News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

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Clinical Laboratories and Pathology Groups

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Clinical Lab 2.0 Advances as Project Santa Fe Foundation Secures Nonprofit Status, Prepares to Share Case Studies of Medical Laboratories Getting Paid for Adding Value

Clinical laboratory leaders interested in positioning their labs to be paid for added-value services will get knowledge, insights, and more at upcoming third annual Clinical Lab 2.0 Workshop in November

It’s a critical time for medical laboratories. Healthcare is transitioning from a fee-for-service payment system to new value-based payment models, creating disruption and instability in the clinical lab test market. In addition, payers are cutting reimbursement for many lab tests.

These are among the market factors leading some pathologists and clinical lab leaders to seek new or alternative sources of revenue to keep the lights on and the machines running in their laboratories. Some might say, it’s a dark time for the lab industry.

However, in an exclusive interview with Dark Daily, Khosrow Shotorbani, President and Executive Director of the Project Santa Fe Foundation (PSFF) and founder of the Clinical 2.0 movement, said clinical laboratories should not fear the future. 

“This is not the time to be shy or timid,” he declared. “The quantitative value of medical laboratory domain is significant and will be lost if not exploited or leveraged.”

Shotorbani has reason to be positive. In recent years the Project Santa Fe Foundation (PSFF) has emerged to advocate for, and teach, the Clinical Lab 2.0 model. Clinical Lab 2.0 is an approach which focuses on longitudinal clinical laboratory data to augment population health in new payment arrangements.

Earlier this year, PSFF filed for 501(c) status, according to a news release. It is now positioned as a nonprofit organization, guided by a board of directors whose mission is “to create a disruptive value paradigm and alternative payment model that defines placement of diagnostic services in healthcare.”

Progressing Toward Clinical Lab 2.0

At the 24th Annual Executive War College on Lab and Pathology Management held in New Orleans last May, the nation’s first ever Clinical Lab 2.0 “Shark Tank” competition was won by Aspenti Health, a full-service diagnostic laboratory specializing in toxicology screening.

“This project, as well as all of the other cases that were presented, were quite strong and all were aligned with the mission of the Clinical Lab 2.0 movement,” said Shotorbani, in a news release. “This movement transforms the analytic results from a laboratory into actionable intelligence at the patient visit in partnership with front-liners and clinicians—allowing for identification of patient risks—and arming providers with insights to guide therapeutic interventions.

“Further, it reduces the administrative burden on providers by collecting SDH [social determinants of health] predictors in advance and tying them to outcomes of interest,” he continued. “By bringing SDH predictors to the office visit, it enables providers to engage in SDH without relying on their own data collection—a current care gap in many practices. The lab becomes a catalyst helping to manage the population we serve.”

Aspenti Health’s Shark Tank entry, “Integration of the Clinical Laboratory and Social Determinants of Health in the Management of Substance Use,” focused on the social factors tied to the co-use of opioids and benzodiazepines, a combination that puts patients at higher risk of drug-related overdose or death.

The project revealed that the top-two predictors of co-use were the prescribing provider practice and the patient’s age.

“They did an interesting thing—what clinical laboratories alone cannot do—the predictive value of lab test data mapped by zip code for patients admitted in partnership with social determinants of health. This helps to create delivery models to potentially help prevent opioid overdose,” said Shotorbani, who sees economic implications for chronic conditions.

“If clinical laboratories have that ability to do that in acute conditions such as opioid overdose, what is our opportunity to use lab test data in chronic conditions, such as diabetes? The cost of healthcare is in chronic conditions, and that is where clinical lab data has an essential role—to support early detection and early prevention,” he added.

“This is often described as the transition from volume to value because this trend will fundamentally change how all clinical laboratories and anatomic pathology groups are paid,” said Khosrow Shotorbani (above), MBA, MT(ASCP), Executive Director of the Project Santa Fe Foundation (PSFF), during his presentation at the 22nd annual Executive War College in New Orleans. “This shift from volume to value also will create new winners and losers in the clinical lab industry,” he declared. “Not every lab organization will take the timely action required to introduce the value-based laboratory testing services that hospitals, physicians, and payers will need. (Photo copyright: Albuquerque Business First.)

Clinical Laboratory Data is Health Business Data

One clinical laboratory working toward that opportunity is TriCore Reference Laboratories in Albuquerque, N.M. It recently launched Diagnostic Optimization with the goal of improving the health of their communities.

“TriCore turned to this business model,” Shotorbani explained. “It is actively pursuing the strategy of intervention, prevention, and cost avoidance. TriCore is in conversation with health plans on how its lab test data and other data sets can be combined and analyzed to risk-stratify a population and to identify care gaps and assist in closing gaps.

“Further, TriCore is identifying high-risk patients early before they are admitted to hospitals and ERs—the whole notion of facilitating intervention between the healthcare provider and the potential person who may get sick,” he added. “These are no longer theoretical goals. They are realizations. Now the challenge is for Project Santa Fe to help other lab organizations develop similar value-added collaborations in their communities.”

Renee Ennis, TriCore’s Chief Financial Officer, told American Healthcare Leader, “Women go in (to an ER) for some condition, and the lab finds out they are pregnant before anyone else,” she said, adding that TriCore reaches out to insurers who can offer care coordinators for prenatal services.

“There is definitely a movement within the industry in this direction [of Clinical Lab 2.0],” she added. “But others might not be moving as quickly as we are. As a leader in this transition, I think a lot of eyes are on what we are doing and how we are doing it.”

Why Don’t More Lab Leaders Move Their Labs to Clinical Lab 2.0?

So, what holds labs back from pursing Clinical Lab 2.0? Shotorbani pointed to a couple of possibilities:

  • A lab’s traditional focus on volume while not developing partnerships (such as with pharmacy colleagues) inside the organization; and
  • Limited longitudinal data due to a provider’s sale of lab outreach services or outsourcing the lab.

“The whole notion of Clinical Lab 2.0 is basically connecting the longitudinal data—the Holy Grail of lab medicine. That is the business model. Without the longitudinal view, the ability to become a Clinical Lab 2.0 is extremely limited,” added Shotorbani.

New Clinical Lab 2.0 Workshop Focuses on Critical ‘Pillars’

Project Santa Fe Foundation will host the Third Annual Clinical Lab. 2.0 Workshop in Chicago on November 3-5. New this year are sessions aligned with Clinical Lab 2.0 “pillars” of leadership, standards, and evidence. The conference will feature panels addressing:

Click here to register online for this informative workshop, or place this URL in your browser https://dark.regfox.com/clinical-lab-20-workshop-by-project-santa-fe-foundation.

—Donna Marie Pocius

Related Information:

Project Santa Fe Foundation Files for 501( c) Status, Expands Board of Directors

Aspenti Health Wins Clinical Lab 2.0 Innovation Award Demonstrating the Clinical Laboratory as a First Responder to the Opioid Crisis

Renee Ennis Wants Lab to A Have a Seat at the Table

Aspenti Health Takes Home Grand Prize in Nation’s First Clinical Lab 2.0 Shark Tank Competition Showcasing Added Value, Clinical Success Stories

Aspenti Health Takes Home Grand Prize in Nation’s First Clinical Lab 2.0 ‘Shark Tank’ Competition Showcasing Added-Value Clinical Success Stories

Vermont-based clinical laboratory company integrates social determinants of health (SDH) with lab data to help doctors at University of Vermont Health Network better manage their opioid patients

Aspenti Health, a full-service diagnostic laboratory specializing in toxicology screening, has won the nation’s first ever Clinical Lab 2.0 “Shark Tank”! The competition was held May 2, 2019, in conjunction with the 24th Annual Executive War College on Lab and Pathology Management in New Orleans.

The Clinical Lab 2.0 “Shark Tank” showcased forward-thinking clinical laboratories and anatomic pathology groups that are committed to the Clinical Lab 2.0 movement, a Project Santa Fe Foundation initiative aimed at guiding laboratories from test volume to lab value models.

“We are thrilled to be recognized for our work serving the unique needs of substance use healthcare. And, most importantly, across our organization for our unyielding commitment to employing innovations to solve this [opioid] crisis,” Aspenti Health CEO Chris Powell stated in the news release.

The projects were judged on Clinical Lab 2.0 attributes, such as:

  • Risk stratification by population;
  • Closure of care gaps;
  • Lab results as early detection; and
  • Lab intervention for improved clinical outcomes.

“This project, as well as all of the other cases that were presented, were quite strong and all were aligned with the mission of the Clinical Lab 2.0 Movement,” said Khosrow R. Shotorbani, President, Executive Director, Project Santa Fe Foundation, in a news release. “This movement transforms the analytic results from a laboratory into actionable intelligence at the patient visit in partnership with front-liners and clinicians—allowing for identification of patient risks—and arming providers with insights to guide therapeutic interventions.

“Further, it reduces the administrative burden on providers by collecting SDH [social determinants of health] predictors in advance and tying them to outcomes of interest,” continued Shotorbani. “By bringing SDH predictors to the office visit, it enables providers to engage in SDH without relying on their own data collection—a current care gap in many practices. The lab becomes a catalyst helping to manage the population we serve.”

Co-Use of Opioids Tied to Social Factors

Aspenti Health’s “Shark Tank” entry—“Integration of the Clinical Laboratory and Social Determinants of Health in the Management of Substance Use”—focused on the social factors tied to the co-use of opioids and benzodiazepines, a combination that puts patients at higher risk of drug-related overdose or death. The project revealed the top two predictors of co-use were the:

  • Prescribing provider practice, and the
  • Patient’s age.
“This was a unique project because it integrated social determinants, which are a key part of our overall health and wellness, with laboratory data, which is well-defined, quantitative, and very accurate,” said Jill Warrington, MD, PhD (above), Chief Medical Officer at Aspenti Health and Assistant Professor in the Department of Pathology and Laboratory Medicine University of Vermont Medical Center, in an exclusive interview with Dark Daily. “So, combining something that is really meaningful clinically with something that is very predictive and accurate has a nice blend of strengths.” (Photo copyright: Aspenti Health.)

Myra L. Wilkerson, MD, who served on a three-judge panel tasked with selecting the winning project, said the Vermont toxicology laboratory’s entry stood out in two key areas.

“We felt their project had an application to a broader population, but also moved beyond traditional [laboratory] functions or even medicine,” explains Wilkerson, who is Chair of the Diagnostic Medicine Institute for the Geisinger Health System. “Patient advocacy groups, payers, and providers all have come to realize you can identify a disease, you can provide a treatment, but so many other things impact it, especially in this community. When it is an addiction, there are so many other factors that play into whether or not they are going to be successful in their treatment plan. And a lot of them are social things.”

Educating Care Givers and Public on Dangers of Co-Use Drug Addictions

Working in collaboration with Staple Health and the University of Vermont Health Network, Aspenti selected “co-use” for this initial lab outcome study because of the significant patient safety implications and relative simplicity of its definition—the co-presence of positive laboratory results for both opioids and benzodiazepines.

According to the National Institute on Drug Abuse, more than 30% of overdoses involving opioids also involve benzodiazepines. Aspenti’s “Shark Tank” presentation highlighted the fact that co-use of the drugs accounts for nearly 2.5% of opioid-related emergency department visits, costing the healthcare system an estimated $47.5 million per year.

Based on the study results, Aspenti Health plans to develop educational programs that warn about the dangers of co-using opioids and benzodiazepines.

“We identified geographically hotspots where co-use was more prevalent, so we can target our educational initiatives centered on those geographical locations—not just to providers, but also to families and patients—to raise awareness about co-use so the risks are mitigated collectively,” Warrington said.

Advancing the Value-based Healthcare Agenda

The Executive War College Clinical Lab 2.0 “Shark Tank” advances a conversation about the lab industry’s future that began at the inaugural 2016 Project Santa Fe meeting. Lab industry stakeholders brainstormed about the transition from volume-based to value-based healthcare, and the role laboratory-driven innovations could play in reducing total cost of care.

As healthcare shifts to a value-based reimbursement model, Wilkerson believes laboratory leaders must re-engineer their role in the continuum of care by creating meaningful clinical diagnostic insights for population health initiatives.

“What’s your executive leadership concerned about? What are your payers concerned about? What are your accrediting or regulatory bodies concerned about? What are their top priorities and how can you do something that improves patient care but helps them address their problems as well?” she asks. “That’s where you create value.”

As the Clinical Lab 2.0 Innovation Award winner, Aspenti Health will receive:

  • An invitation to speak at national lab conferences this fall;
  • A consultation with a Project Santa Fe member lab to discuss successful Clinical Lab 2.0 innovations and identify new ways to deliver more value in patient care; and
  • Publication of a case study of their Clinical Lab 2.0 project by Dark Daily or its sister publication The Dark Report.

With labs in Vermont and Massachusetts, Aspenti continues to identify opportunities for directly contributing to improvements in the care of substance abuse and pain management patients. Warrington says that with its SDH project, Aspenti plans to focus on other key laboratory outcome measures—such as treatment adherence and relapse. Next steps include integrating this work into the practices of partner doctors within the University of Vermont Health Network.

Wilkerson’s advice to other clinical laboratories is to follow Aspenti Health’s lead.  

“When you look at the national trends, the percentage of traditional fee-for-service or volume-based healthcare is going to go down to 25% of the total healthcare spend by 2021,” she points out. “The other 75% will be based on value-added services around quality metrics, efficiency, cost reduction, utilization, etc. Labs that aren’t starting to think this way now are going to be behind and at risk in the future.”

—Andrea Downing Peck

Related Information:

Aspenti Health Wins Clinical Lab 2.0 Innovation Award

First-Ever ‘Shark Tank’ on Clinical Lab 2.0 and Adding Value Happens May 2 in New Orleans: Clinical Laboratories with Innovative Services Invited to Present

Improving American Healthcare Through “Clinical Lab 20”: A Project Santa Fe Report

National Institute on Drug Abuse: Benzodiazepines and Opioids

Project Santa Fe Labs Deliver Value with Tests

Improving American Healthcare Through “Clinical Lab 2.0”: A Project Santa Fe Report

Chairman and CEO David Abney Explains UPS’ Drive Toward Drone Technology

UPS’ program on WakeMed Hospital’s Raleigh campus in N.C. is first drone delivery service cleared by FAA for commercial purposes

UPS (NYSE:UPS) Chairman and CEO David Abney emphasizes patients, not packages, in the company’s new drive toward drone technology in medical laboratory specimen transport and logistics.

Abney closed Day 1 sessions of the 24th Annual Executive War College on Lab and Pathology Management (EWC) which continues through Thursday in New Orleans.

“Healthcare is a strategic imperative for us,” Abney said. “We deliver a lot of important things, but lab [shipments] are critical, and they’re very much a part of patient care.”

UPS entered the healthcare sector in 2000 with its acquisition of Livingston HealthCare. In 2016, the company acquired Marken, a move that Abney said, “sent a clear message to our customers that we were taking healthcare and clinical trials very seriously.”

UPS Chairman and CEO David Abney (above) explained the company’s new drive toward drone technology in medical laboratory specimen transport and logistics. Abney closed Day 1 sessions at the 24th Annual Executive War College on Lab and Pathology Management. (Photo copyright: DARK Daily.)

Clinical Laboratory Specimens Delivered by Drone

With healthcare deliveries already a big part of UPS’ ground business, the company now moves lab specimens by drone on WakeMed’s hospital campus in Raleigh, N.C. The effort marks the first commercial daily drone service to be cleared by the Federal Aviation Administration (FAA) for lab specimen transport, and it is made possible through UPS’s new partnership with Menlo Park, Calif.-based Matternet.

Matternet Founder and CEO Andreas Raptopoulos described how the new technology is impacting turnaround time, specimen stability, and viability. The “Future of Lab Logistics” session at EWC, featuring Raptopoulos and Shannon DeMar, Senior Marketing Manager Healthcare Strategy at UPS in Atlanta, Ga., brought questions about FAA regulations, risk mitigation, and more. Laboratory leaders are looking at how to take their logistics to the next level.

On-Demand/Same-Day Delivery of Medical Lab Samples

The UPS/Matternet program represents a major milestone for unmanned aviation in the United States, according to UPS, in a recent release. Currently, the majority of medical samples and specimens are transported across WakeMed’s expanding health system by courier cars. The addition of drone transport provides an option for on-demand and same-day delivery, the ability to avoid roadway delays, increase medical delivery efficiency, lower costs, and improve the patient experience.

North Carolina Department of Transportation (NCDOT), which is working to leverage drones to expand healthcare access for the residents of North Carolina, supported Matternet in conducting first-round test flights using the company’s drone technology on WakeMed’s campus in August 2018 as part of the FAA’s Unmanned Aircraft System (UAS) Integration Pilot Program (IPP).

More to Come at EWC 2019

How drones, sensors, and new technologies are poised to increase the quality and accuracy of specimen transport and logistics represented just a slice of the first full day of sessions at Executive War College. UPS is an official partner and sponsor.

Also speaking at the 24th Annual Executive War College on Lab and Pathology Management:

Evolving market trends are creating both concern and opportunities for the clinical laboratory industry. New sources of revenue are essential at a time when fee-for-service prices for lab tests are decreasing.

Early registration is already open for 2020 Executive War College, happening April 28-29, in New Orleans.

Liz Carey

Related Information:

WakeMed Uses Drone to Deliver Patient Specimens

24th Annual Executive War College on Lab and Pathology Management

UPS Drones Are Now Moving Blood Samples Over North Carolina

UPS Partners with Matternet to Transport Medical Samples Via Drone Across Hospital System in Raleigh, N.C.

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

Another big question is whether the lobbying of medical laboratory and pathology societies can educate and convince members of Congress to delay and reform the PAMA Final Rule that uses the market price study of what private payers pay for lab tests

Coming in just five months are the deepest, most painful clinical laboratory test price cuts ever implemented by Medicare officials. During calendar 2018 alone, both the Centers for Medicare and Medicaid Services (CMS) and the Office of Inspector General US Department of Health and Human Services (OIG) expect the price cuts to the Medicare Part B Clinical Laboratory Fee Schedule (CLFS) to lower spending on lab tests by $400 million!

The bad news doesn’t stop there. Lab industry observers say that significant numbers of hospital laboratories and independent lab companies are unprepared for the drop in revenue they will experience once the Medicare price cuts take effect. And, with only 157 days remaining before Jan. 1, 2018, medical laboratory executives and pathologists have precious little time to prepare their labs to operate on significantly less Medicare revenue.

PAMA Market Study of What Private Payers Pay for Clinical Laboratory Tests

Blame it on the Protecting Access to Medicare Act (PAMA) of 2014! PAMA directed CMS to conduct a market study of the lab test prices paid by private health insurers, and then use this data to set the prices of the CLFS. As many lab professionals know, CMS spent the last 24 months publishing a final price reporting rule that defined which medical laboratories must report the prices they are paid by private payers, and then collecting that data.

The data reporting period ended on May 31. In coming months, CMS will publish the new CLFS test prices and allow time for public comment.

Recognizing the need to help lab executives and pathologists understand the scale and scope of the Medicare lab test price cuts coming their way, Dark Daily and its sister publication, The Dark Report, have asked two experts with unique knowledge about this issue to give interested lab managers an up-to-the-minute intelligence briefing during an important webinar. It’s titled, “Deep Medicare Fee Cuts Are Coming to Your Clinical Laboratory in 157 Days: What You Must Do Now, Why Congress Might Intervene, and Action Steps to Protect Your Lab’s Financial Integrity,” and it happens later this week on Thursday, July 20, at 1 PM Eastern.

First Opportunity to See What Private Payers Pay for Medical Laboratory Tests

The first expert to speak is Lâle White, Executive Chairman and CEO of XIFIN, Inc., a health information technology (HIT) company headquartered in San Diego. Annually, White and her colleagues handle as many as 300 million lab test claims for hundreds of their clinical laboratory clients. Also, XIFIN is electronically interfaced with every health insurance plan in the US. These two facts mean that White has essentially the same data their lab clients reported to CMS.

During her presentation, White will show you how her company analyzed the real information from hundreds of millions of medical lab test claims that were reimbursed by thousands of private payers. You are in for a big surprise!

Learn Why Medicare Lab Test Fee Cuts Will Be Deep and Painful

XIFIN’s conclusions are based on real-world data. They demonstrate how the CMS final rule was written to direct the way federal officials calculate and set the 2018 Part B clinical laboratory test prices, and reveal why the fee cuts will be deep and painful for the lab industry’s highest-volume tests. You’ll hear facts about XIFIN’s analysis and learn to use that knowledge to model and predict precisely how deep Medicare’s revenue cuts to your lab will be when the new price schedule becomes effective on Jan. 1.

 

Lâle White (above left), CEO of XIFIN, Inc., spoke at the Executive War College on Laboratory and Pathology Management last May, where she shared insights about the coming price cuts to the Medicare Part B Clinical Laboratory Fee Schedule (CLFS). Julie Scott Allen (above right) is Senior Vice President of the District Policy Group, Drinker Biddle, and represents the National Independent Laboratory Association (NILA) in Washington, DC. White and Allen will be speaking at a special Dark Daily webinar later this week on the current status of the Medicare fee cuts and how lab executives should respond to protect the financial integrity of their labs. (White photo copyright: The Dark Report. White photo by Linda Reineke. Allen photo copyright: Drinker Biddle.)

 

Because it is generally agreed that CMS officials will target the top 20 lab tests by volume for the deepest price cuts, the actual revenue drop will depend on your mix of tests and the volume of Medicare patients associated with each test. CMS says it will use the weighted median of the private payer lab test price data to determine its new Part B fees.

However, that is a flawed approach and the source of much criticism.

White will show why the weighted median generates a lower price than the use of a weighted average calculation. You’ll see the direct impact that CMS’ use of the weighted median will have on your lab’s Medicare revenue, beginning on Jan. 1.

Understanding Current Developments at CMS and Within Congress

Julie Scott Allen will be the second speaker on the July 20 webinar. She is Senior Vice President, District Policy Group, Drinker Biddle, and represents the National Independent Laboratory Association (NILA) in Washington, DC. In this role, Allen works with officials at CMS, the Department of Health and Human Services (HHS), and with members of Congress on issues relevant to the clinical laboratory members of NILA. She regularly participates as part of the Clinical Laboratory Coalition on these matters.

Allen will give you an up-to-the minute perspective on efforts by the clinical laboratory industry to educate officials within Congress, HHS, and CMS about the consequences of allowing the PAMA final rule price cuts to become effective on January 1, 2018. This is important information you can use to craft strategies to protect your lab’s financial stability. You’ll also recognize opportunities to contact your elected officials in Congress at the time when your input can make an important difference.

The message of many in the Clinical Laboratory Coalition to members of Congress is that, if the PAMA Medicare fee cuts happen as planned, many hospital lab outreach programs and community lab companies in the states and districts of the various Senators and Representatives will probably end up going out of business, filing bankruptcy, or selling to a national lab company.

Behind the Scenes on PAMA Fee Cuts, ACA Repeal-and-Replace

Allen will take you behind the scenes of the inside-the-beltway developments that relate to the coming Medicare Part B clinical laboratory fee cuts. Different players from the clinical laboratory community are in discussions with CMS officials about the need to delay and reform the implementation of these price cuts.

Meanwhile, there are several developments unfolding within Congress that affect clinical laboratories. Yes, one of them is the PAMA final rule on lab price cuts. However, congressional efforts to repeal and replace the Affordable Care Act (ACA) are creating opportunities for different medical specialties—including the profession of laboratory medicine—to advocate for needed reforms in their areas of clinical services.

When clinical laboratory and anatomic pathology leaders are informed, they are more effective in two roles:

  1. Protecting the clinical excellence and financial sustainability of their respective laboratories;
  2. Advocating with government officials and lawmakers on the issues that are important to keeping the nation’s laboratories financially viable and key contributors to improving the quality of patient care.

Full details about this important webinar are at this link. Or copy and paste this URL into your browser: https://ddaily.wpengine.com/webinar/deep-medicare-fee-cuts-are-coming-to-your-clinical-laboratory-in-157-days-what-you-must-do-now-why-congress-might-intervene-and-action-steps-to-protect-your-labs-financial-integrity to register.

—Michael McBride

 

Related Information:

NILA and Other Stakeholders Ask HHS to Delay the Medicare Laboratory Payment Reform Rule

Nation’s Most Vulnerable Clinical Laboratories Fear Financial Failure If Medicare Officials Cut Part B Lab Fees Using PAMA Market Price Data Final Rule

Overview of CMS-1621-F Medicare Clinical Diagnostic Laboratory Test Payment System Final Rule

Dark Report Cracks the Mystery on PAMA Pricing; Genetic Coverage Still Tough Going

XIFIN Analysis of Its Real Price Data Shows Hospital Lab Price Effect: Study Based on Hundreds of Millions of Lab Test Claims

10% PAMA Fee Cut Would Lower Medicare Pay to Laboratories by $400 Million: New OIG Report Provides Clues as to How Cuts to CLFS Prices Will Reduce Payments to Clinical Labs

CMS Issues PAMA Final Rule That Aims to Cut Medicare’s Clinical Laboratory Test Price Schedule Sharply Beginning in 2018

Deep Medicare Fee Cuts Are Coming to Your Clinical Laboratory in 157 Days: What You Must Do Now, Why Congress Might Intervene, and Action Steps to Protect Your Lab’s Financial Integrity

Biggest Opportunity for Clinical Laboratory Industry is Utilization Management of Lab Tests, But Only If It Is Done Well

Effective medical lab/physician collaborations to improve how lab tests are ordered and used can deliver big improvements in patient outcomes while reducing healthcare costs

Utilization management of clinical laboratory tests may be the single hottest trend in laboratory medicine today. Across the nation, medical laboratory scientists and pathologists are getting out of the lab to collaborate with physicians to meet the common goal of ordering the right test for the right patient at the right time.

“There are two urgent reasons why clinical laboratories and anatomic pathology groups are engaging with clinicians in projects to improve the utilization of lab tests and both involve money,” stated Robert L. Michel, Editor-In-Chief of The Dark Report. “First, an effective project to improve how physicians use lab tests can return immediate savings to both the lab and the parent hospital. Utilization management projects of this type have the goal of reducing or eliminating orders for duplicate tests, unnecessary tests, and outmoded lab assays. For hospital labs with shrinking budgets, the speedy savings that result from these lab test utilization efforts provide welcome relief.

Progressive Medical Laboratories Want to Deliver More Value

“Second, progressive medical laboratories that want to increase the value of their lab testing services to protect budgets and claim a fair share of value-based payments are going one step further,” explained Michel. “These labs are organizing collaborative projects with physicians and hospital administrators to leverage specific lab tests in ways that measurably improve patient outcomes while, at the same time, contributing to sizeable reductions in the overall cost per patient encounter.”

Today, almost every clinical laboratory and pathology group is under significant and sustained financial pressure. Payers continue to reduce the prices they pay for lab tests. Similarly, hospitals and health systems—facing flat or declining volume of inpatients—are pushing budget cuts across all their clinical service lines, including their labs. These trends force lab directors to pursue the twin strategy of cutting costs while increasing revenue.

Better utilization of lab tests is a business and clinical strategy that enables labs to meet both goals. When physicians do a better job of ordering the right test, and following up the lab test results with the right therapies, healthcare costs go down while patient outcomes improve.

Further, with Medicare and private health insurers continuing to move toward value-based reimbursement arrangements, any clinical lab that can step up and help its client physicians achieve documented improvements in patient outcomes has a legitimate claim to fair reimbursement under bundled and budgeted payment arrangements.

Keen Industry Interest in Utilization Management of Clinical Lab Tests

Proof of the keen interest that lab managers have in utilization management of clinical laboratory tests is the fact that a session on this topic was one of the best-attended at this spring’s Executive War College on Lab and Pathology Management.

Speaking first during this session was Tammy Fletcher, Administrator of Value-Based Services for Mayo Medical Laboratories (MML) in Rochester, Minnesota. As physicians and clinical pathologists at the Mayo Clinic develop and demonstrate clinical guidelines and protocols that utilize medical laboratory tests in the most effective way, Fletcher helps provide that information to client labs throughout the United States. This gives her a unique perspective on the best ways that lab managers can support successful lab test utilization management projects.

 

Tammy Fletcher (above), Administrator of Value-Based Services at the Mayo Medical Laboratories (MML), located in Rochester, Minn., is shown speaking at the Executive War College on Laboratory and Pathology Management last May. She is involved in helping the clinical laboratory clients of MML develop and implement effective utilization management programs to improve how physicians use medical laboratory tests. She will be speaking as part of a utilization management webinar that takes place on June 29. (Photo copyright: The Dark Report. Photo by Linda Reineke.)

Fletcher emphasized that, for utilization management initiatives to deliver optimal benefits, labs should follow a road map with five primary elements. They are:

  • Assess and assemble;
  • Message;
  • Education and guidance;
  • Analytics and evidence; and
  • Payer collaboration.

She emphasized that labs should understand how improving utilization of clinical lab tests helps the parent hospital and health system in two important ways. One way is to score higher in assessments by accrediting bodies. The second way is to deliver measurable improvements that meet and exceed the criteria of the health insurers that are key to the institution’s success, including Medicare and Medicaid.

Utilization Management Successes at Minneapolis Health System

Next to speak was Bobbi Jo Kochevar, MBA, MT (ASCP), Director of Diagnostic Services at North Memorial Health Care in Robbinsdale, Minnesota. Her clinical laboratory serves multiple hospitals and an integrated health system. Thus, the lab team has the opportunity to develop utilization management projects that can involve providers in inpatient, outpatient, and outreach settings in ways that contribute to improved patient care.

Bobbi Jo Kochevar (above), MBA, MLS(ASCP), is Director of Care Coordination for Diagnostic and Therapy Services at North Memorial Health Care in Robbinsdale, Minn. In recent years, she and her clinical laboratory team have conducted several utilization management projects involving how physicians order and use medical laboratory tests. These projects have improved patient care while significantly reducing billing denials. Kochevar will be sharing the lessons learned and successes of her lab team’s utilization management projects during Dark Daily’s upcoming webinar on June 29. (Photo copyright: The Dark Report. Photo by Linda Reineke.)

What caught the audience’s attention during this session was Kochevar’s demonstration of how the clinical laboratory was able to engage clinicians in utilization management projects targeting use of such assays as homocysteine and Enterobacteria phage T4 in ways that improved patient care while also meeting payer criteria. The result was improved patient outcomes and a substantial reduction in billing denials because more claims were properly documented at first submission, thanks to improved physician adherence to both the clinical protocols and to documenting compliance to payers’ requirements.

Many Labs Working to Improve Utilization of Medical Laboratory Tests

Because utilization management of lab tests is now a high priority at most clinical labs and pathology groups, Dark Daily is hosting a special webinar that features Tammy Fletcher and Bobbi Kochevar as the speakers titled, “Simple, Swift Approaches to Lab Test Utilization Management: Proven Ways for Your Clinical Laboratory to Use Data and Collaborations to Add Value.” The webinar takes place on Thursday, June 29, 2017, at 1PM EDT.

This is a must-attend for clinical pathologists, lab managers, and lab scientists who wants to:

  1. Develop their skills and knowledge in how to design an effective utilization management (UM) project; and
  2. Learn the best method for encouraging physicians and administrators to launch a winning collaboration and implement a UM project.

Fletcher will identify best practices in utilization management projects that she has learned from her work within the Mayo Clinic and with hospitals and health systems throughout the nation. She will discuss the five elements of the utilization management roadmap.

Nine Foundational Competencies in Utilization Management

Most importantly, Fletcher will describe the nine foundational utilization management competencies in detail. These range from leadership support and operations bandwidth to clinical content and knowledge diffusion. You’ll learn the essentials, as well as receive practical advice on specific pitfalls to avoid.

Kochevar will provide you and your lab team with the practical lessons learned from doing multiple, effective utilization management projects within her integrated health system. This is useful, handy knowledge that you can apply immediately.

An important topic that Kochevar will cover involves the five categories of lab test utilization. She will explain what needs to happen differently if a utilization management project is targeting repetitive or duplicate testing versus contraindicated screening and testing. Kochevar will help you understand how to customize a utilization management project to best address the different concerns and patient care improvement opportunities associated with each of the five different categories of lab test utilization.

The webinar on utilization management is ideal for clinical pathologists, lab managers, and anyone working on utilization management teams. It will help beginners understand the basics of working with clinicians on projects to improve lab test utilization while providing actual case studies and advanced techniques for intermediate and advanced practitioners.

To see the agenda and to register, use this link https://ddaily.wpengine.com/webinar/simple-swift-approaches-to-lab-test-utilization-management-proven-ways-for-your-clinical-laboratory-to-use-data-and-collaborations-to-add-value. (Or copy and paste this URL in your browser: https://ddaily.wpengine.com/webinar/simple-swift-approaches-to-lab-test-utilization-management-proven-ways-for-your-clinical-laboratory-to-use-data-and-collaborations-to-add-value.)

 

—Michael McBride 

 

Related Information: 

Simple, Swift Approaches to Lab Test Utilization Management: Proven Ways for Your Clinical Laboratory to Use Data and Collaborations to Add Value

Increasing Costs for Genetic Tests are Busting Lab Budgets

Lab Test Utilization Delivers Big Gains at Cleveland Clinic

As Medical Laboratory Test Utilization Grows, Health Insurers Develop Programs to Manage Rising Costs

Naval Medical Center Study Reveals More than One-third of Genetic Tests are Misordered; Clinical Laboratories Critical to Improving Lab Test Utilization

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