These new additions to the Synaptic Health Alliance demonstrate an increasing belief among insurers that blockchain will improve the accuracy and exchange of critical healthcare data
Is blockchain technology ready for widespread use within healthcare? New developments show a growing interest among major health insurers to incorporate blockchain technology into their ongoing operations. As this happens, clinical laboratories will need a strategy, since a large proportion of all health data is made up of medical laboratory test results.
Dark Daily previously reported on how blockchain technology—with its big data and systemwide integration to existing healthcare provider directories—could alter how clinical laboratories obtain/store testing information and bill/receive payment for services rendered. We also covered how blockchain could enable insurers to instantly verify beneficiary’s coverage and attain interoperability between disparate electronic healthcare record (EHR) systems, including laboratory EHRs.
Now, insurers Aetna and Ascension have joined founding members UnitedHealthcare,Multiplan, Quest Diagnostics, Optum, and Humana in the Synaptic Health Alliance (SHA). These organizations formed SHA last year to “leverage [blockchain] technology to facilitate reaching across industry and competitive lines, creating a provider data exchange—a cooperatively owned, synchronized distributed ledger to collect and share changes to provider data,” according to the organization’s website.
What should be on the
minds of every hospital and independent medical laboratory administrator is
what will be required to engage in information exchange with such a
distributed, non-centralized provider ledger.
What is Blockchain and How Does it Apply to Healthcare and Diagnostic
Providers?
The SHA defines
blockchain as “a shared, distributed digital ledger on which transactions are
chronologically recorded in a cooperative and tamper-free manner [such as a] spreadsheet
that gets duplicated multiple times across a network of computers, which is
designed to regularly update the spreadsheet.”
Though the SHA’s efforts are still being tested, medical laboratories and pathology groups should note how Quest’s “physical relationship” with healthcare providers—as Jason O’Meara, Senior Director of Architecture at Quest Diagnostics describes it—gives the blood company an advantage. “The first day a practice opens up, they need internet, a telephone provider, and they have to have a diagnostics provider,” he told FierceHealthcare.
“Each of our organizations expends a tremendous amount of
energy and effort trying to get this data as good as it can be,” O’Meara
continued. “The challenge is—when we’re doing this in independent silos—it
leads to duplication of efforts.”
O’Meara notes that while health plans collect needed
information for months after a new practice opens, Quest often knows of these
new locations “several weeks in advance” because new locations need supplies
and the capability to order diagnostic tests from day one.
This physical-relationship advantage applies to all clinical
laboratories, because they often are the first to know—and provide supplies
to—new provider offices.
This informative video describes three ways blockchain will change healthcare. Click here to view the video or click on the image above. (Photo/video copyright: The Medical Futurist.)
Trimming Costs
through Redundancy Elimination
Federal regulations require healthcare providers and payers
to maintain frequently updated directories of care providers and services. These
directories are then used across and between health networks to determine
service availability, coverage options, and other critical elements related to obtaining
care and reimbursements.
“Who weren’t accepting new patients despite the
directory saying that they were; and,
“Incorrect or disconnected phone numbers.”
In other words, CMS found that in its own MAO directories, about
half of the information enrollees need to make important healthcare choices is either
incorrect or out of date!
The SHA intends to change that by using blockchain to create
a shared, up-to-the-minute accurate resource with interoperability between all
participating providers.
By allowing alliance participants to consolidate directory
updates, the system could eliminate silos and drastically reduce time and money
spent applying updates to directories individually at each provider.
“We want this to be a public utility that every health plan
and provider can participate on,” O’Meara
told FierceHealthcare. “There’s no
other technology we’re aware of that would allow for that type of robustness.”
Other Efforts to use
Blockchain in Healthcare
In January, HealthPayerIntelligence (HPI) outlined another strategic initiative similar to the SHA involving Aetna, Anthem, Health Care Service Corporation (HCSC), IBM, and PNC Bank to create a “health utility network” using blockchain technology “to improve data accuracy for providers, regulators, and other stakeholders, and give our members more control over their own data.”
Lori Steele, Global Managing Director for IBM Healthcare and Life Sciences, told HPI that“blockchain’s unique attributes make it suitable for large networks of members to quickly exchange sensitive data in a permissioned, controlled, and transparent way.”
She continued, “The fact that these major healthcare players
have come together to collaborate indicates the value they see in working
together to explore new models that we think could drive more efficiency in the
healthcare system and ultimately improve the patient experience.”
As medical laboratories continue to endure the financial pressures of healthcare reform, blockchain appears to offer yet another way to increase efficiencies, improve accuracy and accountability, and exchange data between disparate information systems.
While many possible uses for this technology remain in
proof-of-concept and pilot-testing phases, pathologists and medical laboratory
administrators looking to stay ahead of trends will want to keep up with
blockchain as it continues to mature.
Medicare officials are including most hospital laboratories in this PAMA data reporting cycle, but hospitals face $10,000/day federal penalties for not filing, filing late, or filing incomplete or inaccurate data
Clinical laboratories operated by hospitals and health systems could prove to be a game changer for the lab industry in this upcoming PAMA private payer lab test price reporting cycle. But that upside comes with risk.
For this reporting period, the federal Centers for Medicare and Medicaid Services (CMS) has defined any hospital laboratory that uses the CMS 1450 14X to bill for Medicare Part B clinical laboratory tests as an “applicable laboratory” under the Protecting Access to Medicare Act of 2014 (PAMA). That means a majority of hospital labs in the United States are required to report the prices they were paid by private health insurers to CMS.
This makes the current PAMA reporting period a high-stakes
endeavor, because unprepared clinical laboratories could face federal fines of
$10,000/day. The reporting eligibility requirements are broad and may leave unprepared
clinical laboratories at significant risk.
“Receive more than 50% of their Medicare revenues from laboratory and physician services during a data collection period.
“Laboratories will collect private [payer] data from January
1, 2019, through June 30, 2019, and report it to CMS by March 31, 2020.”
In addition to shrinking margins, increased competition,
reduced reimbursement rates, and ever-changing regulations, clinical
laboratories now face new fines that could prove financially catastrophic for
even the largest, most efficient labs.
New Rules and
Reporting Requirements Threaten Unprepared Labs
Healthcare reform continues to reshape how healthcare is both delivered and billed across the country. GenomeWeb reported in 2017 that CMS expects PAMA to save the government $3.93 billion by 2028.
While medical laboratories continue to grapple with the
impact of reduced reimbursement rates under PAMA’s revised CLFS final rule, the
new rules for what constitutes an “applicable lab” and the new reporting
requirements that started January 1, 2019, add yet another level of complexity
to reporting and compliance concerns.
Rodney Forsman, Assistant Professor Emeritus of Lab Medicine and Pathology at the Mayo Clinic College of Medicine, in Rochester, MN, told Dark Daily that “Laboratories must work to identify reporting concerns, billing and IT limitations, and identify current statutes and limitations to present to compliance officers and stakeholders. Failure to do so could leave labs liable for fines of up to $10,000 per day.”
Compliance Will Be a
Team Effort
He further emphasizes that compliance with reporting
requirements will involve a range of stakeholders within the hospital and its
laboratory. Information technology (IT) teams, compliance officers, laboratory C-suite
executives, and billing departments all will play a role in implementing the
changes needed and reporting the data required.
Therefore, understanding exactly what regulations require—and
what is at stake—is crucial to not only implement critical changes, but to ensure
that the lab understands and is on-board with said changes.
Considerations include:
Understanding the new collection and reporting
periods;
Assessing billing and IT limitations in relation
to reporting requirements; and,
Implementing proper data capture and validation
systems ahead of data submission.
Rodney Forsman (left), Assistant Professor Emeritus of Lab Medicine and Pathology at the Mayo Clinic College of Medicine, and Brian Kemp (right), Vice President of Change Healthcare, stress that a current understanding of PAMA’s impact is crucial and that clinical laboratories are at considerable risk if they are not compliant with the latest PAMA requirements. (Photo copyright: Dark Daily.)
This important webinar will include:
A brief overview of PAMA;
The latest updates to PAMA reporting
requirements; and,
Actionable information for applicable labs
required to meet them.
The speakers will also cover concerns for hospital outreach programs and specific CMS 1450 14X Type of Bill (TOB) billing changes to help hospital COOs, CFOs, CIOs, contract officers, and compliance officers understand the latest implications of ongoing PAMA requirements.
Laboratory directors, managers, administrators, and IT and
billing staff will want to attend this critical webinar to learn essential PAMA
reporting considerations and pitfalls to avoid.
(To register for this
critical Feb. 20th webinar, click here. Or, copy and paste this URL into your browser: https://www.darkdaily.com/webinar/pama-in-2019-what-labs-need-to-know-to-collect-data-report-on-time-and-avoid-10000-per-day-penalties/.)
With a now-estimated price tag of $16.1 billion, federal regulators and government representatives question the VA’s replacement for their VistA medical records system
Originally estimated to cost $10 billion, a contract to
replace the federal Department of Veterans
Affairs (VA) electronic
health record (EHR) system will now cost $16.1 billion, according to new
estimates, and this has drawn increased scrutiny from regulators and the media.
ProPublica reports that the initial
deal signed in May 2018 between the VA and Cerner,
one of the nation’s largest vendors of laboratory
information systems (LIS) and anatomic pathology information systems,
included a $10-billion ‘no-bid’ contract to replace the VA’s aging VistA medical records system
over 10 years. Since then, that estimate has ballooned to $16 billion, and with
this latest increase, is now at $16.1 billion.
One ongoing challenge facing clinical
laboratories and anatomic
pathology groups is maintaining interfaces to the plethora of disparate EHR
systems implemented in healthcare networks across the country. It’s a costly
undertaking that has nearly bankrupted many healthcare providers.
Thus, these developments could impact how medical
laboratories and pathology groups work and communicate with the VA in the
future and are worth paying attention to.
In response, John Windom,
Executive Director of the federal government’s Office of Electronic Health Record Modernization (OEHRM), told the House Committee that the VA’s
original estimate failed to include roughly $35 million/year for VA government employee
costs over the decade-long Cerner contract.
“We have to have highly qualified subject matter experts to
grade the implementation efforts of Cerner. Those people in the industry cost
money,” noted Windom, Health Data Management reported.
This review hearing came just after ProPublica reported on a progress report where Cerner had assigned
an alert rating of “yellow trending toward red” to the VA’s EHR implementation efforts.
“It scares the hell out of me,” Ken Kizer, MD, MPH, CEO of health information technology (HIT) developer Medsphere Systems, and former Under Secretary for Health at the VA, told ProPublica. “I don’t think the VA, given other issues, has the luxury to have something that doesn’t work.” (Photo copyright: UC Davis Health.)
Deploying a new EHR in a system as large as the VA is a
highly complex operation. Adding in government oversight—and coordinating
development and deployment between all the parties involved—further complicates
the VA and Cerner’s efforts.
One complication not receiving much coverage is the fact
that EHR systems designed primarily for insurance billing purposes may be
incompatible with the needs of the VA and other federal agencies that do not
bill insurance companies.
“VA is different. The focus of the VA’s electronic medical
record is never about clinical documentation to support billing. It’s about
giving the information to the provider at the right time to inform the best
care. There are true risks to patients if they don’t do this right,” Heather
Woodward-Hagg, PhD, former National Program Director (Acting), Veterans
Engineering Resource Centers (VERC) and Founding Director, Veterans Affairs
Center for Applied System Engineering (VA-CASE), told ProPublica.
Nevertheless, according to coverage of the Review Committee
hearing by MeriTalk, Windom remains hopeful
that the project’s financials will improve. “There are going to be efficiencies
gained we can’t forecast at this point,” he told the Committee members.
According to MeriTalk, the original deal between
the DoD, Cerner, and Leidos in 2015 was estimated
at $4.3 billion. However, in July 2018, the DoD increased the project budget by
$1.2 billion—bringing the total estimate to $5.5 billion.
Still, this falls far short of the VA estimate of $16.1
billion leaving regulators and media outlets questioning the health and
oversight of the Cerner/VA project.
The VA estimate also is well above the cost of other notable
EHR implementations—such as the development and deployment of Kaiser
Permanente’s HealthConnect EHR.
Speaking with InfoWorld in 2013, Philip Fasano, then CIO
of Kaiser Permanente, noted
that it cost roughly $4 billion to build a system alongside Epic to serve their
9-million members. When asked what it would take to implement a similar system
nationally, he estimated costs in the “tens of billions.”
The Hidden Costs of
EHR Implementation
Speaking with Becker’s Hospital Review in 2016, Eric Helsher, Vice
President of Client Success at Epic, highlighted
how difficult it is to budget for such upgrades. “It’s misleading to say, ‘A
hospital is undergoing a $X million Epic
implementation,’ because the install includes far more than simply the Epic
software,” he said. “An EHR from any vendor requires technology like servers
and storage to house the software—be it on-premise
or in the Cloud—and laptops and mobile devices to access it. That would be like
if you go buy a fully loaded laptop and attribute that full cost to Microsoft
Word. You needed the computer to get Word.”
Whether the VA and Cerner can determine ways to bring the
contract in line with budgets remains to be seen. However, while healthcare
reform highlights EHR implementation and interoperability as major concerns in
the modern US healthcare landscape, the VA’s latest attempts at replacing their
VistA medical records system serves as a reminder of the complexity and hidden
costs facing healthcare providers working to meet healthcare reform
requirements and offer a more personalized care experience.
This, of course, applies equally well to clinical
laboratories.
Experts are skeptical of the value of public price lists based on hospital chargemasters due to complexity and poor reflection of actual costs
In another big step toward helping consumers view prices of medical procedures when selecting providers, the Centers for Medicare and Medicaid Services (CMS) passed the IPPS/LTCH PPS final rule, which requires hospitals to post a full list of hospital pricing information on their websites starting January 1, 2019.
Clinical laboratories, anatomic pathologists, and other diagnosticians doing business with their local health networks will now find their prices for tests and procedures listed on the hospitals’ chargemasters available to the public.
To meet rule requirements, pricing information posted by hospitals
must be:
• Published online in a publicly accessible place;
• Machine-readable;
• Downloadable to a spreadsheet; and,
• Updated at least once per year.
Outside of these requirements, the guidelines are vague. However,
based on coverage of initial pricing lists, additional revisions are expected.
A fact sheet discussing the major provisions of the final rule (CMS-1694-F), can be downloaded from the Federal Register.
Are the Price Lists
Accurate?
One of the biggest issues cited by the media relates to the
accuracy of pricing information. As most hospitals are posting data directly
from their chargemaster listings, the numbers listed for the public are likely
to differ from the actual prices billed. Final charges depend on each patient’s
insurance plan and the network status of the healthcare facility rendering the services.
While hospitals are now required to post their price lists in a machine-readable format, MedCity Newsreports that many facilities use medical codes and terminology in price lists that the average consumer might not understand.
To further compound the issue, many items are listed
individually. This requires consumers to go through thousands of price listings
and combine the listed prices one by one to get an estimate of total costs for
a procedure.
Brenda L. Reetz, CEO of Green County General Hospital in Indiana also spoke with the NYT, saying, “We’ve posted our prices, as required. But I really don’t think the information is what the consumer is actually wanting to see.”
“While many hospitals have said chargemaster information can be confusing for consumers, let me be clear, hospitals don’t have to wait for us to go further in helping their patients understand what care will cost. We look forward to more facilities exceeding our requirements,” Seema Verma (above right), Administrator, Center for Medicare and Medicaid Services (CMS), told Modern Healthcare. (Photo copyright: Fox Business.)
Concerns of Increased
Risk for Both Hospitals and Consumers
“There is no more powerful force than an informed consumer,” said Alex Azar II, Secretary of the US Department of Health and Human Services (HHS) during a speech to the Federation of American Hospitals (FAH). “There is no turning back to an unsustainable system that pays for procedures rather than value. In fact, the only option is to charge forward—for HHS to take bolder action, and for providers and payers to join with us,” he concluded.
But with the higher rates found on most hospital chargemasters,
and the difficulty in finding true costs using the new public pricing lists, some
experts are concerned the lists might cause an adverse reaction.
“We do not want patients to forgo needed care,” Tom Nickels, Executive Vice President for Government Affairs and Public Policy at the American Hospital Association (AHA), told Newsweek. “Especially if the quoted price is for the total cost of the service and not what the patient will be expected to pay out-of-pocket.”
This is a real risk. Hospitals and other healthcare
providers already are experiencing reduced volumes due to patients opting out
of important procedures because of cost worries. Chargemaster lists that do not
reflect the true impact of insurance, charity programs, and other variables could
exacerbate that problem.
And there is specific risk for clinical laboratories, as
they rarely have a public-facing element within hospitals. Physicians order medical
laboratory tests and patients either do or do not comply. There is no
opportunity for laboratories to explain that prices listed on the hospital site
might not reflect actual out-of-pocket costs. Could this be an opportunity for
enterprising clinical laboratory managers?
Future Transparency
Trends
“I think putting those prices out there—even with the acknowledgment that these aren’t the prices anyone pays unless they’re uninsured—may indeed still provoke conversations with hospital administrators,” Michael Abrams, Managing Partner of Healthcare Consultancy at Numerof and Associates, a strategic management consultant for the global healthcare sector, told MedCity News.
While experts might not find much value in the current
iteration of price lists, and the latest attempt to improve pricing
transparency by CMS, it offers medical laboratories and hospitals an
opportunity to assess current pricing models and decide how to best communicate
value to consumers as pricing transparency continues to mature and the US
shifts to value-based healthcare.
Experts blame insurance regulators for not ensuring the adequacy of healthcare networks that include hospital-based physicians, such as pathologists and radiologists
According to a recent study, clinical laboratories, anatomic pathologists, radiologists, and anesthesiologists top the list of providers who bill patients for the difference between what they charge for their services and a hospital’s contracted reimbursement rates.
This so-called “balance-billing” not only causes hardship for patients and consumers already shouldering a larger portion of their healthcare costs, but poses a public relations concern for service providers across the US healthcare industry as well.
Following public outcry from patients who received care at
what they believed to be in-network medical facilities, only then to be surprised
by bills from their care providers for the remaining balance not covered by
their insurance, the practice of balance billing has drawn increased scrutiny from
state and federal officials.
Medical Laboratory
Charges Top Reason for Surprise Bills
In their report, NORC notes that of those surveyed, 57% (567 individuals) acknowledged receiving a surprise medical bill they thought would be covered by their health insurance.
When asked about the network status of the doctor who
provided care during the episode related to the surprise bill, 79% responded
that charges were not for doctors being out-of-network for their insurance
plan. Medical laboratory-related charges were near the top of reasons patients
received surprise bills, with 51% of individuals receiving bills related to “a
laboratory test, like a blood test.”
Such surprise medical bills received frequent coverage in
2018. This has led many states to enact or discuss legislation to address the
practice and offer cost protections for patients.
Thus far, however, little change to existing regulations and
contract systems has been enacted to protect patients or help laboratories and
other service providers offer alternative payment solutions for patients.
There also are few requirements for insurance providers to verify
that plans include sufficient numbers of in-network service providers when
offering plans to consumers.
“Many news stories on ‘surprise’ billing blame physicians, because the bill is sent from the doctor’s office or billing company. But the insurance industry is the real culprit, in concert with insurance regulators who have not acted to require network adequacy,” R. Bruce Williams, MD (left), President, College of American Pathologists (CAP), and Geraldine B. McGinty, MD (right), Chair of the American College of Radiology Board of Chancellors, wrote in STAT. (Photos copyrights: College of American Pathologists/Geraldine McGinty.)
States Move to Change
Trends While Patients Continue to Experience Bill Shock
States are beginning to address surprise billing concerns ahead of action by insurance regulators and the federal government. In December, the Arizona Department of Insurance issued a news release outlining the agency’s plan to allow for arbitration questions for surprise out-of-network bills.
And, California effectively banned out-of-network billing from groups within in-network facilities in 2017 with Assembly Bill 72. However, the state only finalized reimbursement rates for service providers and patients affected by surprise bills in January of this year according to Capital Public Radio.
Many of these state-level regulations do not account for the complexity of creating rules based on emergency or non-emergency care or the insurance providers in question. For example, Assembly Bill 72 does not apply to “Medicare, Medi-Cal, out-of-state plans, self-insured employer plans, or other products regulated by federal law,” according to a news release from the California Society of Anesthesiologists.
Finding Fair
Solutions for Both Patients and Care Providers
Speaking with Kaiser Health News about a report of a man in Texas receiving a $109,000 surprise bill related to treatment after a heart attack, Rep. Lloyd Doggett of Texas said, “This is a nationwide problem, and we need a nationwide solution. We have a system where the patient, the most vulnerable person of all those involved, is caught between the insurer and the healthcare provider … these problems are solvable.”
Modern Healthcarerecently covered how some hospitals are now requiring physicians to go in-network as a provision of their contracts. However, they also note this approach disadvantages physicians and shifts reimbursement negotiation power to insurers. Should hospitals take a similar approach with medical laboratory specialists, it could create similar concerns.
While surprise medical bills create added hardship for
patients and pose reputational and reimbursement concerns for clinical laboratories
and healthcare providers, creating regulations that establish effective
protections while also protecting the financials of service providers continues
to prove difficult.
Speaking with Modern Healthcare, Dan Sacco, Vice President for Strategic Affairs and Payer Relations at Boca Raton Regional Hospital, summarized concerns concisely, saying, “We’re trying to protect [consumers], but we’re also trying to be reasonable business partners as well.”
