address certain healthcare populations. Most recently, Kaiser Permanente announced it will be investing millions of dollars to tackle homelessness and the disease outbreaks associated with it. The health system is even investing in a housing complex in Oakland, Calif., which it hopes will help patients in that area who face housing insecurity.

Kaiser’s new direction mirrors a similar project by Geisinger Health designed to address the health of certain populations. In 2017, Geisinger launched what it calls the “Fresh Food Farmacy” for its adult diabetic and obese patients to give them access to healthy foods. Geisinger finds this service saves substantial money in downstream medical expenses because the patients are healthier.

If these programs are harbingers of things to come, clinical laboratories open to supporting such wellness programs will find opportunities heading their way.

Healthcare and Homelessness

Kaiser Permanente’s announced $200 million investment in the new program begins with a $5.2 million purchase of affordable housing in Oakland, Calif. Kaiser is working with Enterprise Community Partners and the East Bay Asian Local Development Corporation (EBALDC).

The housing complex consists of 41-units and is in an area where existing residents are at risk of displacement due to gentrification. Kaiser Permanente’s purchase means the complex will be blocked from redevelopment and will remain affordable for the residents who live there.

“Housing security is a crucial health issue for vulnerable populations,” Bernard Tyson, Chairman and CEO at Kaiser Permanente, stated in a news release. “Access to affordable housing is a key component to Kaiser Permanente’s mission to improve the health of our members and the communities we serve.”

This unusual move is part of a larger strategy to invest in the economic, social, and environmental conditions that impact the health of Kaiser’s patients. It’s also part of a greater trend toward value-based, proactive healthcare.

“We know that differences in health are striking in communities with poor social determinants of health such as unstable housing, low income, and unsafe neighborhoods,” said Richard Isaacs, MD, CEO and Executive Director of The Permanente Medical Group, in the news release. “These innovative strategies are critically important steps toward the maintenance of health improvement, consistent health outcomes, and California health equity.” (Photo copyright: Kaiser Permanente.)

Proactive versus Reactive Care

Healthcare delivery in the US is transitioning from volume-based to value-based care. The Kaiser and Geisinger projects are championing another equally critical change—proactive care instead of reactive care. This shift in priorities promises to change how health systems and healthcare providers think about healthcare delivery. And clinical pathology laboratories play a critical role in these changes.

“Specifically, in the transition from volume-based to value-based healthcare, clinical laboratories are called upon to provide programmatic leadership in reducing total cost of care through optimization of time-to-diagnosis and time-to-effective therapeutics, optimization of care coordination, and programmatic support of wellness care, screening, and monitoring. This call to action is more than working with industry stakeholders on the basis of our expertise; it is providing leadership in creating the programs that accomplish these objectives,” James M. Crawford, MD, PhD, and co-authors, noted in their paper, “Improving American Healthcare Through Clinical Lab 2.0: Santa Fe Report,” published in the journal Academic Pathology.  

Food as a Prescription

Patients encounter all sorts of challenges in addition to housing. Geisinger Health’s Fresh Food Farmacy program promises to help obese and diabetic patients who face food insecurity maintain healthy diets. Coupled with exercise, the program acts like medication in helping regulate blood sugar and improving long-term outcomes for people with diabetes.

Patients in the program are given a referral, called a prescription, by their primary care physician. Once enrolled, they receive a welcome kit that includes food measurement instruments, recipes, and nutritional information. Each week, they also receive enough food to prepare healthy, nutritious meals twice a day for five days for their families.

Enrolled patients attend weekly support groups to learn about self-management. And they complete an online wellness class to help them learn about nutrition. The program also offers free cooking and nutrition classes taught by dieticians and health coaches.

Proactive, Value-Based Care and Population Health

“With what’s happening in this nation right now, there’s never been a more important time for us to focus in on this population and to do that through a united front,” Lloyd Dean, CEO at CommonSpirit Health (formerly known as Dignity Health), told Forbes.

The housing program at Kaiser Permanente and the Fresh Food Farmacy at Geisinger are just two of the latest examples that healthcare providers are increasingly focusing on population health. The fee-for-service model of healthcare pays health systems, hospitals, and other providers, based on the number of sick they treat. These new programs, however, move the entire healthcare system toward keeping people from getting sick in the first place.

“I think there’s no doubt that we need to emphasize both health needs and social service needs, and we should be thinking about these collectively and not in silos,” Signe Peterson Flieger, PhD, Assistant Professor of Public Health and Community Medicine at Tufts University, told Forbes.

As progressive health networks such as Kaiser Permanente and Geisinger move the traditional sites and types of medical care into new settings and new directions, medical laboratory managers and personnel need to stay alert for opportunities to support innovative, new health and wellness programs in their communities.

—Dava Stewart

Related Information:

Kaiser Permanent Just Invested in a Housing Complex. Here’s What It’s Doing with It

3 Initiatives to Tackle Housing Insecurity

Improving American Healthcare Through “Clinical Lab 2.0”: A Project Santa Fe Report

Fresh Food Farmacy

The Man Who Used to Run Medicaid Has a New Idea to Make It Better 

New AHA Report Finds Hospital Outpatient Revenue Nearing Inpatient Revenue, While CMS Proposes Paying Less for In-hospital Healthcare Services

Clinical laboratories that service both settings could be impacted as new CMS proposed rule attempts to align Medicare’s payment policies for outpatient and in-patient settings

Hospital outpatient revenue is catching up to inpatient revenue, according to data released from the American Hospital Association (AHA). This increase is part of a growing trend to reduce healthcare costs by treating patients outside of hospital settings. It’s a trend that is supported by the White House and Medicare and continues to impact clinical laboratories, which serve both hospital inpatient and outpatient customers.

The AHA published this study data in its annual Hospital Statistics, 2019 Edition. The data comes from a 2017 survey of 5,262 US hospitals. The report includes data about utilization, revenue, expenses, and other indicators for 2017, as well as historical data.

The AHA statistics on outpatient revenue suggest providers nationwide are working to keep people out of more expensive hospital settings. Hospitals, like medical laboratories, appear to be succeeding at developing outpatient and outreach services that generate needed operating revenue.

This aligns with Medicare’s push to make healthcare more accessible through outpatient settings, such as urgent care clinics and physician’s offices. A growing trend Dark Daily has covered extensively.

Outpatient Revenue Climbs

In its coverage of the AHA’s study, Modern Healthcare reported that 2017 hospital net inpatient revenue was $498 billion and net outpatient revenue was $472 billion.

The Becker’s Hospital CFO Report notes that gross inpatient revenue in 2017 was $92.7 billion higher than gross outpatient revenue. But in 2016, gross inpatient revenue was much further ahead—$129.5 billion more than gross outpatient revenue. The “divide” between inpatient and outpatient revenue is narrowing, Becker’s reports.


The graphic above illustrates the shrinking gap between hospital inpatient and outpatient revenues. “Outpatient revenue will ultimately eclipse inpatient revenue,” Chuck Alsdurf, Director of Healthcare Finance Policy and Operational Initiatives at the Healthcare Financial Management Association (HFMA), told Modern Healthcare. (Graphic copyright: Modern Healthcare/AHA.)

 The Becker’s report also stated:

  • Admissions increased by less than 1% to 34.3 million in 2017, up from 34 million in 2016;
  • Inpatient days were flat at 186.2 million;
  • Outpatient visits rose by 1.2% to 766 million in 2017; and,
  • Outpatient revenue increased 5.7% between 2016 and 2017.

Similar Study Offers Additional Insight into 2018 Outpatient Revenue

A benchmarking report by Crowe, a public accounting, consulting, and technology firm, which analyzed data from 622 hospitals for the period January through September of 2017 and 2018, showed the following, as reported by RevCycleIntelligence:

  • Inpatient volume was up 0.6% in 2018 and gross revenue per case grew by 5.3%;
  • Outpatient services rose 2.4% in 2018 and gross revenue per case was up 7.1%.

Physicians’ Offices Have Lower Prices for Some Hospital Outpatient Services

Everything, however, is relative. When certain healthcare services traditionally rendered in physician’s offices are rendered, instead, in hospital outpatient settings, the numbers tell a different story.

In fact, according to the Health Care Cost Institute (HCCI), the price for services was “always higher” when performed in an outpatient setting, as compared to doctor’s offices.

HCCI analyzed services at outpatient facilities as well as those appropriate to freestanding physician offices. They found the following differences in 2017 prices:

  • Diagnostic and screening ultrasound: $241 in physician’s office—$650 in hospital outpatient setting;
  • Level 5 drug administration: $254 in office—$664 in hospital outpatient setting;
  • Upper airway endoscopy: $527 in office—$2,679 in hospital outpatient setting.

One example where hospital outpatient settings provide similar services at increased costs is in drug administration, as the graphic above illustrates. “The difference was higher than I expected. With some services, the price is two or three times higher when rendered in the outpatient setting,” Julie Reiff, HCCI researcher and report author, told Fierce Healthcare. (Graphic copyright: HCCI.)

Medicare Proposed Rule Would Change How Hospital Outpatient Clinics Get Paid

Meanwhile, the Centers for Medicare and Medicaid Services (CMS) has released its final rule (CMS-1695-FC), which make changes to Medicare’s hospital outpatient prospective payment and ambulatory surgical center payment systems and quality reporting programs.

In a news release, CMS stated that it “is moving toward site neutral payments for clinic visits (which are essentially check-ups with a clinician). Clinic visits are the most common service billed under the OPPS [Medicare’s Hospital Outpatient Prospective Payment System). Currently, CMS often pays more for the same type of clinic visit in the hospital outpatient setting than in the physician office setting.”

“CMS is also proposing to close a potential loophole through which providers are billing patients more for visits in hospital outpatient departments when they create new service lines,” the news release states.

Hospitals are fighting the policy change through a lawsuit, Fierce Healthcare reported.

In summary, clinical laboratories based in hospitals and health systems are in the outpatient as well as inpatient business. Medical laboratory tests contribute to growth in outpatient revenue, and physician offices compete with clinical laboratories for some outpatient tests and procedures. Thus, a new site-neutral CMS payment policy could affect the payments hospitals receive for clinic visits by Medicare patients.

—Donna Marie Pocius

Related Information:

AHA Hospital Statistics 2019

AHA Data Show Hospitals’ Outpatient Revenue Nearing Inpatient

Hospitals’ Outpatient Revenue Inching Closer to Inpatient Revenue

“My Net Revenue is Stable,” said No CFO Ever . . .

Revenue Unable Despite Outpatient Volume Growth

Shifting Care from Office to Outpatient Settings: Services are Increasingly Performed in Outpatient Settings with Higher Prices

From Physician Offices to Outpatient Settings and Costs Go Up, HCCI Study Finds

CMS Empowers Patients and Ensures Site Neutral Payment Proposed Rule

Recently published White Paper explores effective new ways for clinical labs and pathology groups to reverse the trend of uncollected revenue in an era of higher patient requirements and reimbursement pressures

As a result of the drive toward consumer-driven healthcare, and because of rising health insurance deductibles, patients are increasingly becoming the new payers. Efficient patient access management is now viewed as critical to reversing the resulting trend of uncompensated care, and to meeting the lab’s revenue cycle objectives.

As patients take on more risk and assume more of their own healthcare costs, and as registration errors, authorization, and medical necessity continue to contribute to a large percentage of claim denials—laboratory leaders need to examine new patient access technologies and modernize their collection practices. In order to continue to profitably provide quality care and to meet revenue cycle objectives, it is crucial for labs to get a handle on plummeting accounts receivable.

DarkDaily.com is pleased to offer a recently published free White Paper that covers common trends having an impact on revenue cycle management and best patient access practices, as well as recommended strategies that labs and pathology groups can employ to take a proactive approach to their collection practices—and why it’s so important for the process to begin upfront.

Patient Access Antidote: Retaining More Revenue with Front-End Solutions” shares useful insights regarding front-end patient access management, and equips clinical laboratories and pathology groups with the expert tools and solutions they need to optimize their cash flow and successfully meet key revenue cycle objectives.

Just a few examples of the best practices covered in this complimentary White Paper: determining patient responsibility and factoring in prior-authorization and medical necessity, identifying patients’ financial clearance or propensity to pay, and providing consumers a clear explanation of their financial policies—along with a detailed, reliable estimate of their out-of-pocket expenses—as early in the revenue cycle as possible.

White Paper: Patient Access Antidote: Retaining More Revenue with Front-End Solutions

At DarkDaily.com, readers can access free resources on a variety of topics tailored specifically to the needs of laboratory administrators, lab managers, pathologists, and lab industry consultants.

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