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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Nearly One-Third of Traditional Medicare Payments Now Based on Value-Based Reimbursement and Alternative Payment Models

Faster than expected transition from fee-for-service healthcare should grab attention of clinical laboratories and anatomic pathology groups who face financial unknowns under new payment systems

Clinical laboratory executives should take note of a key financial fact. The transition from fee-for-service healthcare to value-based reimbursement is occurring at a faster clip than the Department of Health and Human Services (HHS) anticipated last year when federal officials announced a plan to tie 30% of traditional Medicare spending to alternative payments models by the end of 2016.

That means the transition away from fee-for-service payment for medical laboratory tests and other healthcare services is moving ahead of schedule. As evidence, HHS recently announced it reached the 30% target at the start of 2016, nearly a year ahead of the schedule laid out when the Obama Administration outlined a plan to reward healthcare providers based on quality of care rather than the volume of services they provide.


Even as Medicare ACOs Delivered Mixed Results in 2014, Primary Care Physicians Were Awarded Biggest Share of Bonus Payments

AJMC study shows ACOs that allocate majority of shared savings to primary care providers are more likely to generate savings

When it came time to pay bonuses to Medicare’s Pioneer ACOs and Shared Savings Program (MSSP) ACOs based on 2014 results, a substantial proportion of the payments went to primary care physicians compared to hospitals and specialist physicians. Significantly, only a minority of these ACOs qualified for bonus payments.

Pathologists and clinical laboratory managers watching the growth of ACOs will find it notable that primary care doctors received 46% of the shared-savings bonuses in the program’s first two years. Hospitals received 27% of the incentives while 20% went to specialists, according to a Modern Healthcare report.

High Expectations That ACOs Can Help Control Healthcare Costs

Twenty Pioneer ACOs and 333 Medicare’s Shared Savings Program (MSSP) ACOs combined to produce more than $411 million in total savings in 2014, although only 29% of the organizations generated enough savings to earn a bonus, a CMS Fact Sheet indicated.

“These results show that accountable care organizations as a group are on the path towards transforming how care is provided,” stated CMS Acting Administrator Andy Slavitt in a statement. “Many of these ACOs are demonstrating that they can deliver a higher level of coordinated care that leads to healthier people and smarter spending.” (more…)

Experts Say Medicare Accountable Care Organizations (ACOs) Produced Mixed Results in 2014 Even as Enrollment Continues to Grow Significantly

Clinical laboratories and pathology groups can expect to see more growth in the number of patients served by ACOs and that will require labs to have a new pricing strategy

Will ACOs be the next big thing in American healthcare? Many people are betting that will be true as the number of ACOs continues to increase. Some reports indicate that as many as 750 Medicare and private ACOs were in operation as of early 2015, compared to about 250 ACOs in 2013.

Pathologists and clinical laboratory managers watching the ACO trend will find it significant that Medicare ACOs now serve about 5.6 million beneficiaries. According to a report issued by Oliver Wyman, that is about 11% of all Medicare beneficiaries. Providers in these ACOs are paid under a different arrangement than the long-established Part B fee-for-service price schedule.

The big question mark about ACOs is whether they can deliver significant cost savings while improving patient outcomes. This summer, officials at the federal Centers for Medicare & Medicaid Services (CMS) reported on the savings generated by the agency’s pilot ACO programs. The two main accountable care organization programs are the Medicare Shared Savings Program (MSSP) and the Pioneer ACO Program. (more…)

Falling Inpatient Revenues at Many Hospitals Is Sign of Healthcare’s Transition to New Models of Integrated Clinical Care and Changes in Medical Laboratory Test Utilization

Statistics indicate that inpatient admissions and revenues are falling nationally, a development that affects clinical laboratories in hospitals and health systems

One important trend that directly impacts the medical laboratories of hospitals and health systems is the falling rate of inpatient registrations seen nationally in recent years. What exacerbates this trend is the fact that many payers are cutting the prices they pay for certain inpatient services.

Collectively, these two developments mean less inpatient revenue for many hospitals and that often translates into reduced budgets for the clinical laboratories.

But that is not the whole story concerning inpatient revenue. Spurred by the Affordable Care Act (ACA) and other market developments, payers now want to shift reimbursement away from fee-for-service to new models of reimbursement. This includes capitation or bundled payment models. (more…)

While ACO Care Coordination Holds Promise for Improving Quality and Lowering Healthcare Costs, It’s Still a ‘Work in Progress’

Healthcare Experts Now Exploring New Care Coordination Strategies and Overcoming Gaps in Measuring Performance

For many healthcare professionals, the jury is still out as to whether accountable care organizations (ACOs) will prove effective at delivering the two important goals of improved patient outcomes at a lower overall cost of care over an extended period of time.

That is why close attention is being given to the experience of Medicare’s Pioneer ACOs, since they were among the first ACOs to begin delivering clinical services. In particular, physicians and hospital administrators want to learn useful lessons from the successes and setbacks of the different Pioneer ACOs.

By improving the coordination of care, accountable care organizations are expected to provide patients with better care while reducing healthcare costs. That’s why the Center for Medicare & Medicaid Services (CMS) Medicare Shared Savings Program is structured to pay ACOs financial incentives or impose penalties, depending on whether performance quality measures and healthcare spending targets are met. (more…)