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

Hosted by Robert Michel

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

Hosted by Robert Michel
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Alert! ICD-10 Conversion Is Now 56 Days Away and Could Put Financial Squeeze on Clinical Laboratories and Pathology Groups

Big question for medical laboratory managers is whether Medicare, private health insurers, and medical claims clearinghouses can make a smooth changeover when processing lab test claims using ICD-10 codes

Conversion to ICD-10 is now only 56 days away! Physicians are not the only ones with a large stake in the conversion from ICD-9 to ICD-10 that takes place October 1, 2015. Clinical laboratories and anatomic pathology groups will be watching to see whether physicians include appropriate ICD-10 codes on lab test forms for Medicare patients.

The Medicare program requires appropriate ICD codes on medical laboratory test claims for Medicare patients. That is one reason why clinical laboratories and anatomic pathology are financially vested in a smooth conversion process. All Medicare Part B claims for medical laboratory tests must be submitted with an appropriate International Classification of Diseases (ICD) code provided by the physician who ordered the lab tests. The Medicare program will not reimburse lab test claims without an appropriate ICD code. No code, no payment to the lab, even though it did the test.

Mark Roth, Physicians Choice Laboratory Service Vice President of Operations, and a speaker at this year’s Dark Report Executive War College, predicts ICD-10 implementation will increase claims denials by 20%.

“People really need to plan ahead for [reduced] cash flows in October and November,” Roth told Dark Daily. “If your Medicare denials go through the roof, all your commercial payer denials are probably going to go through the roof as well. Extending your DSO (Days Sales Outstanding) from 45 to 55 days has a material financial impact.” (more…)

Synthetic Biologists Demonstrate Ability to Rapidly Create Cheap, Accurate In Vitro Diagnostics Tests That Could Eventually Help Pathologists Diagnose Disease

Wyss Institute develops prototype Ebola test in less than 12 hours with $20 in materials, perhaps paving the way for inexpensive paper-based diagnostic tests with a wide range of applications outside the medical laboratory

One goal of many synthetic biology researchers is to create in vitro diagnostic testing systems that produce results that are as accurate as those produced in today’s state-of-the-art clinical laboratories, yet are much cheaper to run because they incorporate low-cost materials, such as paper.

Recently, two teams of researchers worked to demonstrate how several synthetic biology methods, when combined with programmable paper-based diagnostic platform, could detect antibiotic-resistant bacteria and strain-specific Ebola virus. These findings were published in a peer-reviewed medical journal last fall.

Such cell-free circuits embedded in paper could be the breakthrough in synthetic biology that leads to pocketsize blotter tests that can detect such diseases as Ebola in the field.  Should this line of research be applied to clinical settings, pathologists and medical laboratory scientists could soon be processing bandages that change colors in the presence of certain bacteria, or examining paper-based clothing infused with diagnostic laboratory tests that react to bio-markers specific to a chronic disease patient’s condition. (more…)

Boston’s Caritas Christi Health Sells its Lab Outreach Business, Forms Alliance with Quest Diagnostics

It’s the second acquisition of a hospital lab outreach program in past six days

Several days ago, a two-part deal was announced between Quest Diagnostics Incorporated (NYSE:DGX) and Caritas Christi Health Care of Boston, Massachusetts. Caritas sold its clinical laboratory outreach business to Quest Diagnostics and both parties formed a “strategic alliance” going forward that centers upon laboratory testing and informatics integration. Caritas will continue to own and manage the laboratories in its six hospitals.

This is the second sale of a hospital laboratory outreach business in the past two weeks. On August 12, Sonic Healthcare (SYD:SHL) acquired Piedmont Medical Laboratories (PML) of Winchester, Virginia. PML was owned by Valley Health, an eight-hospital health system. (See Dark Daily, ‘Sonic Healthcare’s Latest Lab Buying Spree Nets Two U.S. Labs for $20 Million”, August 13, 2009.)

Teaching Lab Managers to Be Coaches Gains Favor as Productivity Booster

Coaching Proves Effective Way To Improve Performance Of Lab Managers and Lab Staff

In the midst of a sustained labor shortage—and facing the impending retirement of highly-experienced baby boomer managers—innovative clinical laboratories and pathology labs are taking special efforts to develop the management and leadership skills of their most promising younger managers. Coaching, rather than mentoring, is more often the preferred approach to achieve this goal.

“Coaching programs in the lab industry are growing in number and effectiveness. This is especially true among the more innovative clinical laboratories in the United States,” observed Jeff Smith, Vice-President of Leadership Development for Slone Partners and Titan Management University. (more…)

Pathology Supergroup is Acquired by a New National Pathology Company

UniPath of Denver, Colorado sells its Technical Laboratories

February 9, 2009

Having shopped itself to a number of interested buyers in recent years, pathology supergroup UniPath, LLC,  in Denver, Colorado, has sold its histology laboratory operations to American Pathology Partners (APP) , of Brentwood, Tennessee. It keeps full ownership of its pathology professional corporation, which has an agreement to provide services to APP.

This acquisition has several interesting and innovative aspects. These are analyzed in detail in the current issue of The Dark Report. (See “Denver’s UniPath Sells Its Histology Labs to APP”, The Dark Report, February 2, 2009) Probably the most significant fact is that American Pathology Partners now has a platform lab that enables it to immediately begin seeking new business. That may mean that local pathology groups in the Rocky Mountain states and further west will have a new pathology player in the marketplace.

“This partnership advances APP’s vision of joining with the country’s top pathologists, aligning incentives, and working together to improve the delivery of exceptional care,” said CEO Bob Yeager of APP. “APP will market UniPath’s services to small pathology groups of two, three, or more physicians on the west coast and on the east coast as well. APP has financial support from New Enterprise Associates, a venture capital firm in Chevy Chase, Maryland.

UniPath, LLC, has been a successful, aggressive pathology competitor within the Rocky Mountain Region. The company has a 40,000 square foot central laboratory in Denver, on-site labs in 11 hospitals in Colorado, and expertise in all pathology subspecialties. Among its 120 employees are 21 Board-certified pathologists, 19 of whom are partners in the professional corporation. The other two are on a partnership track. UniPath executives told Dark Daily that, in 2008, UniPath analyzed 173,000 patient cases generating 363,000 specimens, about two thirds of which originate from physicians’ offices and one third come from hospital procedures.

Under the terms of the new business arrangement, APP now owns and manages UniPath’s central laboratory in Denver, along with its 120 employees, and the on-site laboratories in 11 hospitals in Colorado. UniPath gets funding to support expansion, investment in technology and lab equipment, and sales support. As noted earlier, UniPath’s physicians continue to own and manage the professional corporation.

“As president of the professional corporation, what I found attractive about APP was they wanted to keep the professional corporation (PC) absolutely intact,” said Karim Sirgi, M.D., President of his interview with The Dark Report. “They allowed the PC to keep its independence with regard to decision making, staffing, and how to apply national and regional standards on the quality of care UniPath provides to referring physicians.”

Until its sale to American Pathology Partners, UniPath’s growth has come from: a) mergers and acquisitions of pathology groups in the Denver area; and, b) by investing in a regional and national marketing and sales program, funded by the partner-pathologists. UniPath’s pathologists believe their new business agreement with APP will help fuel growth in and beyond the Rocky Mountain market.

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