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Clinical Laboratories and Pathology Groups
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Clinical Laboratories and Pathology Groups
Hosted by Robert Michel
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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

Jul 17, 2017 | Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Uncategorized

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

Nation’s Smaller Community Medical Laboratories Have Major Concerns about Financial Survival Once Medicare Officials Implement Deep Price Cuts to Lab Test Fees in 2018

Feb 8, 2017 | Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Pathology, Laboratory Testing

In vitro diagnostic manufacturers and medical distributors share concerns, along with other types of medical labs in nation’s small cities and hinterlands that include rural hospital labs and physician office labs (POLs) because, along with financial erosion, there is the potential of reduced access by Medicare beneficiaries to clinical lab tests where they live

SAN ANTONIO, TEXAS—Owners and managers of community and regional independent lab companies and community laboratories gathered here last week at a lab conference to assess what many believe is a bleak future. That’s because, in less than 11 months, medical laboratories across the United States will be dealing with unprecedented price cuts to the Medicare Part B clinical laboratory fee schedule (CLFS) and how those price cuts erode the financial stability of these essential labs, often the only local medical laboratory serving smaller communities and rural areas throughout the nation.

The number one financial threat of concern to these community and regional lab owners is how the Protecting Access to Medicare Act (PAMA) rule for private-payer market-price reporting will be used by the Centers for Medicare and Medicaid Services (CMS) to make fee cuts—effective on January 1, 2018—that will be financially devastating to the nation’s small and mid-sized community and regional labs, rural hospitals, some individual and group physician practices, and community hospitals—while causing increased market concentration that benefits the nation’s two dominant publicly-traded lab companies. (more…)

Tough Times Ahead for Anatomic Pathology as Group Revenue Declines and Pathologists’ Incomes Drop Due to Payer Price Cuts, Narrow Networks, and Claims Denials

Jan 18, 2017 | Coding, Billing, and Collections, Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory Pathology, Laboratory Testing

Many pathology groups report shrinking revenue, yet some innovative pathology groups continue to grow through savvy pricing and by adding value to payers and physicians

Times are tough for anatomic pathologists in private practice. Medicare programs and private payers regularly slash prices for both technical component and professional component services. In addition, the growing number of narrow networks means that pathology groups find themselves excluded from access to an ever-larger proportion of patients.

This is not news for the typical anatomic pathologist working in a private practice setting, who today may be making substantially less personal income than just a few years ago. Over the past decade, pathologists have seen multiple assaults to their revenue by client physicians, health insurers, and consumers. (more…)

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

Jan 9, 2017 | Compliance, Legal, and Malpractice, Laboratory News, Laboratory Pathology, Laboratory Testing

As of January 1, CMS has begun accepting private payer market price data from certain medical laboratories required to report this information

Only 12 months remain before clinical laboratories in the United States face the ticking financial time bomb set to explode on January 1, 2018. That time bomb is the cuts to Medicare Part B clinical laboratory test fees that the federal Centers for Medicare and Medicaid Services (CMS) will implement on that date.

The Dark Report, Dark Daily’s sister publication, predicts that the Protecting Access to Medicare Act of 2014  (PAMA) private payer market price reporting final rule—if implemented by CMS as currently written—has the potential to be the single most financially disruptive event to hit the clinical laboratory industry during the past 25 years. At greatest risk are the nation’s smaller community laboratories and rural hospitals that rely on revenue from Medicare Part B lab testing to remain financially viable. (more…)

Coming PAMA Price Cuts to Medicare Clinical Lab Fees Expected to Be Heavy Financial Blow to Hospital Laboratory Outreach Programs

Dec 12, 2016 | Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing

All hospital labs need to understand the negative financial impact to their labs and have a plan to absorb the fee cuts and remain clinically and financially viable

If you believe some experts, in just 13 months many of the nation’s hospital medical laboratory outreach programs will experience a financial disaster that could put them out of business and reduce Medicare patients’ access to lab testing services. This event happens on January 1, 2018, when Medicare officials implement substantial cuts to the Part B Clinical Laboratory Fee Schedule (CLFS).

These fee cuts are the result of the section of the Protecting Access to Medicare Act (PAMA) that requires the Centers for Medicare and Medicaid Services (CMS) to collect private-payer lab test price data from the nation’s medical laboratories and use that data to establish fees for the CLFS. CMS officials estimate that the fee cuts will reduce payments to labs by as much as $400 million in 2018.

What puts the laboratory outreach programs of the nation’s hospitals and health systems at significant financial risk is the fact that CMS, as verified by reports issued by the Office of the Inspector General (OIG), intends to reduce fees on the 25 highest-volume highly-automated lab tests that make up 59% of what Medicare spent on clinical laboratory tests in 2014.

Stated differently, the OIG says that, in 2014, Medicare paid a total of $7 billion for clinical laboratory tests. Of this total, the Medicare program paid $4.1 billion for the top 25 tests. In a report issued in September, the OIG wrote, “Changes in the Medicare payment rates for these 25 tests could have a significant impact on overall Medicare spending for lab tests when the new payment system for lab tests goes into effect in 2018.” [Italics by Dark Daily.] (more…)

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