Jun 18, 2014 | Coding, Billing, and Collections, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Management & Operations
In Massachusetts, a 1,000-physician group gets 70% of revenue from capitated payments, motivating the physicians to reduce unnecessary utilization of medical laboratory tests
Accumulating market evidence indicates that unnecessary utilization of medical laboratory tests—a problem bemoaned by pathologists for decades—may finally be addressed by an unlikely source: ordering physicians! Such a trend would have both positive and negative consequences for clinical laboratories throughout the United States.
What motivates physicians, on their own initiative, to reduce the unnecessary utilization of medical laboratory tests are changes in how they are paid. Many private health plans are reimbursing office-based physicians using global payment arrangements, such as capitation. (more…)
Jul 3, 2013 | Coding, Billing, and Collections, Compliance, Legal, and Malpractice, Digital Pathology, Laboratory Hiring & Human Resources, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Managed Care Contracts & Payer Reimbursement, Management & Operations, Uncategorized
Research study shows opportunity for clinical laboratories to help client physicians get more value from their electronic health record systems
For the majority of physicians in the United States, implementation of an electronic health record (EHRs) system in their practice may turn out to be a money-losing proposition. That is one prediction made by researchers at the University of Michigan (UM), based on a study they conducted.
Among other things, these findings indicate that progressive clinical laboratories and pathology groups have the opportunity to leverage the interface between their laboratory information system (LIS) and the client physician’s EHR to deliver added value. That’s because pathologists, Ph.D.s, and laboratory scientists know many ways that physicians can improve how they order medical laboratory tests and act upon the results of those tests.
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Jul 9, 2012 | Instruments & Equipment, Laboratory Instruments & Laboratory Equipment, Laboratory News, Laboratory Pathology, News From Dark Daily
Pre-authorization for therapeutic drugs is one step on the path to payers requiring similar pre-authorization for expensive clinical laboratory tests
It’s a step on the road to pre-authorization for both certain therapeutic drugs and expensive genetic tests. Blue Cross Blue Shield of Massachusetts (BCBSMA) recently announced that it would work to curb drug abuse through a new pre-authorization program for certain prescription drugs.
Clinical laboratory managers and pathologists should take this as a sign that managed care plans are increasingly willing to tackle issues associated with unnecessary utilization by implementing pre-authorization requirements, among other strategies.
At the top of the pre-authorization list for BCBMSA will be such drugs as Oxcycontin, Percocet, and Vicodin. In recent years, the medical laboratory industry has watched the increase of pain management testing by physicians who treat patients taking these types of addictive drugs. (more…)
Feb 1, 2012 | Coding, Billing, and Collections, Compliance, Legal, and Malpractice, Laboratory News, Laboratory Operations, Laboratory Pathology
Early evidence is that the AQC arrangement encourages providers to more carefully utilize ancillary services, including clinical laboratory and pathology testing
Much attention is being given to the new healthcare payment models being introduced by the Medicare program during 2012. However, quietly—and with much less publicity—private health plans are deploying innovative, value-based payment models.
These developments need to be watched by clinical laboratory managers and pathologists, since it is predicted that the cost of medical laboratory testing will be bundled into most of the value-based reimbursement arrangements soon to enter the healthcare marketplace.
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Jan 26, 2009 | Laboratory Pathology, Management & Operations
Wall Street has yet to grasp this essential truth of laboratory medicine-lab test quality comes with its own price tag
At this moment in time, Quest Diagnostics Incorporated‘s (NYSE:DGX) advertised value proposition to other labs—”industry-leading quality and technical proficiency”—has diminished credibility with pathologists and lab industry executives. They are questioning how the nation’s largest lab company could allow systemic errors that caused it to report inaccurate Vitamin 25(OH) D test results to tens of thousands of patients for 18 months during 2007 and 2008.
These same pathologists represent an important source of reference and esoteric testing referrals to the nation’s largest lab company. Thus, the disclosure of systemic failures in its Vitamin D testing program may have implications for Quest Diagnostics over the long term. Many health systems, hospitals, and laboratories across the United States refer reference and esoteric tests to Quest Diagnostics. Quality and test result integrity are a primary buying motive for the pathologists and lab directors in these organizations. As scientists, they want confidence in the analytical integrity of the test results they provide to their own clinicians.
Two national reference laboratories with solid reputations for quality and lab test result integrity are ARUP Laboratories and Mayo Medical Laboratories. These reputations for quality and integrity are key assets at ARUP and Mayo. Both firms compete successfully against the two blood brothers because many referring laboratories believe the scientific integrity at ARUP and Mayo is not compromised in ways that may occur in publicly-traded lab companies. Of interest, both these laboratories earn adequate profit margins while competing effectively on price, service, and quality against the national lab companies.
Quest Diagnostics now finds itself facing a tough challenge in the reference/esoteric testing marketplace. Among its peers in the scientific and laboratory medicine communities, the quality and integrity of its lab test results will be seriously questioned. And because pathologists have long memories, this can be an issue for years into the future.
That has been the experience of Specialty Laboratories, Inc. During the 1990s, this was a go-go reference and esoteric testing laboratory. Fast-growing, it had a reputation for first-rank science and regularly introduced new proprietary assays to the medical community. But, in April, 2002, federal and state laboratory regulators yanked Specialty’s license to do business with Medicare. The story centered around internal whistleblowers and regulatory directives that were not fully addressed by Specialty’s executive team. There were questions about the integrity of test results for some lines of lab tests performed at Specialty. (“State, Federal Regulators Target Specialty Labs,” The Dark Report, April 22, 2002.)
Within a few months, Specialty Labs was able to reclaim its Medicare license after fixing deficiencies and passing its inspections. However, loss of its Medicare license was a body blow to Specialty Laboratories. Across the nation, pathologists and laboratory directors stopped sending specimens to Specialty Labs. Overnight, the company experienced a precipitous decline in specimen volume and revenue. Facing grim financial prospects, in January 2006 it was sold to AmeriPath. Ironically, Quest Diagnostics found itself the owner of Specialty Laboratories when it acquired AmeriPath last year.
The example of Specialty Labs illustrates why quality, integrity, and trust matter-a great deal! Pathologists and lab directors face personal liability if their laboratory delivers inaccurate results to patients and physicians. Their personal reputations ride on the performance of their laboratory. As physicians, they understand the consequences to patient care when a laboratory fails to report accurate test results. Their own laboratory must maintain its reputation for integrity and quality if it is to retain the trust of the clinicians and patients it serves.
Further, these same pathologists and lab directors regularly interview and hire scientists and medical technologists from both of the national laboratory companies. They hear lots of stories about the internal operations of these two billion-dollar lab companies. There are few secrets about events that unfold inside the two blood brothers. For example, lab scientists directing Vitamin D testing at their own labs quickly recognized, early in 2007, that Quest Diagnostics was struggling with its home brew mass spectrometry Vitamin D assay.
The lab community has watched both national labs continually cut costs over the past ten years. Competing labs conduct hiring interviews with the wave after wave of terminated employees hunting for jobs after each RIF (reduction in force) trims back staff to save money. Pathologists and lab directors understand the consequences of sustained cost cutting. Eventually, a laboratory’s cost cutting reaches a point where the resources, staff time, and operational capability required to sustain a high level of analytical accuracy and integrity can be compromised.
That is why many laboratory professionals are asking if the inaccurate Vitamin 25(OH) D results performed over an 18-month period on tens of thousands of patients is a sign that should not be ignored. Has Quest Diagnostics reached the threshold where further cost-cutting to satisfy Wall Street will undermine the quality and integrity of its lab test results?
Of all the customers of the two national laboratories, pathologists are the best informed about how constant budget reductions can undermine the quality and integrity of laboratory test results. They know that lab test quality is an expensive proposition.
Thus, no one should be surprised if, going forward, both national laboratories find it more difficult to expand the reference and esoteric business which comes to them from other laboratories across the nation. Should either firm experience even modest declines in the year-over-growth in this business segment, it will be a significant sign. Questions associated with test integrity may be motivating an important source of reference and esoteric testing to steer their specimens to other laboratory providers.
Should this happen, no one should be surprised. If a decade of sustained cost-cutting has finally reached the point where laboratory customers question the quality of the test results produced by major lab companies, it will only be the market imposing its discipline. The market will be reminding Wall Street investors that spending to sustain quality protects market share and profits. After all, as the libertarians say, “There ain’t no such thing as a free lunch (TANSTAAFL)”!
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