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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Failure to Pay for New Molecular CPT Codes Created Money Crisis for Clinical Laboratories and Pathology Groups

Confusion, unhappiness, and many unresolved issues remain about the way government and private payers are handling claims for molecular diagnostic tests covered by the 114 new CPT codes
Dust is settling from the fiasco triggered by the Medicare program’s failure to be ready on January 1, 2013, to settle molecular diagnostic test claims filed under the 114 new Tier 1 and Tier 2 molecular CPT codes. The damage is not just limited to Medicare test claims, but also involves private health plans that were waiting to let the Medicare program set precedents on coverage and prices for the new molecular test codes.

Many Clinical Laboratories Must Cope With an Unsatisfactory Situation

Although federal Medicare officials and Medicare contractors have scrambled to rectify the situation, even today there is much unhappiness across the clinical laboratory industry about the current state of things. That unhappiness extends to state Medicaid and private payers because many of these payers have been slow to publish coverage guidelines and prices for these new molecular test CPT codes.

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Failure to Pay for New Molecular CPT Codes Creates Money Crisis for Clinical Laboratories and Pathology Groups

Medicare contractors are setting prices that are 40% to 60% lower than they paid medical laboratories last year for these same molecular diagnostic tests

Non-payment for most new molecular diagnostic test CPT codes continues to be a problem for the majority of medical laboratories across the country.

A lack of payment for these claims, have forced some clinical laboratories and pathology groups to stop doing molecular testing and lay off staff. At least one lab  company shut its doors, blaming non-payment by its Medicare contractor as the primary reason.
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Many Clinical Laboratories, Other Providers Struggle to Transition to 5010; Likely To See Payment Shortfall

Payors also are straining to handle new payment requirements under Form 5010, say intermediaries

Across the nation, providers, including clinical laboratories and pathology groups, are holding their collective breath as they wait to see whether implementation of the electronic claim Form 5010 goes smoothly, becomes a disaster, or ends up somewhere between.

Just two weeks into this national transition, experts are predicting that most providers—including medical labs and pathology groups—are likely to see a drop in revenue collections. Worse yet, it is not until the first claim denial forms are received from payors that clinical labs and pathology groups can learn the reasons why different payors rejected these claims.

UNEXPECTED PROBLEMS

“We expected, with a transition of this magnitude, that the industry would encounter challenges,” said Jackie Griffin, Director, Client Services, Gateway EDI, a bill-paying clearinghouse in St. Louis, Missouri. “But in addition to the problems we expected, we’ve seen a lot of unexpected problems too.”

Gateway EDI serves both small and large practices, but has seen that its clients that are small labs and physician practices of 1 to 5 doctors are experiencing more problems than larger provider organizations because the smaller entities lacked the resources to prepare for 5010, Griffin explained. Providers are likely to see less reimbursement in the coming weeks because many claims are being rejected and going unpaid, she said. (more…)

How Clinical Pathology Laboratories Are Preparing to Support EMR Adoption by Office-Based Physicians

Some U.S. laboratories already ramping up their LIS resources to meet demand for LIS-to-EMR interfaces


Clinical laboratory managers and pathology groups need to prepare for what is expected to be a tsunami of requests by physicians who want their newly-implemented electronic medical record (EMR) systems to be interfaced with their laboratory’s LIS. This approaching tsunami is a consequence of the billions in federal incentive payments designed to encourage doctors to adopt EMRs.

It means lab managers and pathologists must actively prepare their medical laboratory to step up and support the “meaningful use” needs of client physicians. As mandated by the HITECH Act, healthcare providers are required to engage in “meaningful” patient health information (PHI) exchanges. Because more than 400,000 physicians will implement electronic medical records (EMR) in the next 60 months, labs should not delay in establishing a strategy.

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HITECH ACT Mandates New Patient Privacy Requirements on Labs and Pathology Groups

Labs Must Report Privacy Breaches of 500 or More to the Media

Call it HITECH collides with HIPAA! Most pathologists and lab executives know that passage of the HITECH Act was the part of 2009’s American Recovery and Reinvestment Act (also referred to as “ARRA” or the “stimulus bill”). HITECH provides incentives for the expanded use of electronic health records by physicians and other providers.

But what is lesser known is how the HITECH Act creates new legal obligations of covered entities and business associates under the Health Insurance Portability and Accountability Act of 1996 (HIPPA). These new legal mandates are designed to protect the privacy and security of the patient. They require clinical laboratories and all providers to take specific actions whenever patient privacy is breached.
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