Oct 17, 2018 | Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Sales and Marketing, Laboratory Testing
Shift from fee-for-service to value-based reimbursement is fueling increase in joint ventures and co-branded insurance products, creating opportunities for nimble clinical laboratories and anatomic pathology groups
As healthcare moves from fee-for-service to value-based reimbursement, health insurers and providers are joining forces at a steadily increasing rate, with nearly three-quarters of partnered products in early 2018 being joint ventures or fully co-branded insurance products. This trend presents an opportunity for clinical laboratories to help providers become more effective in their use of laboratory tests as they aim for better patient outcomes and lower treatment costs.
While health systems integrating with insurance services is not new, the roll out of the Affordable Care Act (ACA) in 2014 and its emphasis on value-based reimbursement helped create renewed interest in vertical integration, notes Becker’s Hospital Review.
According to consulting firm Oliver Wyman, the number of payer-provider partnerships has grown rapidly over the past six years, with 73% of the 22 insurance products launched in the first quarter of 2018 being joint ventures of co-branded offerings.
In comparison:
- 22% of partnerships were joint ventures or co-branded in 2014:
- 33% in 2015;
- 57% in 2016; and,
- 71% last year.
Of the 22 new payer-provider partnerships announced this year, 20 product announcements explicitly emphasized value-based compensation, while compensation was implied but not mentioned in the final two product-based partnerships.
“Payers and providers continue to be interested in forming product-based partnerships,” Oliver Wyman stated when releasing the new data. “Our analysis … continues to show a steady increase of trend toward deeper partnership, with more co-branding, greater levels of value-based financial alignment, and other forms of closer collaboration and joint ventures.”
Oliver Wyman cited several “notable” new entrants:
In addition, Oliver Wyman noted that national payers Aetna and Cigna added to their growing rosters of joint ventures in 2018.
Speaking with Healthcare Dive, Tom Robinson, Partner, Health and Life Sciences at Oliver Wyman, described this year’s new ventures as varying in type, size, location, and model. He noted that 50/50 joint ventures with co-branding have gained in popularity, however, accountable care organizations (ACOs), pay-for-performance, and bundled-payment models also are being formed. Robinson believes these vertical integrations offer opportunities for innovation.
“The point of these partnerships is to create something new, rather than just building the same old offerings with a narrow network,” Robinson said. “Successful partnerships will take the opportunity to innovate around the product and experience now that the incentives, insight, investment and integration are all for it.”
In the video above, Oliver Wyman Health and Life Sciences Partner Tom Robinson discusses the emerging trend of payer-provider partnerships, and he highlights unique challenges and opportunities of these joint ventures. Click here to watch the video. (Photo and caption copyright: Oliver Wyman.)
Lower Costs, Improved Access, Through Payer-Provider Partnerships
In announcing Blue Cross Blue Shield of Rhode Island (BCBSRI), and Lifespan’s launch of coordinated healthcare plan BlueCHiP Direct Advance, BCBSRI President and Chief Executive Kim Keck pointed to the plan’s ability to drive down healthcare costs.
“We hear a consistent theme from our members—they want more affordable health plan options—and through our collaboration with Lifespan we are doing that,” Keck stated in a news release. “BlueCHiP Direct Advance is an innovative product that features Lifespan’s vast network of providers who are positioned to more effectively manage and coordinate a patient’s care. And, our partnership allows us to offer this new product at a cost that is 10% lower than our comparable plans.”
When Allina Health System of Minnesota and Aetna last year announced their partnership plans, Allina Chief Executive Penny Wheeler, MD, praised the ability of “payer-provider” partnerships to improve care coordination and increase access to preventive care.
Jim Schowalter, MPP, President and Chief of Executive of the Minnesota Council of Health Plans, told the Star Tribune the joint venture between the for-profit insurer and local health system would accelerate the shift within the state to value-based care.
“This is another effort in our state that moves us away from old fee-for-service systems,” Schowalter stated. “Working together, doctors and insurers can deliver better personal care and hold down medical expenses.”
While the future of the ACA and other healthcare reforms is uncertain, clinical laboratories and anatomic pathology groups should expect healthcare networks and insurers to continue to find ways of partnering. That means pathologists can expect to have an expanded role in helping providers improve patient outcomes and reduce healthcare spending.
—Andrea Downing Peck
Related Information:
Analysis: Payers and Providers Continue to Partner
Providers Becoming Payors: Should Hospitals Start Their Own Health Plans?
Payer-provider Partnerships on Record Pace
Blue Cross and Blue Shield of Rhode Island and Lifespan Partner to Bring Lower Cost Option to Rhode Island Residents in 2018
Security Health Plan Adds Mayo Clinic Health System to Provider Network
New Partnership Expands WellCare Members’ Access to UNC Health Alliance
Allina Health and Aetna to Launch Insurance Company in Minnesota
Nov 6, 2017 | Coding, Billing, and Collections, Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory Pathology
Medical laboratory leaders must take steps to protect their lab’s financial stability and know how to prepare and respond to investigations and regulatory threats
Clinical laboratories and anatomic pathology groups may soon face a new normal that includes more frequent and tougher audits by both private payers and the government, resulting in larger monetary demands. The financial strain medical laboratories will experience from more aggressive audits will be compounded by the roll out on January 1, 2018, of new Medicare Part B price cuts.
Attorney Richard S. Cooper, Co-chair, National Healthcare Practice Group, McDonald Hopkins, LLC, in Cleveland, says audit activity has been “ramping up” during the past 18 months, but has accelerated in recent months.
“We are seeing a dramatic increase in the number of audits and the dollar amount the payers are trying to recoup as a result of those audits,” Cooper said in an interview with Dark Daily, noting monetary demands can reach “seven to eight” figures.
“We’re seeing that with both government payers as well as commercial payers and we’re seeing much more aggressive audit tactics being utilized than we have in the past.”
Payers Put Clinical Laboratories Under Increased Scrutiny
While toxicology/pharmacogenomics and molecular/genetic testing laboratories frequently are the targets of the increased scrutiny, Cooper says no medical laboratory is immune from questioning. The “medical necessity” of providing and billing for diagnostic tests or services, and laboratory waivers of “patient responsibility” for copays and deductibles, are the two most common compliance issues being cited, states Cooper, who points to Cigna, UnitedHealthcare and Blue Cross Blue Shield as among the most active commercial payers his firm encounters.
“There are large dollars at stake and they are going after those dollars,” Cooper explains.
In this new environment, Cooper maintains medical directors and lab executives must:
- Protect the lab’s financial stability in 2018 by considering operational changes and taking other steps to prepare for revenue losses due to PAMA (Protecting Access to Medicare Act).
- Get educated about practices that can trigger audits by commercial payers, or state and federal regulators, and consider conducting self-audits using an independent third-party.
- Know how to respond if a lab is charged with proficiency test violations, which can result in significant penalties from Centers for Medicaid and Medicare Services (CMS), such as loss of a lab’s CLIA license and revocation of the medical director’s license to operate a medical laboratory for two years.
- Expect scrutiny of “piggyback” arrangements with toxicology labs that could raise compliance concerns and violate commercial payer contracts. A “piggyback” arrangement is where a lab bills under the payer contract of another provider because it is unable to contract with the payer directly. This often involves “piggybacking” on lab or hospital (usually Critical Access Hospital) contracts. In many cases, the billing entity does not perform the lab services for which they are billing. The services are instead performed by the non-participating lab, and the billing provider pays most of the collections back to the non-billing laboratory, retaining a fee for using the contracts. There may not be disclosure to the payers about which entity actually performed the test.
Navigating Tougher Clinical Laboratory Laws and Regulations
To help medical laboratory and pathology group leaders prepare for the perils they face, and take proactive steps to navigate the tough lab regulations and legal issues that lay ahead, click here to register for Dark Daily’s upcoming webinar “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,” (or place this link into your browser: https://ddaily.wpengine.com/product/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).
Attorney Richard S. Cooper, Co-chair, National Healthcare Practice Group, McDonald Hopkins LLC, in Cleveland will be a featured speaker and moderator during a new Dark Daily webinar on the Medicare Part B price cuts, and the critical legal and compliance issues clinical laboratories and pathology groups face starting in 2018. (Photo copyright: McDonald Hopkins LLC.)
This crucial learning event takes place on Wednesday, November 8, 2017, at 1 p.m. EST.
Cooper, who will moderate the webinar, will be joined by David W. Gee, JD, a Partner at Davis Wright Tremaine LLP in Seattle, and Jeffrey J. Sherrin, JD, President and Partner, O’Connell and Aronowitz in Albany, New York.
These three attorneys are among the nation’s foremost experts in issues unique to clinical laboratories, pathology groups, hospital labs, toxicology/pharmacogenomics labs, and molecular/genetic testing labs. Following our speakers’ presentations, there will be a question and answer period, during which you can submit your own specific questions to our experts.
You can’t afford to miss this opportunity. Click here to get up to speed on the most serious regulatory, compliance, and managed care contracting issues confronting all labs today. This webinar will provide solutions to the perils facing labs now and in 2018 by helping you map a proactive and effective course of action for your clinical lab or pathology group.
—Andrea Downing Peck
Related Information:
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
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
Nation’s Most Vulnerable Clinical Laboratories Fear Financial Failure If Medicare Officials Cut Part B Lab Fees Using PAMA Market Price Data Final Rule
May 8, 2017 | Compliance, Legal, and Malpractice, Laboratory News, Laboratory Operations, Laboratory Pathology
Mergers that would have reshaped the nation’s largest insurance companies would directly affect the provider networks independent medical laboratories rely on
For pathology groups and medical laboratories, the news about two thwarted deals involving mega insurance companies might be seen as a positive development.
The proposed deals—Anthem’s $48-billion bid to buy Cigna, and a proposed $37-billion Aetna–Humana merger—would have reshaped the US health insurance industry had they not been blocked by federal judges who cited possible harm to market competition, Bloomberg reported.
For now, all four health insurance companies will continue to use their existing provider networks, which is good news for clinical laboratories. Experts had expected the bigger players in each deal—Anthem and Aetna—to possibly prune the provider networks of Cigna and Humana, respectively, which could have financially burdened thousands of healthcare organizations and independent medical laboratories. (more…)
Mar 10, 2017 | Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Pathology, Laboratory Sales and Marketing, Laboratory Testing, Management & Operations
Examples already exist of manufacturers agreeing to refund payments if their therapeutic drugs don’t benefit patients; Medical laboratories with proprietary tests may find this strategy effective at guaranteeing the clinical utility of their assays
If their medical devices, medical laboratory tests, or prescription drugs are not effective, will payers, patients, and doctors get refunds from the manufacturers of these products? Some experts predict that the increased emphasis on improved patient outcomes, and the need for healthcare enterprises to back up the clinical value of their services, could lead to money-back guarantees and reimbursements for treatment therapies.
Offering a refund for services if the patient does not benefit is a powerful and compelling way for a company to call attention to its confidence level in its products and services. (more…)
Jul 15, 2016 | Coding, Billing, and Collections, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Management & Operations
Most insurers still determine coverage on a case-by-case basis, but two major payers now have coverage policies that are helpful to clinical labs that perform WES
Whole exome sequencing (WES) is not new for clinical pathologists, but it is becoming more common in a clinical setting as more physicians learn about its uses.
This is due to two reasons. First, researchers are identifying new ways to use whole exome sequencing to improve patient care. Second, the cost of whole genome sequencing continues to fall at a steady rate, making it ever more affordable to use in clinical settings.
As recently as 2009, WES was prohibitively expensive and there was little possibility that insurers would cover the cost of the test, as it was considered experimental. Now, however, evidence is mounting that it is an effective diagnostic tool. Therefore, more payers are announcing coverage for WES for an expanding number of diagnostic purposes. (more…)
