Nov 29, 2017 | Coding, Billing, and Collections, Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Sales and Marketing, Laboratory Testing, Management & Operations
Medical laboratories today struggle to submit clean claims and be promptly and adequately reimbursed as health insurers institute burdensome requirements and audit more labs
Across the nation, clinical laboratories and anatomic pathology groups of all sizes struggle to get payment for lab test claims. Veteran lab executives say they cannot remember any time in the past when medical laboratories were challenged on the front-end with getting lab test claims paid while also dealing on the back-end with ever-tougher audits and unprecedented recoupment demands.
These issues center upon the new policies adopted by the Medicare program and private health insurers that make it more difficult for many clinical laboratories to be in-network providers, to obtain favorable coverage guidelines for their tests, and to have the documentation requested when auditors show up to inspect lab test claims. This is true whether the audit is conducted by a Medicare Recovery Audit Contractor (RAC) or a team from a private health insurer.
Source of Financial Pressure on Medical Laboratories in US
Another source of financial pressure on medical laboratories in the United States today is the ongoing increase in the number of patients who have high-deductible health plans—whether from their employer or from the Affordable Care Act’s Health Insurance Marketplace (AKA, health exchanges). The individual and family annual deductibles for these plans typically start at around $5,000 and go to $10,000 or more. Many labs are experiencing big increases in patient bad debt because they don’t have the capability to collect payment from patients when they show up in patient service centers (PSCs) to provide specimens.
Some of these developments make it timely to ask the question: Is it a trend for payers to gang up on clinical laboratories and pathology groups and make it tougher for them to be paid for the lab tests they perform? Multiple factors can be identified to support this thesis.
“Is it a coincidence that, in recent years, so many payers are initiating numerous requirements that add complexity to how labs submit claims for lab tests and how they get paid?” asked Richard Faherty of RLF Consulting LLC. Faherty was formerly Executive Vice President, Administration, with BioReference Laboratories, Inc. “I can track four distinct developments that, collectively, mean that fewer lab claims get paid, expose clinical laboratories to extremely rigorous audits with larger recoupment demands, and heighten the risk of fraud and abuse allegations due to use of contract or third-party sales and marketing representatives who represent independent medical lab companies.”
Faherty described the first of his four developments as prior-authorization requirements for molecular and genetic tests. “Health insurers are reacting to the explosion in molecular and genetic testing—both in the number of unique assays that a doctor can order and the volume of orders for these often-expensive tests—by establishing stringent prior-authorization requirements,” he noted.
More Prior-Authorization Requirements for Molecular, Genetic Tests
“At the moment, many clinical lab companies and pathology groups are attempting to understand the prior-authorization programs established by Anthem (which became effective on July 1) and UnitedHealthcare (which became effective on November 1),” explained Faherty. “Just these two prior-authorization programs now cover as many as 80 million beneficiaries. There are plenty of complaints from physicians and lab companies because the systems payers require them to use are not well-designed and quite time-consuming.
“One consequence is that many lab executives complain that they are not getting paid for genetic tests because their client physicians are unable to get the necessary prior authorization—yet the lab decides to perform the test to support good patient care even though it knows it won’t be paid.”
Richard Faherty (left), CEO, RLF Consulting LLC, and formerly with Bio-Reference Laboratories, Inc., will moderate this critical webinar. Joining him will be Rina Wolf (center), Vice President, Commercialization Strategies, Consulting and Industry Affairs, XIFIN, Inc., and Karen S. Lovitch (right), JD, Practice Leader, Health Law Practice, Mintz Levin, PC, Washington, DC. The webinar takes place Wednesday, December 6, 2017, at 2 p.m. EST; 1 p.m. CST; 12 p.m. MST; 11 a.m. PST. Click here to register. (Photo copyright: Dark Intelligence Group.)
Payers Checking on How Clinical Laboratories Bill, Collect from Patients
Faherty’s second trend involves how medical lab companies are billing and collecting the amounts due from patients. “Most payers now pay close attention to how clinical laboratories bill patients for co-pays, deductibles, and other out-of-pocket amounts that are required by the patients’ health plans,” he commented. “Labs struggle with this for two reasons.
“One reason is the fact that tens of millions of Americans currently have high-deductible health insurance plans,” said Faherty. “In these cases, medical laboratories often must collect 100% of the cost of lab testing directly from the patients. The second reason is the failure of many independent lab companies to properly and diligently balance-bill their patients. This puts these labs at risk of multiple fraud and abuse issues.”
Many Medical Lab Companies Undergoing More Rigorous Audits by Payers
Faherty considers trend number three to be payers’ expanding use of rigorous audits of lab test claims. “In the past, it was relatively uncommon for a clinical lab company or pathology group to undergo audits of their lab test claims,” he observed. “That has changed in a dramatic way. Today, the Medicare program has increased the number of private auditors that visit labs to inspect lab test claims. At the same time, private health insurers are ramping up the number and intensity of the audits they conduct of lab test claims and substantially increasing their demands for recoupment without audit.
“One consequence of these audits is that medical laboratories are being hit with substantial claims for recoupment,” noted Faherty. “I am aware of multiple genetic testing companies that have been hit with a Medicare recoupment amount equal to two or three years of the lab’s annual revenue. Some have filed bankruptcy because the appeals process can take three to four years.”
Are Contract Lab Sales Reps More Likely to Offer Physicians Inducements?
Faherty’s fourth significant trend involves the greater use of independent contractors that handle lab test sales and marketing for clinical lab companies. “This trend affects both labs that use third-party lab sales reps and labs that don’t,” he said. “Labs that use contract sales and marketing representatives do not have direct control over the sales practices of these contractors. There is ample evidence that some independent lab sales contractors are willing to pay inducements to physicians in exchange for their lab test referrals.
“This is a problem in two dimensions,” noted Faherty. “On one hand, clinical lab companies that use third-party sales contractors don’t have full control over the marketing practices of these sales representatives. Yet, if federal and state prosecutors can show violations of anti-kickback and self-referral laws, then the lab company is equally liable. In certain cases, government attorneys have even gone after executives on a personal basis.
“On the other hand, I am hearing lab executives complain now that a substantial number of office-based physicians are so used to various forms of inducement offered by third-party sales representatives that the lab’s in-house sales force cannot convince those physicians to use their lab company without a comparable inducement. If true, this is a fundamental shift in the competitive market for lab testing services and it puts labs unwilling to pay similar inducements to physicians at a disadvantage.”
These four trends describe the challenges faced by every clinical laboratory, hospital laboratory outreach program, and pathology group when attempting to provide lab testing services to office-based physicians in a fully-compliant manner and be paid adequately and on time by health insurers.
Why Some Labs Continue to Be Successful and What They Can Teach You
These four trends may also explain why many medical lab companies are dealing with falling revenue and encountering financial difficulty. However, there continue to be independent lab companies that have consistent success with their coding, billing, and collections effort. These labs put extra effort into aligning their business practices with the requirements of the Medicare program and private health insurers.
To help pathologists and managers running clinical laboratory companies, hospital lab outreach programs, and pathology groups improve collected revenue from lab test claims and to improve lab compliance, Pathology Webinars, LLC, is presenting a timely webinar, titled, “How to Prepare Your Lab for 2018: Essential Insights into New Payer Challenges with Lab Audits, Patient Billing, Out-of-Network Claims, and Heightened Scrutiny of Lab Sales Practices.” It takes place on Wednesday, December 6, 2017 at 2:00 PM EDT.
Three esteemed experts in the field will provide you with the inside scoop on the best responses and actions your clinical lab and pathology group can take to address these major changes and unwelcome developments. Presenting will be:
· Rina Wolf, Vice President, Commercialization Strategies, Consulting and Industry Affairs, XIFIN, Inc. in San Diego; and,
· Karen S. Lovitch, JD, Practice Leader, Health Law Practice, Mintz Levin, PC, in Washington, DC;
· Moderating will be Richard Faherty of RLF Consulting LLC, and formerly with Bio-Reference Laboratories, Inc.
Special Webinar with Insights on How Your Lab Can Collect the Money It’s Due
To register for the webinar and see details about the topics to be discussed, use this link (or copy and paste this URL into your browser: http://pathologywebinars.com/how-to-prepare-your-lab-for-2018-essential-insights-into-new-payer-challenges-with-lab-audits-patient-billing-out-of-network-claims-and-heightened-scrutiny-of-lab-sales-practices/).
This is an essential webinar for any pathologist or lab manager wanting to improve collected revenue from lab test claims and to improve lab compliance. During the webinar, any single idea or action your lab can take away could result in increasing collected revenue by tens of thousands even hundreds of thousands of dollars. That makes this webinar the smartest investment you can make for your lab’s legal and billing/collection teams.
—Michael McBride
Related Information:
How to Prepare Your Lab for 2018: Essential Insights into New Payer Challenges with Lab Audits, Patient Billing, Out-of-Network Claims, and Heightened Scrutiny of Lab Sales Practices
Risk, Compliance, Pay—A Juggling Act for Labs
Continued ‘Aggressive Audit Tactics’ by Private Payers and Government Regulators Following 2018 Medicare Part B Price Cuts Will Strain Profitability of Clinical Laboratories, Pathology Groups
Threats to Profitability Causing Clinical Laboratories, Pathology Groups to Take on Added Risk by Entering into ‘Problematic’ Business Relationships and Risky Pricing Plans
Payers Hit Medical Laboratories with More and Tougher Audits: Why Even Highly-Compliant Clinical Labs and Pathology Groups Are at Risk of Unexpected Recoupment Demands
‘Death by 1,000 Knives’ Could Be in Store for Clinical Laboratories, Pathology Groups Not Prepared to Comply with New Medicare Part B Regulations
Nov 13, 2017 | Laboratory Management and Operations, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Management & Operations
Many aspects of traditional clinical laboratory pathology testing remain rooted to cancer care even as the cancer care industry embraces precision medicine, and digital pathology testing and interpretation
There’s good news for anatomic pathologists worried about the future of the pathology profession. A recent survey of oncology program participants in the United States determined that Precision Medicine—and the need for precision diagnostics—will be one of the top trends that significantly reshape how cancers are diagnosed and treated in the US.
Some of these five trends indirectly impact clinical laboratories and pathology groups by directly affecting the healthcare practices of hospitals and private practice doctors who order medical laboratory tests for their cancer patients.
Lindsey Conway, Managing Director, Research and Insights Division, for The Advisory Board, covered five of the top trends she says will “shape the business of cancer care in 2017,” which MedCityNews reported. They include:
1. Precision Medicine
2. Healthcare Consumerism
3. Telehealth Services
4. Care Navigation
5. Payment Reform
One of the trends involves increased use of specialized diagnostic tests that identify genetic mutations to help ensure cancer drugs and therapies are precisely targeted to a patient’s specific needs. This is a critical element of precision medicine.
Here are brief run-downs on each of the five trends:
Precision Medicine in Clinical Laboratory Cancer Care
The Association of Community Cancer Centers (ACCC) in partnership with Advisory Board’s Oncology Roundtable (AB) conducted the survey, which was funded by Pfizer Oncology, according to an ACCC press release.
The survey found precision medicine to be among the top trends impacting the cancer care business in 2017. This will be of particular interest to pathologists and clinical laboratory leaders who provide services to oncologists and cancer patients.
ACCC’s press release states: “By taking the pulse on issues such as program mergers and acquisitions, clinical pathways usage, and precision medicine and immunotherapy, ACCC can continue to provide needed resources to its members.”
The Advisory Board is a respected “think tank” that uses research, technology, and consulting to aid healthcare organizations. And, the ACCC is an advocacy and education organization for cancer care professionals.
“We are all betting big on the promise of precision medicine,” declared Conway, in the MedCityNews story. She noted, however, specific challenges related to precision medicine. They include:
· Understanding developments;
· Financing equipment purchases; and,
· Educating others.
Dark Daily noted similar concerns with precision medicine in an e-briefing on research conducted at the University of Washington School of Medicine in Seattle, where two commercially available next-generation sequencing tests had widely different results for the same cancer patients studied. (See Dark Daily, “University of Washington School of Medicine Study Finds Two Different Next-Generation Genetic Tests Can Produce Widely Different Results in the Same Patient,” May 1, 2017.)
Patient Consumerism in Cancer Care
Drawing on the AB/ACCC findings, MedCityNews noted that about 69% of cancer care consumers who use the Internet in healthcare decision-making are likely to change providers who receive negative online reviews.
These findings are not lost on cancer center administrators and medical directors who, according to an Advisory Board news release announcing the results of a survey of 250 cancer program leaders, have “increased interest in cancer patient consumerism—mainly around how to identify patient priorities and market cancer program services directly to patients.”
Telehealth Takes Cancer Care Virtual
Telehealth (AKA, Telemedicine) involves telecommunications and information technologies (IT), such as video, audio, and Internet-based software, to bring healthcare services to resource strapped remote and rural environments. One example of telemedicine that is focused on cancer care is the Breast Cancer Ally mobile app. Developed by Michael Sabel, MD, FACS, Associate Professor of Surgery and Chief of Surgical Oncology at the University of Michigan Medical School (U-M), Breast Cancer Ally is “an information and symptom management tool specially designed [to help] patients through every stage of breast cancer treatment.” The app is available for use by U-M Comprehensive Cancer Care Center patients.
“This is disease-specific technology that helps patients navigate the multiple facets of medical care by delivering information and tools based on the appropriate stage of treatment,” U-M noted in a statement.
Navigating the Care Continuum
Driven by a need to guide more cancer patients throughout their treatment, the University of Alabama at Birmingham (UAB) is taking its navigation program to a national level, according to a UAB statement.
UAB’s partner in the Patient Care Connect Program (PCCP) is Guideway Care, a resource for personal guidance in cancer treatment and recovery. Guideway Care offers communication protocols and technology for assisting people following a cancer diagnosis.
According to UAB results, compared to non-navigated cancer patients the PCCP participants experienced:
· 55% less hospitalizations;
· 29% fewer emergency room visits;
· 60% less intensive care unit admissions; and,
· 45% reduction in Medicare costs.
“The PCCP is a model of navigation that supports patients throughout the cancer care continuum and may be a mechanism to extend palliative and support care more fully into the community,” wrote UAB-affiliated authors in a JAMA Oncology article.
“Overall, cost reductions were driven by substantial declines in hospitalizations and clinic-based services,” they concluded.
Ramona Colvin (standing) and Myeisha Hutchinson, patient navigators with UAB’s Patient Care Connect program, work together to help patients through their cancer journey. (Photo and caption copyright: UAB News.)
Healthcare Reimbursement and Reform
Insurance company programs intended to lower cancer care costs that operate concurrent with congressional lawmakers’ healthcare reform efforts are receiving increased scrutiny.
One relevant example of a payer plan aimed at increasing value is Anthem’s Cancer Care Quality Program. It enables participating oncologists to compare cancer care pathways and become eligible for additional $350 a month in reimbursements for each patient being treated.
“Private payers have been on the forefront of designing value-driven ways to pay for cancer care, but we’re not going to arrive at a satisfying payment solution any time soon,” stated Conway in the MedCityNews article.
Trends Can Guide Medical Laboratory Leaders
The findings of the AB/ACCC study affirm the important role that pathologists will have as precision medicine transforms cancer care. After all, it is pathologists who diagnose the primary cancer, and it is pathologists who conduct specialized testing to identify genetic mutations that would make a patient’s cancer vulnerable to a specific drug or therapy. Pathologists also have a role in monitoring the cancer patient’s treatment.
Thus, it is important for clinical laboratory leaders to acknowledge what their cancer care colleagues perceive as trends and topics of interest. Pathologists and medical laboratory leaders who provide services to oncologists and cancer patients should note these trends and related programs and research. Healthcare navigation and telemedicine applications, for example, could be ways for pathologists to collaborate with oncologists in outreach to cancer patients.
—Donna Marie Pocius
Related Information:
Five Healthcare Trends Impacting Cancer Care
ACCC Collaborates with Advisory Board to Conduct Eight Annual Trends in Cancer Care Survey
UAB Expands Cancer Navigation Program Nationally with Guideway Care
Resource Use and Medicare Costs During Lay Navigation for Geriatric Patients with Cancer
U-M Breast Cancer Ally Providing Patients with Effective Disease Management
Advisory Board Research for 2018
University of Washington School of Medicine Study Finds Two Different Next-Generation Genetic Tests Can Produce Widely Different Results in the Same Patient
Sep 1, 2017 | Laboratory Management and Operations, Laboratory News, Laboratory Pathology, Laboratory Testing, Managed Care Contracts & Payer Reimbursement
Price transparency trend is altering decision-making in many aspects of healthcare and providing lesson for medical laboratory executives
Medical laboratory executives are well aware that price transparency is an increasingly powerful trend in healthcare. Now, as consumers increasingly opt for lower-cost options when making healthcare decisions, the 2010 Affordable Care Act (ACA) provides a notable example of this new reality, with consumers making cost, not choice, their top concern when selecting health plans through the federal health insurance marketplace exchanges.
A recent New York Times article reported that millions of people purchasing insurance in ACA marketplaces are motivated by how little they can pay in premiums, not the size of the physician and hospital networks, or an insurer’s reputation.
This economic reality may help explain why cost containment is a focus of healthcare reform bills currently under discussion in Congress. Whether you agree or disagree with the American Health Care Act (HR1628), the Republican Party’s plan to repeal and replace the ACA, it should be viewed in this broader context: Healthcare consumers are avoiding higher-priced healthcare plans in droves, and millions of younger Americans are finding the cost of coverage a barrier to entry. This is the challenge facing politicians of both parties, whether they will admit it publicly or not.
Obamacare Enrollee Numbers Dropping
A 2015 report by the Office of the Assistant Secretary for Planning and Evaluation in the Department of Health and Human Services, found that “the premium is the most important factor in consumers’ decision-making when shopping for insurance.” In 2014, 64% of people shopping in the marketplaces choose the lowest cost or second lowest cost plan in their metal tier, while 48% did so in 2015.
Perhaps more significantly, millions of people fewer than expected have enrolled in Obamacare. A CNN Money report noted that 10.3-million people enrolled in an ACA marketplace as of mid-March 2017, down from the 12.2-million who signed up for coverage when enrollment ended on January 31.
Mark T. Bertolini (left), Chief Executive of Aetna, and Joseph R. Swedish (right), Anthem’s Chief Executive, testified before a House committee hearing last fall. Major insurers are struggling to find a business model that works in the marketplaces created by the federal healthcare law. (Caption and photo copyright: New York Times/Jacquelyn Martin/Associated Press.)
Those numbers fall short of recent federal government projections for Obamacare and are dramatically less than original estimates. A 2015 report from Congressional Budget Office (CBO) projected marketplace enrollment would increase to 15-million in 2017, before rising to between 18-million and 19-million people a year from 2018 to 2026.
Shortly after Congress passed the ACA, the CBO projected that by 2016, 32-million people would gain healthcare coverage overall.
As a New York Times article pointed out, not only are young and healthy people selecting the cheapest ACA marketplace plans, but also many are opting to risk tax penalties and go without healthcare coverage.
“The unexpected laser focus on price has contributed to hundreds of millions of dollars in losses among the country’s top insurers, as fewer healthy people than expected have signed up,” the New York Times article noted.
ACA Marketplace Unsustainable, Says Anthem Chief Executive
Healthy younger people were expected to join the ranks of the insured and provide an essential counter balance that would offset insurers’ cost of care for newly insured unhealthy people. That prediction also has failed to materialize, forcing major insurance companies to re-evaluate their role in the marketplace or to exit Obamacare completely.
“The marketplace has been and continues to be unsustainable,” stated Joseph R. Swedish, Chairman, President and Chief Executive of Anthem, a Blue Cross and Blue Shield company, in the New York Times article.
In a CNN Money article, Anthem announced it would not participate in Ohio’s Obamacare exchange in 2018 and added that it was evaluating its participation in all 14 states where it currently offers plans.
“A stable insurance market is dependent on products that create value for consumers through the broad spreading of risk and a known set of conditions upon which rates can be developed,” Anthem stated in a press statement. “Today, planning and pricing for ACA-compliant health plans has become increasingly difficult due to the shrinking individual market as well as continual changes in federal operations, rules, and guidance.”
Inaccurate CBO Predictions Impact Clinical Laboratories and Pathology Groups
Anthem is not the only large insurer losing money selling insurance in the marketplaces. Humana and Aetna also this year scaled back their involvement with Obamacare, with Aetna citing $430-million in losses selling insurance to individuals since January 2014.
“Providing affordable, high-quality healthcare options to consumers is not possible without a balanced risk pool,” Aetna Chairman and CEO Mark T. Bertolini declared in an Aetna statement.
How this plays out may matter a great deal to the nation’s clinical laboratories and anatomic pathology practices. As noted above, in 2010, at the time that the Affordable Care Act was passed, the Congressional Budget Office estimated that as many as 32-million additional people would have health insurance in 2016 because of the ACA. The reality is much different. Less than a third of that number have health insurance policies because of the Affordable Care Act.
Pathologists and medical laboratory managers may want to consider how wrong that 2010 CBO estimate of coverage was. If the CBO’s estimate could be off by 66% in 2016, how reliable are CBO estimates when the federal agency scores the various “repeal and replace” bills that Republicans have proposed during the current Congress?
—Andrea Downing Peck
Related Information:
Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2016 to 2026
Cost, Not Choice, Is Top Concern of Health Insurance Customers
Health Plan Choice and Premiums in the 2016 Health Insurance Marketplace
CBO’s Analysis of the Major Health Care Legislation Enacted in March 2010
Obamacare Enrollment Slides to 10.3 Million
Anthem Statement on Individual Market Participation in Ohio
Aetna to Narrow Individual Public Exchange Participation
Jul 14, 2017 | Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory Pathology, Laboratory Testing
Experts concerned people will be unable to judge a true emergency from a minor health concern; patients could be left with a big ER bill if they are wrong
Here’s a groundbreaking way payers are keeping healthcare costs down: Anthem Blue Cross and Blue Shield (BCBS) of Georgia sent letters to its members in May informing them that they will no longer be reimbursed by the insurer for “non-emergency” related services obtained in emergency rooms (ERs).
Pathology groups and medical laboratory leaders, will want to monitor and potentially respond to this important emergency coverage development. Hospital-based medical laboratories receive high volumes of test orders from the ER. Any decline in ER visits from a payer policy like this will have staffing and budget implications for hospital labs.
Medical Groups Warn of Dire Consequences
The new policy garnered national media coverage in addition to local exposure in Georgia, where it went into effect on July 1. BCBS affiliates in New York, Missouri, and Kentucky are considering similar policies as well, noted an article in The Fiscal Times.
“Anthem believes that primary care doctors are in the best position to have a comprehensive view of their patient’s health status and should be the first medical professionals patients see with any non-emergency medical concerns,” Anthem stated in the Fiscal Times article.
In its letter, BCBS of Georgia defines an emergency as a “medical or behavioral health condition of recent onset” that a “prudent layperson” deems health-threatening. However, many symptoms, such as chest pain, can lead to sudden death. How is the average person to know if what they are experiencing will turn out to be angina, a painful but often non-fatal condition, and not a life-threatening embolism?
“The prudent layperson standard requires that insurance coverage is based on a patient’s symptoms, not their final diagnosis,” the American College of Emergency Physicians (ACEP) in Georgia explained in its own statement.
“Anyone who seeks emergency care suffering from symptoms that appear to be an emergency, such as chest pain, should not be denied coverage if the final diagnosis does not turn out to be an emergency,” the ACEP concluded.
Are Patients Able to Judge Where They Should Go?
Some experts warn that many people might be unable to judge the true nature of their conditions when under stress.
The ACEP and its Missouri Chapter said in a statement that Anthem BCBS lists almost 2,000 diagnoses it considers to be “non-urgent” and not covered in the ER. The professional organization contends, however, that some of the diagnoses on the insurer’s list have the propensity to be medical emergency symptoms as well.
Two examples ACEP noted are:
However, cold symptoms, sore throat, physical exams, and minor injuries are among the complaints best addressed by walk-in clinics or urgent care centers, BCBS explained in a blog article.
Nevertheless, Debbie Diamond, Public Relations Director for BCBS of Georgia, told The Fiscal Times that a person who mistakes indigestion for chest pain is likely to be covered for ER care (in keeping with prudent layperson guidance).
Distinguishing Between Necessary and Unnecessary ER Visits
It’s not always simple to recognize an emergency from a non-emergency. Even emergency medicine professionals often have difficulty doing so.
In a Los Angeles Times article, Renee Hsia, MD, Professor and Director of Health Policy Studies, Department of Emergency Medicine at the University of California San Francisco School of Medicine, noted that, “People don’t come with a sticker on their forehead saying what the diagnosis is. We as physicians can’t always distinguish necessary from unnecessary visits.”
Renee Hsia, MD (above), is Professor and Director of Health Policy Studies, Department of Emergency Medicine at the University of California School of Medicine, San Francisco (UCSF). She told the Los Angeles Times that the Blue Cross Blue Shield of Georgia emergency coverage policy is a “well-intentioned policy with dangerous consequences.” (Photo copyright: Angie’s List/Adm Golub.)
According to the Centers for Disease Control and Prevention, there are 130.4 million emergency department visits each year in the US. A study published in the Journal of the American Medical Association (JAMA) Journal of Internal Medicine found that six of the 10 top symptoms that send people to non-emergency care settings match those driving decisions to head to emergency departments as well. They include:
- Back symptoms;
- Abdominal pain;
- Sore throat;
- Headache;
- Chest pain; and
- Low back pain.
“Our findings indicate that either patients or healthcare professionals do entertain a degree of uncertainty that requires further evaluation before diagnosis,” the authors wrote in JAMA.
Where Next? Who’s Next?
Despite the discord over the reduction in non-emergency coverage, more BCBS affiliates may soon adopt the same policy. And what of other large insurers? Might they be watching and considering whether to alter their emergency coverage, as well, to save money?
Thus, clinical laboratories in Georgia hospitals will want to closely monitor their institution’s ER test volume. It could take a while for Blue Cross patients in Georgia to realize that some ER visits (and the clinical laboratory tests associated with them) might not be covered by their insurance. This will happen in instances where their insurer denies claims for services that, in Anthem’s opinion, were better suited for primary care doctors and urgent care centers rather than ERs.
—Donna Marie Pocius
Related Information:
Got Chess Pain? This Insurer May Not Cover Your Emergency Room Visit
Blue Cross in Georgia to Limit Emergency Room Coverage
Choosing Between ER and Urgent Care
Blue Cross Blue Shield of Georgia Launch Emergency Room Policy
Emergency Physicians: Anthem Blue Cross Blue Shield Policy Violates Federal Law
Emergency Physicians: Georgia Blue Cross Blue Shield Policy Violates Federal Law
A Big Health Insurer is Planning to Punish Patients for Unnecessary ER Visits
Urgent Care Needs Among Non-Urgent Visits to the Emergency Department
Jun 2, 2017 | Coding, Billing, and Collections, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Management & Operations
Aetna expects 75% to 80% of its medical spending will be value-based by 2020
Many pathologists and medical laboratory executives may be surprised to learn how quickly private health insurers are moving away from fee-for-service payment arrangements. According to Forbes, the nation’s largest health insurance companies now associate nearly 50% of reimbursements they make to value-based insurance initiatives.
This is a sign that value-based managed care contracting continues to gain momentum. And that interest remains strong in this form of reimbursement, which associates payment-for-care to quality and rewards efficient providers.
UnitedHealth Group (NYSE:UNH) and Aetna (NYSE:AET) are the fastest adopters of value-based payment models, with Anthem (NYSE:ANTM) close behind, the Forbes article noted.
Moreover, UnitedHealth and Aetna intend to increase their percentage of value-based contracts. For example, Aetna, which now ties 45% of its reimbursements to value, says its goal is to have 75% to 80% of its medical spending in value-based relationships by 2020, Healthcare Finance News pointed out.
These compelling data should motivate pathology groups and medical laboratory leaders to adopt strategies for value-based contracting. That’s because payment schemes based on clinical laboratory performance will likely grow quickly, as compared to traditional fee-for-service reimbursement models, which are being phased out.
Aetna: Lowering Acute Admits
Aetna and other insurance companies are rewarding in-network hospitals, medical laboratories, and physicians who help them keep their customers healthy.
“One way we measure our success is by how well we are able to keep our members out of the hospital and in their homes and communities,” stated Mark Bertolini, Aetna’s Chairman and Chief Executive Officer, in the Healthcare Finance News article.
“I think value-based contracting is going to continue to be encouraged by even the current [federal] administration as a way of getting a handle on healthcare costs,” he continued. In fact, Aetna lowered acute admissions by 4% in 2016 and reduced readmission rates by 27%, reported Healthcare Finance News.
UnitedHealth: Outpatient Care a Focal Point
Meanwhile, UnitedHealth Group spends $52 billion (or about 45%) of a $115 billion annual budget on value-based initiatives, Forbes noted.
In March, UnitedHealth Group joined Optum, its health services company, to Surgical Care Associates, an ambulatory (outpatient) surgery provider with 205 sites nationwide.
As surgical cases (such as total joint replacements) continue their migration to ambulatory surgery center sites, UnitedHealth Group expects this merger to offer value to patients, payers, and physicians, a statement pointed out.
“We’ve been able to drive down on a per capita basis inpatient, and inside that we’ve focused a lot in those early years around the conversion of inpatient to outpatient. And I think this is sort of the continued evolution as we focus more on the side of service to how do we get that outpatient into the ambulatory setting,” said Dan Schumacher, UnitedHealthcare Chief Financial Officer, in the Healthcare Finance News story.
The graphic above is from a slide presentation given by Eleanor Herriman, MD, MBA, Chief Medical Informatics Officer with Viewics, a provider of big-data management solutions for hospitals and clinical laboratories. Because of healthcare’s drive toward value-based payment models, clinical labs must focus on “operational efficiencies” and “testing utilization management,” and be prepared to “demonstrate value of testing to payers and health organizations,” Herriman’s presentation notes. (Image copyright: Viewics, Inc.)
Also, in 2016, OptumRx (pharmacy benefit management) announced partnerships with Walgreens and CVS Pharmacy. The joint pharmacy care agreements are intended to improve patient outcomes, connect platforms for health data leverage, and address costs of care, UnitedHealth Group stated in dual press releases (Walgreens and CVS) announcing the strategic partnerships.
Anthem: Planning for 50% Value-Based Care by Next Year
For its part, Anthem now has 43% of its operating budget focused on shared savings programs. Furthermore, the company reportedly has a plan to associate at least 50% of its budget with value-based care by 2018.
“When you combine this with our pay for performance programs, we will have well over half our spend in collaborative arrangements over the next five years,” Jill Becher, Anthem Staff Vice President of Communications, told Forbes.
Clinical Laboratories Need Value-Based Strategy
The rise of value-based care should motivate clinical laboratory leaders to create and implement novel and responsive strategies as soon as possible. Without a focus on value, labs could be denied entry into provider networks.
In a Clinical Laboratory Daily News article, Danielle Freedman, MD, noted that value-based clinical laboratory strategies could entail the following:
- Working with physicians on appropriate retesting intervals;
- Adding clinical decision support tools; and
- Vetting testing requests.
Freedman is Director of Pathology at Luton and Dunstable University Hospital NHS Foundation Trust in the United Kingdom (UK).
Clinical laboratory executives and pathology practice administrators should take note of the fact that some large healthcare insurers already have nearly half of their reimbursement under value-based contracts, with plans to grow their investment in value-based relationships in the future.
Already facing the challenges of narrowing healthcare networks, it is imperative that lab leaders also get their lab team to focus on value (and not just volume). It can be expected that, as health insurers look to partner with labs in different regions and communities, they will want medical laboratories that are creative in developing high-value diagnostic testing services.
—Donna Marie Pocius
Related Information:
United Health, Aetna, Anthem Near 50% of Value-Based Care Spending
Aetna, UnitedHealth Show Increasing Appetite for Value-Based Care Contracts
Aetna Premier Care Network Plus Helps Reduce Costs for National Employers and Members Through Simple Access to Value-Based Care
Surgical Care Associates/OptumCare to Combine
OptumRx and Walgreens to Expand Consumer Choice, Reduce Costs, and Improve Health Outcomes
OptumRx and CVS Pharmacy to Expand Consumer Choice, Reduce Costs, and Improve Health Outcomes
“V” is for Value, Not Volume
Advanced Laboratory Analytics—A Disruptive Solution for Health Systems
