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

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…)

In Fixing Physician Medicare Pay, Congress Enacts Yet Another Cut in Clinical Laboratory Test Fee Schedule

A part of this legislation, the grandfather clause on Technical Component (TC) anatomic pathology services was extended through June 1, 2012.

Last Friday, clinical laboratories got bad news about new cuts to the Medicare Part B medical laboratory test fee schedule. Congress voted on a temporary funding fix to keep Medicare physician fees at current levels for 10 more months and a reduction in lab test fees was one source of the money that Congress used to fund this bill.

Pathologists and clinical laboratory managers will be disappointed to learn that the Medicare Clinical Laboratory Fee Schedule (CLFS) was cut by 2% when Congress voted on Friday, February 17, to approve a deal to extend the payroll tax cut for nine months. President Obama could sign the bill into law today (Monday, February 20). The cuts to lab test fees are estimated to total $2.7 billion over 10 years.


American Pathology Partners Announces Acquisition of Laboratory Assets of Palm Beach Pathology

This is APP’s third acquisition of an anatomic pathology laboratory since 2008

Earlier today, it was announced that American Pathology Partners had acquired the anatomic pathology laboratory assets of Palm Beach Pathology, the private pathology practice located in West Palm Beach, Florida. No purchase price was disclosed.

Consistent with its business model, American Pathology Partners (APP) purchased the pathology laboratory owned and operated by Palm Beach Pathology, along with its staff and associated assets, such as courier cars and sales representatives. The six partner pathologists of Palm Beach Pathology continue to own 100% of their professional corporation. (more…)

Medicare Laboratory Competitive Bid Repeal Passed by Senate Yesterday

Yesterday was big news for the lab industry as Senate passed the “The Medicare Improvement for Patients and Providers Act of 2008″ (HR 6331).” This bill includes repeal of the Medicare Laboratory Competitive Bidding Demonstration Project. Because the House passed this bill last month, it means the bill now moves to the President for his signature or veto.

Also included in this Medicare funding bill for 2008 are a reversal of the 10.6% cut in Medicare physician reimbursement and an 18-month extension of the “TC Grandfather clause” (which covers independent laboratories located outside a hospital that provide technical component [TC] pathology services furnished to hospital patients). On July 1, 2008, the Medicare physician fee cut of 10.6% took effect. Also on July 1, the Centers for Medicare and Medicaid Services (CMS) implemented “a policy to pay only the hospital for the technical component (TC) of physician pathology services furnished to hospital patients.”

Thus, this Medicare funding bill represents a significant victory for pathologists and the laboratory industry. It is known that the President opposes this Medicare bill, as passed, because it would cut funding for Medicare Advantage insurance plans. However, both the vote in the Senate (69-30 in favor) and the House (355 to 59 in favor) indicates the likelihood that, were the President to veto this bill, there enough votes to probably override that veto.

In the meantime, some attorneys have advice to independent laboratories that provide TC services to Medicare inpatients. They suggest that these labs hold claims originated since July 1, 2008. Once the Medicare funding bill, with the 18-month extension of the TC grandfather clause becomes law, they should be able to submit those claims and be reimbursed.

Dark Daily observes that this legislative outcome is evidence that the collective lobbying effort of the laboratory industry and various associations in Washington, DC, has achieved a degree of effectiveness unseen in more than two decades.

Related Items:

Senate Passes Medicare Package, Lab Competitive Bidding Repeal-ACLA Thanks Senate for Passing HR 6331 & Urges President Bush to Sign the Bill

Senate passes doctor reimbursement bill