Jun 27, 2018 | Digital Pathology, Instruments & Equipment, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Management & Operations
Using GPIIb/IIIa inhibition, and ion chelation, researchers have developed a “universal” method for preserving blood up to 72 hours while keeping it viable for advanced rare-cell applications
Through microfluidics and automation, clinical laboratories and anatomic pathologists have been able to detect ever-smaller quantities of biomarkers and other indicators of chronic disease.
However, preserving sample quality is an essential part of analytical accuracy. This is particularly true in precision oncology and other specialties where isolating rare cells (aka, low abundance cells), such as circulating tumor cells (CTCs), is a key component to obtaining information and running diagnostics.
Publishing their finding in Nature, researchers at Massachusetts General Hospital Center for Engineering in Medicine (MGH-CEM) have developed a whole blood stabilization method that is ideal for rare-cell applications, and which preserves sample integrity for up to 72 hours.
Should further testing validate their findings and methodology, this change could allow greater use of central laboratories and other remote testing facilities that previously would not be available due to distance and sample travel time.
Keeping Blood Alive Is Not Easy
“At Mass. General, we have the luxury of being so integrated with the clinical team that we can process blood specimens in the lab typically within an hour or two after they are drawn,” stated lead author Keith Wong, PhD, former Research Fellow, MGH-CEM, and now Senior Scientist at Rubius Therapeutics, Boston, in a Mass General press release. “But to make these liquid biopsy technologies routine lab tests for the rest of the world, we need ways to keep blood alive for much longer than several hours, since these assays are best performed in central laboratories for reasons of cost-effectiveness and reproducibility.”
Study authors Wong and co-lead author Shannon Tessier, PhD, Investigator at MGH-CEM, noted that current FDA-approved blood stabilization methods for CTC assays use chemical fixation—a process that can result in degradation of sensitive biomolecules and kill the cells within the sample.
Without stabilization, however, breakdown of red cells, activation of leukocytes (white blood cells), and clot formation can render the results of analyzing a sample useless, or create issues with increasingly sensitive equipment used to run assays and diagnostics.
“We wanted to slow down the biological clock as much as possible by using hypothermia, but that is not as simple as it sounds,” says Tessier. “Low temperature is a powerful means to decrease metabolism, but a host of unwanted side effects occur at the same time.”
Researchers started by using hypothermic treatments to slow degradation and cell death. However, this created another obstacle—aggressive platelet coagulation. By introducing glycoprotein IIb/IIIa inhibitors, they found they could minimize this aggregation.
Keith Wong, PhD (left), a former Research Fellow, MGH-CEM, and now Senior Scientist at Rubius Therapeutics in Boston; and Shannon Tessier, PhD (right), Investigator at MGH-CEM, co-authored a study to develop a whole blood stabilization method that preserves sample integrity for up to 72 hours, making it possible to transport blood specimens further distances to central clinical laboratories for processing. (Photo copyrights: LinkedIn.)
Prior to microfluidic processing of their test samples, researchers applied a brief calcium chelation treatment. The result was efficient sorting of rare CTCs from blood drawn up to 72 hours prior, while keeping RNA intact and retaining cell viability.
“The critical achievement here,” says Tessier, “Is that the isolated tumor cells contain high-quality RNA that is suitable for demanding molecular assays, such as single-cell qPCR, droplet digital PCR, and RNA sequencing.”
Their testing involved 10 patients with metastatic prostate cancer. Sample integrity was verified by comparing CTC analysis results between fresh samples and preserved samples from the same patients using MGH-CEM’s own microfluidic CTC-iChip device.
Results showed a 92% agreement across 12 cancer-specific gene transcripts. For AR-V7, their preservation method achieved 100% agreement. “This is very exciting for clinicians,” declared David Miyamoto, MD, PhD, of Massachusetts General Hospital Cancer Center in the press release. “AR-V7 mRNA can only be detected using CTCs and not with circulating tumor DNA or other cell-free assays.”
Methodology Concerns and Future Confirmations
“Moving forward, an extremely exciting area in precision oncology is the establishment of patient-specific CTC cultures and xenograft models for drug susceptibility,” the study authors noted. “The lack of robust methods to preserve viable CTCs is a major roadblock towards this Holy Grail in liquid biopsy. In our preliminary experiments, we found that spiked tumor cells in blood remain highly viable (>80%) after 72 hours of hypothermic preservation.”
Despite this, they also acknowledge limitations on their current findings. The first is the need for larger-scale validation, as their testing involved a 10-patient sample group.
Second, they note that further studies will be needed to “more completely characterize whole-transcriptome alterations as a result of preservation, and to what extent they can be stabilized through other means, such as further cooling (e.g., non-freezing sub-zero temperatures) or metabolic depression.”
Researchers also note that their approach has multiple advantages for regulatory approval and further testing—GPIIb/IIIa inhibitors are both low-cost and already approved for clinical use, implementation requires no modification of existing isolation assays, and cold chain protocols are already in place allowing for easy adaptation to fit the needs of pathology groups, medical laboratories, and other diagnostics providers handling samples.
While still in its early stages, the methods introduced by the researchers at MGH-CEM show potential to allow both the facilities collecting samples and the clinical laboratories processing them greater flexibility and increased accuracy, as high-sensitivity assays and diagnostics continue to power the push toward personalized medicine and expand laboratory menus across the industry.
—Jon Stone
Related Information:
Whole Blood Stabilization for the Microfluidic Isolation and Molecular Characterization of Circulating Tumor Cells
Improved Blood Stabilization Should Expand Use of Circulating Tumor Cell Profiling
Genentech Scientists Zero In on “Liquid Biopsies” as a Way to Replace Tissue Biopsies in Breast Cancer
University of Michigan Researchers Use “Labyrinth” Chip Design in Clinical Trial to Capture Circulating Tumor Cells of Different Cancer Types
Super-Fast Microscope Captures Circulating Tumor Cells with High Sensitivity and Resolution in Real Time
Jun 25, 2018 | Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Management & Operations, Webinars
Operational efficiencies, strong management teams, and successful outreach business are key clinical laboratory success in today’s era of mergers and acquisitions
Fierce economic headwinds are taking aim at the entire pathology industry, as shrinking Medicare reimbursement rates, shifting federal regulations and compliance requirements, and changing care models squeeze profit margins and threaten valuations of most clinical laboratories and anatomic pathology groups.
The reimbursement rate changes mandated by the Protecting Access to Medicare Act of 2014 (PAMA), which took place January 1, 2018, loom as the most immediate danger to the long-term financial health and viability of medical diagnostic laboratories.
“Medicare reimbursement rates to labs providing essential testing services are estimated to drop by $670 million this year, and additional reductions scheduled for 2019 and 2020 will cut payments by nearly 30% for many tests critical to caring for Medicare beneficiaries,” noted Julie Khani, President of the American Clinical Laboratory Association (ACLA), in “Patient Care Is Put to the Test as Clinical Laboratory Services Are Hit With a One-Two Punch in Rate Cuts,” an article she penned for the ACLA website.
“For some labs, such as rural hospitals and labs serving patients in skilled nursing facilities—which already have significantly higher operating costs—this could be a death knell that would precede a devastating loss of patient access to necessary testing services,” she concluded.
Assessing Financial Solvency to Survive Impending Mergers and Acquisitions
The ACLA has filed a lawsuit against the U.S. Department of Health and Human Services (HHS) for what it called a “flawed and misguided” implementation of the law. For now, however, the roll out of reimbursement rates cuts will continue, an ACLA blog post reports.
As a result, post-PAMA pressures combined with other factors are forcing clinical laboratory leaders to consider their strategic options, including:
- Reorganizing;
- Restructuring;
- Merging/consolidating with another laboratory; and,
- Selling.
As GenomeWeb pointed out prior to PAMA’s implementation, “All clinical labs in the U.S.—from the largest reference labs to in-hospital labs to physician-practice labs—will be touched by the changes to varying degrees.” The future, GenomeWeb predicts, “may be a market with fewer independently operated small and regional labs, as well as fewer outreach labs owned by hospitals. Instead, such operations could become part of [Quest Diagnostics’] and LabCorp’s networks.”
This changing landscape means laboratories need to be assessing their financial solvency and maximizing their valuation even if they are not currently candidates for either side of the merger and acquisition equation. Failing to anticipate and respond to unfolding changes could leave laboratory executives courting a financial reckoning.
Pathway to Driving Valuation for Your Laboratory
To help clinical laboratory owners, CEOs, administrators, and pathologists understand the forces driving today’s mergers, acquisitions, and joint ventures—and to guide their future decision-making—Dark Daily is presenting a new webinar at 1:30 p.m. EASTERN on Thursday, June 28, 2018, titled, “The Pathway to Driving Valuation for Your Laboratory: Your Roadmap to Achieving Success, and How to Sustain Growth Despite a Changing Lab Environment.”
One speaker is Vicki DiFrancesco, Chief Strategy Officer, XIFIN, San Diego. DiFrancesco has an insider’s understanding of mergers and acquisitions and 25 years of executive leadership experience. Prior to joining XIFIN, DiFrancesco served as President and CEO of Pathology Inc., the West Coast’s premier women’s health laboratory, which was acquired by LabCorp in March 2016.
The other speaker is David Nichols, Founder and President at Nichols Management Group (NMG) in York Harbor, Maine. NMG provides laboratory consulting services for healthcare organizations. Since its founding in 1988, NMG has provided expertise in improving overall effectiveness and in implementing such strategies as sales force development, market planning, compliance/financial auditing, and in selected cases, hands-on management responsibilities by working onsite with senior personnel in each area of need.
During their 90-minute presentation, you will learn:
- Market factors creating financial challenges for your laboratory;
- How revenue compression and compliance issues are driving merger and acquisition activity;
- Steps to optimizing your lab’s reimbursements, a key to improving financial performance;
- Revenue cycle management’s importance as a valuation driver;
- Strategies to significantly improve your market position;
- Components of an effective compliance program and why compliance is so important to laboratory valuation;
- Value drivers that attract buyers, such as profitable growth, a strong compliance program, competent management teams, EBITDA, cash flow and gross margins; and,
- Specific challenges that should be addressed in any merger or consolidation plan.
David Nichols (left), Founder and President at Nichols Management Group (NMG); and Vicki DiFrancesco, Chief Strategy Officer, XIFIN, will share vital insights and share critical strategies that clinical laboratories can immediately use to drive valuations and prepare for current and future financial challenges. (Photo copyright: Dark Daily.)
To register for this critical webinar, use this link (or copy and paste this URL into your browser: https://www.darkdaily.com/product/the-pathway-to-driving-valuation-for-your-laboratory-your-roadmap-to-achieving-success-and-how-to-sustain-growth-despite-a-changing-lab-environment/.)
Despite the financial pressure on many existing laboratories, the medical laboratory industry continues to play a vital role in the healthcare system, with clinical laboratory tests guiding more than 70% of all medical decisions made by healthcare providers, according an ACLA fact sheet.
The industry also contributes more than $100 billion in annual economic impact and produces more than 622,400 jobs. While the role of diagnostic laboratories will continue to grow in an era of personalized medicine, only laboratories that optimize their strategic position in response to the changes taking place may be left standing when the predicted industry consolidation is complete.
—Andrea Downing Peck
Related Information:
The Pathway to Driving Valuation for Your Laboratory: Your Roadmap to Achieving Success, and How to Sustain Growth Despite a Changing Lab Environment
Patient Care Is Put to the Test as Clinical Laboratory Services Are Hit with a One-Two Punch in Rate Cuts
ACLA PAMA Lawsuit Complaint Against CMS
Recent NILA Report Highlights Harmful Impacts of Misguided PAMA Implementation on Labs and Seniors
The PAMA Effect: Consolidation of Clinical Labs Expected as Legislation Set to Take Effect
Conference Ends with Optimistic Outlook for Laboratories
Clinical Laboratory Testing: Life Saving Medicine Starts Here
Jun 22, 2018 | Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Managed Care Contracts & Payer Reimbursement, Management & Operations, Webinars
As PAMA brings estimated Medicare reimbursement cuts of up to 30% over the next three years to a range of typically high-volume tests and diagnostics, medical laboratories that wish to stay competitive must understand the needs of managed care payers and learn how to optimize collections, reduce denials, and communicate value effectively or risk their financial health
In what experts have called the biggest financial upheaval for the healthcare industry in three decades, the onset of new Medicare Part B Clinical Laboratory Fee Schedule (CLFS) reductions based on the Protecting Access to Medicare Act (PAMA)—and their continued decrease over coming years—places the financial integrity of clinical laboratories and anatomic pathology groups of all sizes in peril.
Recent years have seen major shifts in consolidation, automation, and efficiency analysis to help streamline both workflows and cashflows. However, the threat from the current and coming cuts to Medicare lab test prices will be particularly acute for smaller independent laboratories and hospital/health system lab outreach programs. These labs will continue to feel added strain due to reduced reimbursement across 25 of the most common tests billed to Medicare.
The Centers for Medicare and Medicaid Services (CMS) and the Office of the Inspector General (OIG) predict that the cuts enacted on January 1, 2018, alone will result in Medicare payments to labs falling by a total of $670 million just in 2018. This amount is almost 70% greater than the $400 million in fee cuts the federal agency had predicted in statements it published last year. (See Dark Daily, “For Top 20 Tests, CMS to Cut Payment by 28% in 2018-2020,” October 9, 2017.)
And, that doesn’t account for subsequent cuts, which are estimated to reach nearly 30% over the next three years.
Cost of Service Disparities/In-Network Status Further Impact Clinical Labs
If the CLFS reductions weren’t enough, labs face another threat—managed care and commercial payers aligning with big national laboratories and narrowing networks in an attempt to lower costs and provide maximum return for both patients and shareholders. For smaller and independent laboratories, this represents a double threat.
In the first situation, larger laboratories can offer services at lower costs due to increased automation, batch processing, and other scale advantages. This means that while the lower CLFS rates will impact the financial integrity of larger labs, the actual margin lost is less than that of smaller laboratories and facilities that face higher costs to perform tests and provide services.
Compounding the situation, commercial and managed care payers searching out the best value for their patients and shareholders tend to narrow their networks by excluding many independent clinical lab companies and hospital lab outreach programs, amplifying this inherent disparity and skewing the advantage away from independent providers yet again.
Higher cost providers without a clear understanding of promoting their value to payers could have trouble obtaining in-network status. Yet, failing to obtain in-network status may reduce overall test quantities, further raise prices, and make smaller labs less competitive with larger national laboratories—a dangerous cycle with today’s competitive laboratory landscape.
Shifting Focus and Optimizing Managed Care Reimbursements
As the financial stability of Medicare reimbursements wanes, it is imperative that laboratories look to new methods to further increase efficiency and stabilize cashflows. Once a smaller portion of laboratory revenue, managed care organizations and commercial payers will be of increased importance as overall reimbursement rates continue to shrink in the face of healthcare reform and value-based care.
Unfortunately, many laboratories assume that by simply providing requested services they are due reimbursement from commercial payers. In the age of value-based care this is no longer the case and considered an outdated mindset—one that can lead to endless audits, increased recoupment costs, and which could drastically impact successful collection from managed care and commercial payers. (See Dark Daily, “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,” October 16, 2015.)
Special June 26 Webinar: Improving Managed Care Reimbursement Efficiency
Understanding not just what these payers are attempting to achieve for their organization—but also how they structure requirements and processes to support their goals—is an essential element of succeeding in this previously smaller share of the marketplace.
For those interested in learning more about critical concerns regarding managed care payers in the post-2018 CLFS landscape, Pathology Webinars is hosting a 90-minute webinar on Tuesday, June 26, 2018, at 2:00 PM Eastern.
The webinar will include presentations from two experts on a range of topics including:
- Actionable steps to absorb the loss of Medicare revenue due to the impact of the 2018 CLFS reductions;
- How managed care payers process network status and payments;
- Who in the managed care chain of command should receive your value proposition;
- How to better align your value propositions, policies, and workflows with the requirements of managed care and commercial payers; and,
- Understanding the roles managed care payers expect clinical laboratories and anatomic pathologists to play in managing and reducing unnecessary testing.
The first speaker, Frank Dookie, MBA, will provide an inside look at:
- How managed care payers function;
- Their requirements and workflows; and,
- What they look for when considering network status for a laboratory.
Dookie is a laboratory professional who has worked on the payer side for 28 years. He is passionate about the role that diagnostics play or can play in healthcare, and has spent his career working for instrumentation providers, clinical laboratories, the intermediary space between laboratories and managed care companies, and managed care companies.
The second speaker, Michael Snyder, will bring the entire payment process into sharp focus. He will cover:
- Optimizing the collection process;
- Identifying the purpose of each step, each review, and each team member involved; and,
- Critical points laboratories must address to ensure payment.
Snyder is the Senior Vice President of Network Operations for Avalon Healthcare Solutions, LLC, a firm that provides comprehensive benefit management services to the health plan industry and has more than 30 years’ experience in clinical laboratory management.
Frank R. Dookie, MBA (left), Contracting Executive with a major managed care company in Woodbridge, N.J.; and Michael Snyder (right), Senior Vice President with Avalon Healthcare Solutions in Flemington, N.J., will provide critical insights and actionable details for clinical laboratory and anatomic pathology group leaders who want to ensure future revenues.
An Essential Opportunity to Improve Your Reimbursements
This critical webinar offers anatomic pathology groups and medical laboratory managers essential information and actionable next steps to immediately leverage the potential of managed care payers. Additionally, it provides insider insight to laboratories straining to retain financial integrity as reduced reimbursements and increased regulatory burdens strain budgets and cashflows.
To register for the webinar and see further details about discussion topics, use this link (or copy and paste the URL into your browser: https://pathologywebinars.com/current/managed-care-an-insiders-guide-to-improving-your-reimbursement-efficiency-with-strategies-that-work-626/).
As further Medicare payment reductions over the next three years drive reimbursements even lower, understanding how to capture the positive attention of payers—while working within the rules and policies driving their reimbursement decisions—will be an essential element of successful laboratory management and growth. Register now!
—Jon Stone
Related Information:
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
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
Tougher Lab Regulations and New Legal Issues in 2018: More Frequent Payer Audits, Problems with Contract Sales Reps, Increased Liability for CLIA Lab Directors, Proficiency Testing Violations, and More
Coming PAMA Price Cuts to Medicare Clinical Lab Fees Expected to Be Heavy Financial Blow to Hospital Laboratory Outreach Programs
What Every Lab Needs to Know about the Medicare Part B Clinical Laboratory Price Cuts That Take Effect in Just 157 Days, on Jan. 1, 2018
Medicare Clinical Laboratory Price Cuts and Cost-cutting Predicted to be 2018’s Two Biggest Trends for Medical Laboratories in the United States
Jun 20, 2018 | Laboratory Hiring & Human Resources, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing
Medical laboratories prepared to receive direct payments for services rendered will have an advantage as more physicians’ practices convert to concierge medicine and stop taking insurance or Medicare
A growing number of physicians are looking at new care delivery models as increasing costs and narrow networks drive patients into high-deductible health plans (HDHPs). These can include concierge medicine and direct primary care. Clinical laboratories and anatomic pathology groups will need to adapt to these new models of healthcare.
Concierge medicine is basically an alternative medical practice model. Its main benefit is providers see far fewer patients and can provide higher-quality care to patients who can afford to pay the fees. Dark Daily reported on this growing trend as far back as 10 years ago (see, “More Doctors Consider Concierge Medicine as Healthcare Reform Looms,” June 8, 2009), and as recently as this year (see, Some Hospitals Launch Concierge Care Clinics to Raise Revenue, Generating both Controversy and Opportunity for Medical Laboratories, April 23, 2018.)
Now, a new payment program called Direct Primary Care (DPC), which is emerging as an alternative to traditional health insurance plans, could further help patients in HDHPs—and the uninsured—afford quality healthcare.
The main difference between DPC and concierge medicine lies in how doctors get compensated. Monthly membership fees are usually the only source of revenue for DPC practices and they do not accept any type of insurance. Concierge practices, on the other hand, bill insurance companies and Medicare for covered medical services and collect membership fees for services that are not covered.
In general, if a third-party payer is not involved, the practice is considered Direct Primary Care.
DPC versus Concierge Medicine: How Do They Compare?
Direct Primary Care is an offshoot of concierge medicine and the two terms are often used interchangeably. Although similar, there are distinct differences between the two models of care.
Concierge medicine was created in the mid 1990’s and was originally used by wealthy patients who were willing to pay a high subscription fee for access to select physicians. However, this model has changed over the years, making concierge medicine economically available to lower income individuals as well.
According to Concierge Medicine Today, the majority of concierge medicine plans cost between $51 and $225 per month in 2017. Eleven percent of concierge plans charge less than $50, and 35% cost more than $226 per month. There are some high-end concierge plans that can cost upwards of $30,000 per year.
Direct Primary Care was started in the mid 2000’s as an insurance-free plan mainly for the uninsured. In 2015, the Journal of the American Board of Family Medicine reported that the average monthly cost for patients on a DPC plan was $93.26 among the 116 practices they surveyed. The range in costs at that time was $26.67 to $562.50 per month. They also found that practices that identified themselves as “Direct Primary Care” charged a lower fee on average than concierge practices.
The patient base also varies between the two types of practices. According to Cypress Concierge Medicine in Nashville, Tenn., DPC physicians usually treat younger patients with an annual household income of less than $50,000, while concierge medicine doctors typically treat patients over the age of 45 who have an annual household income of $75,000 or more.
Physicians in both plans try to limit the number of patients they serve to a few hundred to ensure they can provide the best possible care to their clients.
Physicians Like Direct Primary Care Programs
DPC physicians charge a monthly membership fee for their services based on the patient’s age, the type of practice, and the number of individual family members on the DPC plan. The monthly fee includes routine office visits—usually with no co-pays—and almost constant access to a physician through telemedicine technology.
DPC plans also provide same or next-day appointments for members and offer lower costs for pharmaceuticals and lab tests.
Direct Primary Care programs are attractive to physicians who often feel overworked by too many patients, too much tedious paperwork, too much time dealing with insurance companies and too little time to provide quality care.
“There are thousands of physicians in career crisis who are investigating new ways to practice medicine and in essence, love going to work again,” noted Michael Tetreault, Editor-in-Chief of The DPC Journal.
Jeffrey Gold, MD, a Family Practice specialist in Marblehead, Mass., left his position with a successful physicians group to launch his own DPC practice.
“It’s really blue-collar concierge medicine,” Gold told the Boston Globe. He added that his former practice model “was all about volume and coding and how many people a day you can see.”
“I couldn’t do it anymore,” he admitted. “It was not aligned with how I grew up thinking about medicine.”
DPC/Concierge Practices Expected to Increase in Numbers
With a growing number of patients in high-deductible health plans, concierge medicine and DPC practices are expected to increase in number. According to Direct Primary Care Frontier, an online resource that supports DPC, in 2014 there were only 125 DPC practices in the US. However, by April of 2017, that number had jumped to 620, and as of March 2018, the estimated number of DPC practices was 790.
Similarly, in 2010, there were between 2,400 and 5,000 concierge medical practices in the US, and by 2014, that number had increased to 12,000, according to the American Journal of Medicine.
Like concierge medicine, Direct Primary Care clients present a relatively new method for clinical laboratories to succeed and be profitable. Because there is no need to be in insurance networks—and patients pay cash for lab tests—DPC patients may prove to be an excellent source of business for medical laboratories that can adapt to DPC practices.
—JP Schlingman
Related Information:
A New Kind of Doctor’s Office That Doesn’t Take Insurance and Charges a Monthly Fee is ‘Popping up Everywhere’ and That Could Change How We Think About Healthcare
Medicine vs. Direct Primary Care
Direct Primary Care and Concierge Medicine: They’re Not the Same
4 Distinguishing Differences Between Direct Primary Care and Concierge Medicine
Direct Primary Care: Practice Distribution and Cost Across the Nation
List of What Worked and Didn’t in DPC from 2016
How These Doctors Bypass Insurance Companies
Concierge Medicine is Here and Growing!!
More Doctors Consider Concierge Medicine as Healthcare Reform Looms
Some Hospitals Launch Concierge Care Clinics to Raise Revenue, Generating both Controversy and Opportunity for Medical Laboratories
Jun 18, 2018 | Laboratory Hiring & Human Resources, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Managed Care Contracts & Payer Reimbursement, Management & Operations
Clinical laboratories will want to develop value-based lab testing services as the nation’s largest health insurers prepare to engage with Medicare Advantage patients in record numbers
UnitedHealth Group (UNH), the nation’s largest health insurer, forecasts wildly impressive growth of Medicare Advantage plans and value-based care. If this happens, it would further shrink the proportion of fee-for-service payments to providers, including medical laboratories.
Changes to how clinical laboratories and anatomic pathology groups in America get paid have been the subject of many Dark Daily briefings—such as, “Attention Anatomic Pathologists: Do You Know Medicare Is Prepared to Change How You Are Paid, Beginning on January 1, 2017?” August 22, 2016—and many others since then.
Switching to a value-based care reimbursement system, administered through Medicare Quality Payment Programs (QPPs), is one of the more disruptive changes to hit physicians, including pathologists. And, given UnitedHealthcare’s predictions, healthcare system adoption of QPPs will likely accelerate and continue to impact clinical laboratory revenue.
50% of All Americans in Value-based Care Systems by 2028
UnitedHealth Group also envisions more than 50% of seniors enrolled in Medicare Advantage plans within five to 10 years, up by 33% over current enrollments, Healthcare Finance reported.
“Where it can go, hard to tell, but I don’t think it’s unreasonable to think about something north of 40% and approaching 50%. It doesn’t seem like an unreasonable idea,” said Steve Nelson, CEO, UnitedHealthcare, a division of UnitedHealth Group, during the earnings call.
In light of UNH’s widely-publicized comments, clinical labs should consider:
- Preparing strategies to reduce dependence on fee-for-service payments;
- Developing diagnostic services that add value in value-based reimbursement arrangements.
For labs, more seniors in Medicare Advantage plans means fewer patients with Medicare Part B benefits, which cover tests in a fee-for-service style. In contrast, Medicare Advantage plans are marketed to seniors by companies that contract with Medicare. These insurance companies typically restrict their provider network to favor clinical laboratories that offer them the best value.
Why Insurers Like Medicare Advantage Plans
UnitedHealth Group is not the only insurer anticipating big changes in the Medicare Advantage market. Humana (NYSE:HUM) of Louisville, Ky., is reallocating some services from Affordable Care Act health insurance exchange plans to the Medicare Advantage side of the business, Healthcare Dive reported.
According to a Kaiser Family Foundation (KFF) report, these insurers are ranked by number of enrollees in Medicare Advantage plans:
- UnitedHealthcare—24%;
- Humana—17%;
- Blue Cross Blue Shield affiliates—13%.
Healthcare Dive noted that, in a volatile healthcare industry, payers seem to prefer the stability and following benefits of Medicare Advantage plans:
- Market potential, as evidenced by growing elderly population;
- Good retention rate of Medicare Advantage customers; and
- Favorable payments by the Centers for Medicare and Medicaid Services (CMS) to the insurers.
Cleveland Clinic Makes Deals with Humana, Blue Cross Blue Shield
Last year, Cleveland Clinic and Humana announced creation of two Medicare Advantage health plans with no monthly premiums or charges for patients to see primary care doctors, and no need for referrals to in-network specialists, according to a joint Humana-Cleveland Clinic news release.
And, along with Anthem Blue Cross and Blue Shield in Ohio, Cleveland Clinic also launched Anthem MediBlue Prime Select, a Medicare Advantage HMO plan with no monthly premium, a news release announced. For most of their care needs, members access Cleveland Clinic hospitals and physicians.
Control Costs as Medicare Advantage Plans Grows
These examples highlight the necessity for clinical laboratories to prepare as the Medicare Advantage program expands and accompanying networks narrow.
“Medicare Advantage plans will result in more pressure on providers [such as clinical laboratories] and hospitals to focus on the cost of care,” said Michael Abrams, Managing Partner at Numerof and Associates, told Healthcare Dive.
With an exploding elderly population, medical laboratories should analyze what the shift to value-based care and Medicare Advantage plans may mean for their revenues.
—Donna Marie Pocius
Related Information:
UnitedHealth Group’s David Wichmann on Quarter1 2018 Results, Earnings Call Transcript
UnitedHealth Group Grows First Quarter Profits Driven by Medicare Advantage
Medicare Advantage Will Have More Enrollment, Lower Premiums in 2018
Payers are Flocking to the Medicare Advantage Market
Medicare Advantage 2017 Spotlight on Enrollment Market Update Issue Brief
Medicare Advantage Benefits
UnitedHealth Group Predicts 50% of Seniors Will Choose Medicare Advantage
Medicare Advantage Plans Keep Growing
Cleveland Clinic and Humana Create Two New Zero Premium Medicare Advantage Plans
Anthem Blue Cross Blue Shield Ohio Collaborate to Deliver Integrated Care
Attention Anatomic Pathologists: Do You Know Medicare Is Prepared to Change How You Are Paid, Beginning on January 1, 2017?
Jun 15, 2018 | Laboratory Hiring & Human Resources, Laboratory Management and Operations, Laboratory Pathology, Laboratory Testing
Often when a hospital health system buys an independent physicians’ practice, the new owner would like its clinical laboratory to serve that medical group
After a hospital or health system buys a physicians’ practice, it is common that the new owner has its in-house medical laboratory provide lab testing to the newly-acquired medical group. Such a purchase is generally good for hospital labs, but not so good for any independent lab that, prior to the sale, had been serving the newly-sold medical practice.
Therefore, when hospitals purchase thousands of physician practices, the impact on the nation’s independent clinical laboratories has the potential to be significant. That’s one conclusion contained in a newly updated report based on co-research by Physicians Advocacy Institute (PAI) and Avalere Health, a healthcare and life sciences consulting firm headquartered in Washington, D.C.
Clinical Laboratory Test Orders Drop as Physicians Join Hospital Staff
According to a PAI news release, hospitals acquired 5,000 independent physician practices between July 2015 and July 2016. Building on a previous Avalere-PAI study, the data suggest that over four years (from mid-2012 to mid-2016) the percentage of hospital-employed physicians increased by more than 63%. In other words, 42% of doctors were employed by hospitals in July 2016, as compared to 25% of doctors in July 2012, a proportion that nearly doubled in just four years!
As more physicians move from owning their private practice to becoming employees of the new owner, independent labs serving those medical practices are at risk of losing the lab test referrals from the practice.
Of course, this can be a boon for hospital-based or healthcare system labs that see an uptick in lab test referrals, as more physician practices or outreach customers join the hospital team. However, surveys show, for hospitals, acquiring and owning more doctors’ practices can be problematic.
“As payers and hospitals continue [to] drive consolidation across the healthcare system, it is becoming more and more difficult for a physician to maintain an independent practice,” stated Robert Seligson (above), PAI President and CEO of the North Carolina Medical Society, in the PAI news release. “Payment policies mandated by insurers and [the] government heavily favor large health systems, creating a competitive advantage that stacks the deck against independent physicians, who are already struggling to survive under expensive, time-consuming administrative and regulatory burdens.” (Photo copyright: Physicians Advocacy Institute.)
The newest data, released by PAI in 2018, suggest that from July 2015 to July 2016 hospitals were actively buying physician practices:
- 5,000 physician practices were acquired by hospitals;
- 8% to 47% growth in hospital-owned practices in every region of the U.S.; and,
- More than 33% of Midwest physician practices were hospital-owned in 2016.
The data also indicated that more doctors had chosen to become employed by healthcare systems, giving up their independent status. From mid-2015 to mid-2016:
- 14,000 more physicians became hospital employees;
- 11% increase in employed physicians; and
- 5% to 22% growth of hospital-employed doctors in every U.S. region, with more than 50% in the Midwest, 37% in the south, and 33% in Alaska and Hawaii.
This has had the expected impact on hospital finances. The 2017 American Medical Association (AMA) Physician Practice Benchmark Survey suggests hospital purchases of medical groups appear to be slowing, as hospitals’ cost to employ physicians increases, Modern Healthcare noted.
“Physician compensation is one of the fastest growing expenses in health systems. It has become as high as 10% of total expenses for some systems. The burden is not sustainable,” Joel French, Chief Executive Officer, SCI Solutions, told Modern Healthcare.
Medicare Pays More to Hospitals for the Same Services
The PAI-Avalere report also noted that Medicare pays more for certain services when performed in hospital outpatient departments instead of doctors’ offices.
A blog post in the American Journal of Managed Care (AJMC) detailed a few of the differences:
- $5,148 for hospital cardiac imaging compared to $2,862 in a doctor’s office;
- $1,784 for a colonoscopy in-hospital versus $1,322 in a physician’s office; and,
- $525 for in-hospital evaluation and management services compared to $406 in the doctor’s office.
“The shift toward more physicians employed by hospitals could mean higher costs for the entire healthcare system,” Kelly Kenney, PAI Executive Vice President, stated in the PAI news release.
Practice Ownership Effects Quality of Care
While the PAI-Avalere analysis explored physician employment’s impact on payment for some services, another study explored its effects on quality of care.
Researchers analyzed data from three national surveys of physician practices. Their report, published in the American Journal of Managed Care (AJMC), found that in hospital-owned physician practices, there was more use of recommended care management processes (CMPs), such as, disease registries and nurse coordinators.
“The current findings suggest that hospital acquisition of practices may have beneficial effects for patients with chronic illnesses,” the researchers wrote in AJMC.
As medical groups change owners, independent clinical laboratories must work hard to retain the testing business—especially when the new owner is a hospital or healthcare system with its own in-hospital medical laboratories.
—Donna Marie Pocius
Related Information:
Updated Physician Practice Acquisition Study: National and Regional Changes in Physician Employment 2012-2016
Five Thousand Independent Physician Practices Acquired by Hospitals in 12 Months
Hospital Ownership of Physician Practices Increases Nearly 90% in Three Years
Hospital Acquisition of Independent Physician Practices Continues to Increase
American Medical Association Physician Practice Benchmark Survey
For the First Time Ever, Less Than Half of Physicians are Independent
Trends in Hospital Ownership of Physician Practices and the Effect on Processes to Improve Quality
