Dec 12, 2017 | Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Management & Operations, News From Dark Daily
In filing Monday, lawsuit seeks to force HHS to comply with PAMA’s statutory requirements and to withhold applying the new Clinical Laboratory Fee Schedule until HHS has revised the final rule appropriately
Many clinical laboratory executives will welcome the news that a lab industry trade association has filed a lawsuit in federal court in an effort to delay and fix the final rule for Protecting Access to Medicare Act of 2014 (PAMA) private payer lab test market price reporting that Medicare officials used to lower prices on the Medicare Part B Clinical Laboratory Fee Schedule (CLFS) that is scheduled to take effect on Jan. 1, 2018.
In a lawsuit filed Monday, the American Clinical Laboratory Association (ACLA) charged that the federal Department of Health and Human Services (HHS) ignored congressional intent and instituted a highly-flawed data reporting process when setting the 2018 CLFS rates under the Protecting Access to Medicare Act of 2014.
The ACLA asked the US District Court for the District of Columbia to force HHS to comply with PAMA’s statutory requirements, to withhold applying the new CLFS until HHS has revised the final rule appropriately. The CLFS is due to take effect on Jan. 1.
The lawsuit also seeks to vacate any actions that HHS made that were not in accordance with the PAMA law and to withdraw or suspend the final rule under PAMA. The case is American Clinical Laboratory Association v. Hargan, US District Court, District of Columbia, No. 1:17-cv-2645.
Final Prices for the 2018 Part B Clinical Laboratory Fee Schedule
Last month, the federal Centers for Medicare and Medicaid Services (CMS) issued the final CLFS rates and said at the time that it did so in compliance with the 2016 final rule implementing changes to the Medicare clinical laboratory fee schedule under PAMA section 216.
“We have repeatedly advised CMS that there are significant, substantive deficiencies in the final rule, which fail to follow the specific commands of the PAMA statute,” said ACLA President Julie Khani in an ACLA press release. “Contrary to Congress’ intent, instead of reforming Medicare reimbursement rates to reflect the broad scope of the laboratory market, the Secretary’s final rule will disrupt the market and prevent beneficiaries from having access to the essential laboratory services they need.”
Shown above is Julie Khani, President of the American Clinical Laboratory Association (ACLA) speaking at the Executive War College on Laboratory and Pathology Management last May in New Orleans. In a press release announcing ACLA’s lawsuit against the Department of Health and Human Services, Khani emphasized that many clinical laboratories had advised officials at the federal Centers for Medicare and Medicaid Services (CMS) about the “significant, substantive deficiencies in the final rule” for private payer market price reported that CMS designed. (Photo copyright: The Dark Report.)
22 Healthcare Organizations Opposed Cuts to Clinical Laboratory Test Prices
The ACLA, the American Hospital Association (AHA), and more than 20 other organizations had urged CMS to suspend implementation of the new CLFS rates, which are scheduled to take effect Jan. 1. The organizations cited concerns over the data-collection process used to establish the rates, and the fact that the rates would cause clinical laboratories to struggle financially and possibly close. If the rates set under PAMA affect Medicare beneficiaries’ access to clinical lab testing, the law would have the opposite effect of its intent.
To bring the lawsuit, ACLA retained Mark D. Polston, JD, of the Washington, DC, law firm of King and Spaulding. A specialist in representing healthcare systems seeking to navigate Medicare regulations, Polston is the former Chief Litigation counsel for CMS and specializes in complicated Medicare reimbursement litigation. Recently, he successfully challenged Medicare’s so-called “two-midnight” rule that imposed a 0.2% rate cut on hospitals billing for some patients.
Medicare Program Prohibited Most Medical Laboratories from Reporting
Contrary to Congress’ directives, most laboratories were prohibited from reporting private payer data under CMS’ market-rate data-collection process, ACLA said in a prepared statement. “As a result, CMS failed to protect access to laboratory services for Medicare beneficiaries. This flawed process could cause serious financial harm to potentially thousands of hospitals, independent and physician office laboratories, and make it harder for Medicare beneficiaries to get access to medical testing, particularly in remote rural areas and in nursing homes that depend on laboratory testing services,” ACLA said.
In the lawsuit, ACLA alleged that more than 99.3% of hospitals were prohibited from reporting their market-rate data. It is believed that this is the first time this figure has been reported. In 2015, the lawsuit charged, more than 261,500 entities received Medicare payment for laboratory services but only 1,942 laboratories reported market-rate information in 2016 under the PAMA final rule. The 1,942 labs that reported market-rate data is about 0.7% of the total number of laboratories that serve Medicare beneficiaries, the lawsuit said.
Only 21 of 7,000 Hospital Laboratories Reported Data
“Moreover, contrary to Congress’ intent, the laboratories that did report information are not representative of the market as a whole,” the lawsuit added. “For example, although approximately 7,000 hospital laboratories billed Medicare for laboratory services in 2015—accounting for 24% of the Medicare payments made under the Clinical Laboratory Fee Schedule—no more than 21 hospital laboratories (and probably even fewer) reported information to the secretary, leaving hospital laboratories effectively unrepresented in the data collected by the secretary.
“Hospital laboratories are often the only laboratories available to patients in certain areas of the country, and the private payer rates they receive are often much higher than other laboratories, due to differences in competitive markets, volumes of services, and other factors,” the lawsuit charged.
The Dark Report, Dark Daily’s sister publication, provided a compelling example of the serious flaws in the market price study conducted by CMS. Writing about the state of Michigan, The Dark Report noted: “At Joint Venture Hospital Laboratory Network (JVHL), CEO John Kolozsvary said Michigan’s hospitals serve 70% of the office-based physicians in the state with outreach lab testing services. Included among these hospitals are the 120 JVHL member laboratory facilities.”
“Since our network, plus the outreach programs of another 25 or 30 hospitals, hold a significant share of outreach lab testing in Michigan, how can CMS conduct an accurate, representative market study of what private insurers pay for lab tests in Michigan if it doesn’t collect data on what private payers reimburse hospital lab outreach programs in Michigan?” stated Kolozsvary in his interview with The Dark Report.
Did CMS ‘Disregard and Violate’ PAMA Statute?
In the ACLA’s announcement of the lawsuit, Polston said, “CMS clearly disregarded and violated the statute’s specific, unambiguous directives requiring commercial rate information to be reported and collected from a broad, diverse group of market participants. Instead, information was collected from less than 1% of US laboratories.”
In the press announcement, ACLA Board Chair Curt Hanson, MD, Chief Medical Officer of Mayo Medical Laboratories said, “This lawsuit reflects our obligation to those who are providing critical testing services, and to those millions of Americans who rely on the services our industry provides.” Others supporting the lawsuit include Laboratory Corporation of America and Quest Diagnostics.
Compliance with PAMA Law’s Statutory Requirements
In the lawsuit, ACLA seeks to require HHS to comply with the statutory requirements and to set aside the provisions in the final rule, “that unlawfully exempts thousands of laboratories from the reporting obligations that Congress imposed” under PAMA. A central feature of PAMA Section 216 is that laboratories must report market rate data so that HHS can ensure that Medicare reimbursement rates closely reflect the rates laboratories receive from private payers, the lawsuit said.
“ACLA was a strong supporter of Congress’ market-based reforms, which resulted in the most extensive changes to the system for reimbursing clinical laboratories since 1984,” the lawsuit said.
In challenging the final regulations, the lawsuit said HHS disregarded and violated, “the statute’s specific, unambiguous directives requiring that all applicable laboratories report relevant data.”
Congress Specified Which Medical Laboratories Are Obligated to Report
“In imposing these requirements, Congress took care to specify which laboratories would be obligated to report market data to ensure that information would be collected from a broad, diverse group of market participants,” the lawsuit said. “Congress made clear that any ‘laboratory’ would be required to report data if, ‘with respect to its revenues under [the Medicare program], a majority of such revenues are from’ the Physician Fee Schedule or the Clinical Laboratory Fee Schedule,” the lawsuit charged.
In promulgating the regulations, however, HHS, disregarded Congress’ instructions and “unreasonably and arbitrarily exempted significant categories and large numbers of laboratories that meet the statutory definition from the reporting requirements that Congress imposed,” the lawsuit said.
“The secretary’s final rule fatally undermines one of PAMA’s purposes, which is to require a broad spectrum of Medicare-participating laboratories to report market information to the secretary. Instead, in ultra vires (Latin for “beyond the powers”) fashion, the secretary has carved out large categories of laboratories—ultimately resulting in the exclusion of some 99.3% of the laboratory market—from the statutory reporting requirements,” the lawsuit charged. Ultra vires acts fall outside the authority of the organization in question.
In the lawsuit, the ACLA claims under:
count 1: ultra vires agency action not in accordance with law, in excess of statutory authority;
count 2: unreasonable construction of statute;
count 3: violation of the Administrative Procedure Act, arbitrary and capricious action; and,
count 4: violation of the Administrative Procedure Act, injunctive and declaratory relief.
Seeking an Injunction to Have HHS Secretary to Withhold or Suspend Final Rule
In its final section, “Prayer for Relief,” the lawsuit asks the court to vacate, “any agency action found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;” to require the Secretary of HHS to comply with the statutory requirements, “including faithfully implementing the statutory definition of ‘applicable laboratory;’” and enter an “injunction that (1) directs the Secretary to withdraw or suspend his final rule until such time as it can be brought into compliance with the statute, and (2) directs the Secretary to withhold applying the new Clinical Laboratory Fee Schedule until such time as the Secretary has made appropriate revisions to his final rule.” The lawsuit also asked the court to award to the ACLA “costs and disbursements of this action and reasonable attorneys’ fees.”
—Joseph Burns
Related Information:
ACLA Files Lawsuit Challenging PAMA Rates
CMS Ignored Congressional Intent in Implementing New Clinical Lab Payment System Under PAMA, ACLA Charges in Suit
Quest Diagnostics Supports Suit Against HHS Charging That CMS Ignored Congressional Intent in Implementing New Clinical Lab Payment System
LabCorp Supports American Clinical Laboratory Association Lawsuit on PAMA Final Rule
For Top 20 Tests, CMS to Cut Payment by 28% in 2018-2020; Medicare officials move one step closer to destroying beneficiary access to lab tests: The Dark Report, October 9, 2017
Dec 11, 2017 | Coding, Billing, and Collections, Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Managed Care Contracts & Payer Reimbursement, Management & Operations
While proposals might change before the final CMS draft, lobbyists see potential for improving Medicare payment totals and structures in the upcoming 2018 outpatient rule and physician fee schedule
At this time, efforts by medical laboratories to lobby and educate Medicare officials and members of Congress about the flaws in the Medicare program’s market study of what private health insurers pay for clinical laboratory tests have failed to trigger positive action on this matter. But despite the bad news concerning that issue, there is a positive development with a proposed rule that would change which lab tests should be included in bundles paid under the Hospital Outpatient Prospective Payment System (OPPS).
The details of how the clinical laboratory industry worked to educate the right decision-makers within the federal Centers for Medicare and Medicaid Services (CMS) was part of a story published by Axios. The story described how several different healthcare specialties conducted educational and lobbying campaigns and succeeded in getting favorable decisions on the matters of concern.
Changing the Medicare 14-day Medical Lab Test Billing Schedule Regulation
Though the complete Axios article covers several categories of healthcare lobbying, “The Win for Clinical Labs” section lists lobbying activities in 2017 on behalf of the medical laboratory industry. It covers:
· “Who met with the feds: Lobbyists with lab testing companies Myriad Genetics and Veracyte, pharmaceutical company Boehringer Ingelheim, and lobbying firm Todd Strategy, federal meeting records show.
· “What they wanted: An open comment period on the ‘14-day’ regulation, likely with the goal of adjusting or eliminating it, according to a lobbying presentation.
· “The 14-day regulation stipulates that if lab tests are ordered within 14 days of a patient’s discharge from a hospital, the hospital must bill Medicare for the tests. The lab then seeks payment from the hospital. Anything after 14 days, the lab can bill Medicare directly.
· “The companies argued in the presentation that the rule limits access to lab tests because hospitals may be reluctant to bill Medicare for labs after patients leave.
· “What they got: An open comment period, and a modification to the policy that would allow labs to bill Medicare directly for some tests.”
One success slated to enter the OPPS relates to the 14-day rule/Date of Service (DOS) determinations, which set strict billing requirements for diagnostic tests based on when the tests are ordered. Medical laboratories, pharmaceutical companies, and lobbying strategists teamed up to streamline the current regulations and improve how billing works for a range of Advanced Diagnostic Laboratory Tests (ADLTs).
Lobbying participants included:
· Biodesix of Boulder, Colo.;
· Boehringer-Ingelheim of Ridgefield, Conn.;
· Guardant Health Inc. of Redwood City, Cali.;
· LUNGevity Foundation of Chicago;
· Myriad Genetics of Salt Lake City, Utah;
· Veracyte of South San Francisco.
The graphic above was taken from a May 2017 presentation to policymakers at HHS and CMS, which focused on delays created by the 14-day rule. It described existing determinations as “developed for the old world of hospital and reference laboratories.”
Presentation speakers also cited concerns that current payment requirements might limit access to testing and delay diagnosis. As precision medicine often involves major illnesses—such as cancer—swift testing, diagnosis, and treatment are essential parts of improving patient outcomes.
Results of the Lobbying Effort Could Bring Relief for Hospitals and Clinical Laboratories
CMS posted their proposed OPPS rules for 2018 in July and created an open comment period, which closed in September.
In analysis of the current proposed rules at Health Law and Policy Matters noted, “The proliferation of molecular pathology testing technology, coupled with the implementation of the packaging policy a few years ago, has strained relationships between many hospitals and laboratories.”
The analysis outlined three currently proposed approaches from CMS:
· The first crates exceptions to current DOS rules for molecular pathology tests and ADLTs under certain conditions.
· The second only applies exemptions to ADLTs citing a lack of “access to care” concerns for molecular pathology tests.
· The third adds an exception for molecular pathology tests and ADLTs excluded from OPPS packaging, but applicable to “under arrangements” rules.
Other Lobbying ‘Wins’
Axios noted two other potential wins related to this year’s lobbying efforts.
1. Fresenius Medical Care, owner of National Cardiovascular Partners, opened public debate regarding pay rates for heart procedures in outpatient heart labs and ambulatory surgery centers.
2. CMS and HHS awarded Photocure, manufacturer of Cysview (FDA-approved technology for the detection of bladder cancer), a proposal for add-on billing codes to increase pay for bladder cancer procedures using their drug solutions.
However, these are just proposals. There is no guarantee they will reach the final draft for 2018—if at all.
Lobbying Expensive but Gets Results
While lobbying is an important way to shape the regulatory landscape surrounding healthcare, it is time- and money-intensive. In the presentation from Todd Strategy, LLC, regarding the 14-day rule, the speakers established a timeline spanning two years of administration and congressional outreach. They also pointed out that similar requests were made in 2016 for the calendar year 2017 OPPS rules that were never implemented.
As healthcare continues to shift toward personalized approaches, and diagnostic testing becomes an increasingly important aspect of diagnosing and treating disease, laboratories and healthcare groups must continue to identify opportunities to both increase revenue and streamline operations to continue growing.
With innovative medical laboratory tests and new diagnostic technologies emerging at a rapid pace, the opportunity to use lobbying to educate lawmakers and government regulators continues to be a viable tool for clinical laboratories interested in speeding change and protecting the ability of clinical laboratories to serve physicians and their practices—particularly because the system is known for its complex requirements and slow-moving bureaucracy.
—Jon Stone
Related Information:
The Subtle Lobbying Wins in Medicare’s Outpatient Rule
Impact of Date of Service “14 Day” Rule on Diagnostics
Hospital Outpatient Prospective Payment – Final Rule with Comment and Final CY2017
14 Day Rule Frequently Asked Questions
CMS May Decide to Permit Labs to Bill for Certain Tests Provided to Outpatients
Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs
Your Quick Guide to Understanding the Weird 14 Day Rule (CMS Billing for Lab Tests)
Date of Service (DOS) for Clinical Laboratory and Pathology Specimens
Dec 8, 2017 | Digital Pathology, Instruments & Equipment, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory Operations, Laboratory Pathology, Laboratory Testing
Digital Therapeutics combined with clinical laboratory oversight testing could help chronic disease patients avoid surgeries and expensive drug therapies
One area of technology that has fundamentally changed the healthcare industry involves mobile devices. But those early “wellness” tools have evolved. Today’s modern mobile health devices feature software applications (apps) designed to remotely treat chronic conditions by helping modify patient behavior, as well as monitoring drug intake and physical condition biomarkers. These devices are dubbed “Digital Therapeutics,” and they present opportunities for anatomic pathology groups and clinical laboratories.
For if mobile apps are going to be used to monitor patients’ adherence to therapy—including prescription drugs—there will be a need for clinical laboratory tests that work in harmony with these apps. Otherwise, how will providers and insurers know for certain patients’ biomarkers have improved or regressed?
Massive Investments in Digital Therapeutics Companies
Today’s digital therapeutics (AKA, software for drugs) can be tailor to specific treatments of chronic conditions, such as:
· diabetes mellitus;
· cardiovascular disease;
· hypertension; and,
· chronic obstructive pulmonary disease (COPD).
Forbes states that the “future of healthcare will be app based.” That seem likely given the massive influx of capital being directed at the mobile healthcare industry.
The graphic above is taken from a 2015 report by PricewaterhouseCoopers Health Research Institute (PwC), which sourced the data from the 2014 clinician workforce and consumer surveys. Since then, the demand for mHealth products has increased exponentially. Today’s digital therapeutics market includes clinical laboratory and pathology group treatments and drug therapies. (Graphic copyright: PwC.)
The global digital therapeutics market is projected to grow to about $9 billion by 2025. That’s up from $1.7 billion last year, according to a report by Grand View Research. Driving the popularity of digital therapeutics are the benefits it affords patients, explained the report’s summary. They include:
· Continuous monitoring of vital signs;
· Medication management; and,
· Current healthcare reminders.
This is where pathologists and clinical laboratories come in. The medical laboratory can be the source for baseline blood tests before apps are used. And then, ongoing testing can determine if patients are taking drugs according to treatment guidelines and making the appropriate lifestyle changes.
Start-ups Raise Millions, Define Digital Therapeutics Space
One unique aspect of digital therapeutics is its ability to promote health improvements through behavioral changes alone. And millions are being invested in the concept.
For example, Virta Health Corp. raised $37 million in funding for an app that coaches diabetics on a diet to reverse their condition without drugs or surgery, according to MIT Technology Review.
“[Digital therapeutics] is still a fluid space that everyone is trying to categorize,” Peter Hames, co-founder and Chief Executive Officer of Big Health noted in the MIT Technology Review article. Among other programs, Big Health developed Sleepio, a sleep improvement program or insomnia app. Hames says most apps fall into two categories: “medication augmentation” or “medication replacement.”
Omada Health secured $127 million to conduct a clinical trial with Humana that investigates prediabetes, noted Forbes.
The study findings, which appeared in the Journal of Aging and Health, suggest that Omada Health’s digital behavior change program can help people to reduce chronic disease risk, noted a Humana news release.
The study involved Humana Medicare Advantage insurance members, who were enrolled in Omada Health’s Diabetes Prevention Program. The app enabled them to partake in online courses, use wireless scales, and tap other digital health tools as they worked to improve health and reduce risk of type 2 diabetes. Human coaches also were accessible.
“Few efforts have explored the feasibility and effectiveness of using technology to deliver diabetes prevention programs specifically for older adults,” the study researchers wrote.
According to the researchers:
· 501 people with average weight of 208 pounds participated;
· Hour-long lessons were made available and expected to be completed by smartphone, laptop, or tablet;
· Coaches monitored the information participants provided and their requests for counseling;
· 92% of participants completed at least nine of the 16 core online courses, which focused on topics such as changing food habits and increasing physical activities;
· People lost 7.5% of body weight after 12 months, or 13 to 14 lbs.;
· A subsample (69 individuals) who had lab tests performed improved glucose control as evidenced by a -0.14% reduction in glycosylated hemoglobin, and a decrease of -7.08 mg/dL in total cholesterol.
“These results support the clinical validity of the program with Medicare-eligible, at risk older adults. They are added evidence that chronic disease risk reduction is achievable through a variety of modalities, including digital-based programs with human coaching,” the researchers noted.
And because digital therapeutics amasses data that can be leveraged, Omada Health’s program acts as a “continuous learning system,” Sean Duffy, Omada Health’s co-founder and Chief Executive Officer, noted in Undark.
App Tracks People After Heart Attack
Johns Hopkins Medicine’s Corrie Health app is aimed at helping patients recover from heart attacks. A study at Johns Hopkins Bayview Medical Center in Baltimore explored the effectiveness of app-enabled information and resources made available to patients early in the heart attack recovery process, according to Corrie Health’s Website.
Results from the clinical study of 50 patients show no one was readmitted to hospital in the first 30 days, Undark reported.
“We can actually enroll patients who are six or seven hours out of having a stent placed in the ICU. We’re giving [the Corrie Health app] to patients when they have the time to spend watching the videos and asking questions about their medications … We’re getting them to buy-in and learn the skills while they care the most,” Francoise Marvel, MD, an internist affiliated with Johns Hopkins Bayview Medical Center, told Undark.
A Role for Medical Laboratories
So, is there a role for medical laboratories where digital therapeutics are being used? We think so. Pathologists and lab leaders may even want to reach out to venture capitalists working on mobile apps that combine adherence to therapies with medical lab tests.
As our population ages and the shortage of physicians becomes more evident, digital therapeutics may be a smart way to address select patient needs in a quality and cost-effective manner.
—Donna Marie Pocius
Related Information:
Digital Therapeutics: The Future of Health Care Will Be App-Based
Digital Therapeutics Market by Application, End User, and Segment Forecasts 2014 – 2025
Can Digital Therapeutics Be as Good as Drugs?
Digital Therapeutics Market 2017: Omada Health, WellDoc, Livongo Health, Noom Inc., 2Morow, Inc., Canary Health
Prevention Program Resulted in 7.5% Weight Loss in Humana Medicare Advantage Population
Outcomes of a Digital Health Program with Human Coaching for Diabetes Risk Reduction in a Medicare Population
Putting Digital Health Monitoring Tools to the Test
Dec 4, 2017 | Laboratory Instruments & Laboratory Equipment, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Management & Operations
It’s all about convenience and offering consumers multiple services at a single location. That’s why certain clinical laboratory tests will soon be offered at CVS Health Minute Clinics
As predicted, operators of rapid clinics located in retail pharmacies and other retail stories are adding additional clinical services. In the case of CVS Health, it recently announced plans to add certain clinical laboratory testing services to its Minute Clinic locations.
Consumer demand is driving these decisions. After all, who doesn’t want to save time and money these days? Combining errands into as few trips as possible means getting more at each location. This imperative drove big-box stores Walmart (NYSE:WMT) and Target (NYSE:TGT) to combine their household lines with grocery products all under one roof, and customers loved it!
Thus, it was no surprise when pharmacy chains got in on the act by adding rapid care clinics to retail stores that already included health and beauty products, pharmaceuticals, and limited grocery items. This important trend has been written about by Dark Daily in previous e-briefings.
Now, during a second quarter earnings call, CVS Health revealed that they plan to expand their offerings at Minute Clinic locations to include services intended to help consumers manage chronic health conditions. The move could be considered part of the same trend—providing customers with more options at each visit. However, there’s more to it. The new services aim at empowering chronic disease suffers through population health management tools. For patients and caregivers of chronic disease patients, this could be quite beneficial.
But how will this impact medical laboratories and pathology groups, when patients realize they can employ tools that monitor their chronic conditions at convenient locations where they can likely fulfill other needs as well? Might this impinge on revenues from tests and specimen gathering procedures traditionally performed at clinical laboratories?
Demand for Low-Cost Quality Care Driving Growth in Retail Clinics
There are currently more than 1,100 Minute Clinics located inside CVS stores in 33 states and the District of Columbia. Headquartered in Woonsocket, R.I., CVS expects an escalation in the need for their Minute Clinic services due to:
· A shortage of primary care physicians;
· An increase in chronic diseases; and
· The aging US population.
CVS Health’s initial service offerings will help diabetes patients:
· Monitor glucose levels;
· Adhere to medication schedules, and,
· Modify their lifestyles through education.
During the next two years, CVS plans to add similar services at their Minute Clinic locations for other chronic conditions, including:
· Asthma;
· Depression;
· Hypercholesterolemia (high cholesterol); and,
· Hypertension.
The Minute Clinics operate seven days a week, with half of their patients seen in the evenings and weekends—times when most traditional medical offices are closed. CVS Health plans to open an additional 150 Minute Clinic locations within the next year.
Patients waiting to be seen by nurse practitioner Marti Wolfson (right) at a Minute Clinic in La Mesa, CA. CVS announced that it will introduce certain clinical laboratory testing services to its chain of rapid care clinics located in CVS retail pharmacies. (Photo copyright: San Diego Union Tribune/John Gastaldo.)
According to a report from the Robert Wood Johnson Foundation and Manatt Health Solutions, there are more than 1,800 retail clinics in the United States and CVS Minute Clinics hold more than 50% of the market. Access to walk-in appointments, convenience, extended hours of service, lower costs, and having no primary source of care are the most common reasons given by people who utilize services at the clinics.
“Patients are looking for easy access to care, good quality, and low cost,” Andrew Sussman, President, Minute Clinic, told the Boston Globe. “That’s part of what’s making us so successful.”
Retail clinics account for 10.5 million healthcare visits annually, which represent about 2% of primary care encounters in the country. The number of retail clinics in the US increased by 900% between 2006 and 2014 and is expected to continue to climb.
According to AMN Healthcare research, the most common reasons for visits to the clinics include:
· Diagnosis and treatment of new illnesses and symptoms;
· Vaccinations;
· Prescription renewals; and,
· Basic health screenings.
Other major players in the retail clinic industry include Walgreens Healthcare Clinic, Kroger Little Clinic, Walmart Retail Clinic, and Rite Aid RediClinic.
VA Now Referring Vets to Retail Clinics in Phoenix Area
In April, CVS Health, the Department of Veterans Affairs (VA), and TriWest Healthcare Alliance joined forces to improve access to health services for veterans in the Phoenix area. This initiative allows healthcare professionals at the Phoenix VA to refer veterans to Minute Clinic for minor health conditions.
“This new public-private collaboration between CVS, TriWest, and the VA is an important step forward in enhancing choice and flexibility in veterans’ healthcare,” Senator John McCain noted in a CVS Health press release. “I’ve long believed that veterans in need of routine healthcare services should not have to wait in line for weeks to get an appointment when they can visit community health centers like Minute Clinic to receive timely and convenient care.”
Because of this collaboration, 120,000 veterans living in the Phoenix area may now receive care, when appropriate, at the 24 Minute Clinic locations in the metropolitan area.
“Our number one priority is getting veterans access to care when and where they need it. The launch of this partnership will enable VA to provide more care for veterans in their neighborhoods,” stated Baligh Yehia, MD, MPP, MSc, in the CVS Health press release. Yehia is Senior Medical Director at Johns Hopkins Medicine, and Deputy Undersecretary for Health at the US Department of Veterans Affairs.
As retail clinics become more popular a growing number of medical laboratory test samples that traditionally came from office-based physicians may originate from these clinics. Clinical laboratory outreach, physician support, and patient education programs have never been more critical.
—JP Schlingman
Related Information:
CVS Expanding Minute Clinic Chronic Disease Programs
Phoenix VA Healthcare System, TriWest, and CVS Health Partner to Increase Veteran Access to Healthcare Services
CVS Health (CVS) Q2 2017 Results – Earnings Call Transcript
The Value Proposition of Retail Clinics
Convenient Care: Growth and Staffing Trends in Urgent Care and Retail Medicine
Walk-in Clinics Force Big Medicine to Rethink
Five Reasons Why Retail Clinics Are a “Game-Changing” Threat to Traditional Healthcare Providers That Could Strain Clinical Laboratories and Pathologists
Retail Clinics Are Poised to Offer More Health Services, Participate in ACOS, and Offer Expanded Menu of Clinical Pathology Laboratory Tests
Nov 29, 2017 | Coding, Billing, and Collections, Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Sales and Marketing, Laboratory Testing, Management & Operations
Medical laboratories today struggle to submit clean claims and be promptly and adequately reimbursed as health insurers institute burdensome requirements and audit more labs
Across the nation, clinical laboratories and anatomic pathology groups of all sizes struggle to get payment for lab test claims. Veteran lab executives say they cannot remember any time in the past when medical laboratories were challenged on the front-end with getting lab test claims paid while also dealing on the back-end with ever-tougher audits and unprecedented recoupment demands.
These issues center upon the new policies adopted by the Medicare program and private health insurers that make it more difficult for many clinical laboratories to be in-network providers, to obtain favorable coverage guidelines for their tests, and to have the documentation requested when auditors show up to inspect lab test claims. This is true whether the audit is conducted by a Medicare Recovery Audit Contractor (RAC) or a team from a private health insurer.
Source of Financial Pressure on Medical Laboratories in US
Another source of financial pressure on medical laboratories in the United States today is the ongoing increase in the number of patients who have high-deductible health plans—whether from their employer or from the Affordable Care Act’s Health Insurance Marketplace (AKA, health exchanges). The individual and family annual deductibles for these plans typically start at around $5,000 and go to $10,000 or more. Many labs are experiencing big increases in patient bad debt because they don’t have the capability to collect payment from patients when they show up in patient service centers (PSCs) to provide specimens.
Some of these developments make it timely to ask the question: Is it a trend for payers to gang up on clinical laboratories and pathology groups and make it tougher for them to be paid for the lab tests they perform? Multiple factors can be identified to support this thesis.
“Is it a coincidence that, in recent years, so many payers are initiating numerous requirements that add complexity to how labs submit claims for lab tests and how they get paid?” asked Richard Faherty of RLF Consulting LLC. Faherty was formerly Executive Vice President, Administration, with BioReference Laboratories, Inc. “I can track four distinct developments that, collectively, mean that fewer lab claims get paid, expose clinical laboratories to extremely rigorous audits with larger recoupment demands, and heighten the risk of fraud and abuse allegations due to use of contract or third-party sales and marketing representatives who represent independent medical lab companies.”
Faherty described the first of his four developments as prior-authorization requirements for molecular and genetic tests. “Health insurers are reacting to the explosion in molecular and genetic testing—both in the number of unique assays that a doctor can order and the volume of orders for these often-expensive tests—by establishing stringent prior-authorization requirements,” he noted.
More Prior-Authorization Requirements for Molecular, Genetic Tests
“At the moment, many clinical lab companies and pathology groups are attempting to understand the prior-authorization programs established by Anthem (which became effective on July 1) and UnitedHealthcare (which became effective on November 1),” explained Faherty. “Just these two prior-authorization programs now cover as many as 80 million beneficiaries. There are plenty of complaints from physicians and lab companies because the systems payers require them to use are not well-designed and quite time-consuming.
“One consequence is that many lab executives complain that they are not getting paid for genetic tests because their client physicians are unable to get the necessary prior authorization—yet the lab decides to perform the test to support good patient care even though it knows it won’t be paid.”
Richard Faherty (left), CEO, RLF Consulting LLC, and formerly with Bio-Reference Laboratories, Inc., will moderate this critical webinar. Joining him will be Rina Wolf (center), Vice President, Commercialization Strategies, Consulting and Industry Affairs, XIFIN, Inc., and Karen S. Lovitch (right), JD, Practice Leader, Health Law Practice, Mintz Levin, PC, Washington, DC. The webinar takes place Wednesday, December 6, 2017, at 2 p.m. EST; 1 p.m. CST; 12 p.m. MST; 11 a.m. PST. Click here to register. (Photo copyright: Dark Intelligence Group.)
Payers Checking on How Clinical Laboratories Bill, Collect from Patients
Faherty’s second trend involves how medical lab companies are billing and collecting the amounts due from patients. “Most payers now pay close attention to how clinical laboratories bill patients for co-pays, deductibles, and other out-of-pocket amounts that are required by the patients’ health plans,” he commented. “Labs struggle with this for two reasons.
“One reason is the fact that tens of millions of Americans currently have high-deductible health insurance plans,” said Faherty. “In these cases, medical laboratories often must collect 100% of the cost of lab testing directly from the patients. The second reason is the failure of many independent lab companies to properly and diligently balance-bill their patients. This puts these labs at risk of multiple fraud and abuse issues.”
Many Medical Lab Companies Undergoing More Rigorous Audits by Payers
Faherty considers trend number three to be payers’ expanding use of rigorous audits of lab test claims. “In the past, it was relatively uncommon for a clinical lab company or pathology group to undergo audits of their lab test claims,” he observed. “That has changed in a dramatic way. Today, the Medicare program has increased the number of private auditors that visit labs to inspect lab test claims. At the same time, private health insurers are ramping up the number and intensity of the audits they conduct of lab test claims and substantially increasing their demands for recoupment without audit.
“One consequence of these audits is that medical laboratories are being hit with substantial claims for recoupment,” noted Faherty. “I am aware of multiple genetic testing companies that have been hit with a Medicare recoupment amount equal to two or three years of the lab’s annual revenue. Some have filed bankruptcy because the appeals process can take three to four years.”
Are Contract Lab Sales Reps More Likely to Offer Physicians Inducements?
Faherty’s fourth significant trend involves the greater use of independent contractors that handle lab test sales and marketing for clinical lab companies. “This trend affects both labs that use third-party lab sales reps and labs that don’t,” he said. “Labs that use contract sales and marketing representatives do not have direct control over the sales practices of these contractors. There is ample evidence that some independent lab sales contractors are willing to pay inducements to physicians in exchange for their lab test referrals.
“This is a problem in two dimensions,” noted Faherty. “On one hand, clinical lab companies that use third-party sales contractors don’t have full control over the marketing practices of these sales representatives. Yet, if federal and state prosecutors can show violations of anti-kickback and self-referral laws, then the lab company is equally liable. In certain cases, government attorneys have even gone after executives on a personal basis.
“On the other hand, I am hearing lab executives complain now that a substantial number of office-based physicians are so used to various forms of inducement offered by third-party sales representatives that the lab’s in-house sales force cannot convince those physicians to use their lab company without a comparable inducement. If true, this is a fundamental shift in the competitive market for lab testing services and it puts labs unwilling to pay similar inducements to physicians at a disadvantage.”
These four trends describe the challenges faced by every clinical laboratory, hospital laboratory outreach program, and pathology group when attempting to provide lab testing services to office-based physicians in a fully-compliant manner and be paid adequately and on time by health insurers.
Why Some Labs Continue to Be Successful and What They Can Teach You
These four trends may also explain why many medical lab companies are dealing with falling revenue and encountering financial difficulty. However, there continue to be independent lab companies that have consistent success with their coding, billing, and collections effort. These labs put extra effort into aligning their business practices with the requirements of the Medicare program and private health insurers.
To help pathologists and managers running clinical laboratory companies, hospital lab outreach programs, and pathology groups improve collected revenue from lab test claims and to improve lab compliance, Pathology Webinars, LLC, is presenting a timely webinar, titled, “How to Prepare Your Lab for 2018: Essential Insights into New Payer Challenges with Lab Audits, Patient Billing, Out-of-Network Claims, and Heightened Scrutiny of Lab Sales Practices.” It takes place on Wednesday, December 6, 2017 at 2:00 PM EDT.
Three esteemed experts in the field will provide you with the inside scoop on the best responses and actions your clinical lab and pathology group can take to address these major changes and unwelcome developments. Presenting will be:
· Rina Wolf, Vice President, Commercialization Strategies, Consulting and Industry Affairs, XIFIN, Inc. in San Diego; and,
· Karen S. Lovitch, JD, Practice Leader, Health Law Practice, Mintz Levin, PC, in Washington, DC;
· Moderating will be Richard Faherty of RLF Consulting LLC, and formerly with Bio-Reference Laboratories, Inc.
Special Webinar with Insights on How Your Lab Can Collect the Money It’s Due
To register for the webinar and see details about the topics to be discussed, use this link (or copy and paste this URL into your browser: http://pathologywebinars.com/how-to-prepare-your-lab-for-2018-essential-insights-into-new-payer-challenges-with-lab-audits-patient-billing-out-of-network-claims-and-heightened-scrutiny-of-lab-sales-practices/).
This is an essential webinar for any pathologist or lab manager wanting to improve collected revenue from lab test claims and to improve lab compliance. During the webinar, any single idea or action your lab can take away could result in increasing collected revenue by tens of thousands even hundreds of thousands of dollars. That makes this webinar the smartest investment you can make for your lab’s legal and billing/collection teams.
—Michael McBride
Related Information:
How to Prepare Your Lab for 2018: Essential Insights into New Payer Challenges with Lab Audits, Patient Billing, Out-of-Network Claims, and Heightened Scrutiny of Lab Sales Practices
Risk, Compliance, Pay—A Juggling Act for Labs
Continued ‘Aggressive Audit Tactics’ by Private Payers and Government Regulators Following 2018 Medicare Part B Price Cuts Will Strain Profitability of Clinical Laboratories, Pathology Groups
Threats to Profitability Causing Clinical Laboratories, Pathology Groups to Take on Added Risk by Entering into ‘Problematic’ Business Relationships and Risky Pricing Plans
Payers Hit Medical Laboratories with More and Tougher Audits: Why Even Highly-Compliant Clinical Labs and Pathology Groups Are at Risk of Unexpected Recoupment Demands
‘Death by 1,000 Knives’ Could Be in Store for Clinical Laboratories, Pathology Groups Not Prepared to Comply with New Medicare Part B Regulations
Nov 27, 2017 | Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Management & Operations, News From Dark Daily
November workshop to teach Clinical Lab 2.0 to forward-thinkers among clinical laboratories, IVD manufacturers, and lab IT vendors offered many examples where clinical laboratory diagnostics can add value and improve patient outcomes
DATELINE: ALBUQUERQUE, New Mexico—Here in this mile-high city, a special Project Santa Fe Workshop devoted to teaching the principles of Clinical Lab 2.0 attracted an impressive roster of innovators and forward-thinkers in clinical laboratory medicine. In attendance were leaders from a select number of the nation’s first-rank health systems and hospitals, along with executives from In Vitro diagnostics (IVD) manufacturers, lab IT companies, other lab service companies, attendees from the Centers for Disease Control and Prevention, and from institutions in Canada, Germany, Israel, India, and the UK.
Their common goal was to learn more about the emerging clinical and business model for medical laboratories known as “Clinical Lab 2.0.” A key objective of the workshop was to help those lab leaders in attendance develop strategic action plans for their own lab organizations, so as to take advantage of the insights coming from the vast information streams generated by their clinical laboratories. These services would be in support the evolving needs of health systems, hospitals physicians, and health insurers to more effectively provide integrated patient-centered clinical care.
Medical Laboratories Can Use Clinical Lab 2.0 as a Path to Adding Value
Clinical Lab 2.0 is the clinical and business model of the future for medical laboratories, assert the developers of this concept. “Clinical Lab 2.0 describes the attributes needed by all medical laboratories that want to succeed in a healthcare system organized to provide precision medicine, keep people out of hospitals, and where providers—including labs—are reimbursed based on the value they provide,” stated Khosrow Shotorbani, CEO of TriCore Reference Laboratories, one of the organizers of the Project Santa Fe Clinical Lab 2.0 Workshop.
“Clinical Lab 2.0 is the path medical labs will need to follow if they are to continue providing relevant lab testing services and generate the reimbursement necessary for them to maintain a high level of clinical excellence and financial stability going forward,” he added. “This is the next generation of medical laboratory organization and operation.”
Lab 1.0 Was Lab Clinical/Business Model for 50 Years
For more than 50 years, Clinical Lab 1.0 was the model for labs,” noted James Crawford, MD, PhD, Executive Director and Senior Vice President of Laboratory Services at Northwell Health Laboratories and an organizer of the Project Santa Fe Clinical Lab 2.0 Workshop. “Lab 1.0 is transactional, focusing on generating high quality analytical data on specimens received, but without assembling these data into integrative clinical care programs. In the simplest sense, Clinical Lab 1.0 focused on generating ever-greater numbers of specimens to drive down average cost-per-test, while maximizing revenue in a fee-for-service system.
This chart shows the attributes of Clinical Lab 1.0 and compares those to the attributes of Clinical Lab 2.0. Lab 1.0 is transactional and based on increasing test volume to lower costs and maximize fee-for-service revenue. Clinical Lab 2.0 is integrative in ways that add value to lab testing services. (Graphic copyright Project Santa Fe.)
“But fee-for-service payment is going away,” he said. “Increasingly, clinical laboratories will be paid based on the value they provide. This payment can be in the form of bundled reimbursement, as a per-member-per-month payment, or as a share of the budgeted payment made to a health system, an accountable care organization (ACO), or a multispecialty provider network. As these alternative forms of provider payment become dominant, to earn a fair share of reimbursement, all medical laboratories will need a clinical strategy to deliver lab testing services that measurably contribute to improved patient outcomes while reducing the overall cost of care. This requires looking at medical laboratories’ contribution to effective delivery of the full dollar of the healthcare spend, not just the three-cents-on-the-dollar representing laboratory testing.”
Innovators in Clinical Laboratory Industry Identify New Ways to Add Value
There are already a handful of innovative clinical laboratory organizations that have clinical experience in moving past the Lab 1.0 paradigm of reporting an accurate test result within the accepted turnaround time. Leaders within these labs are collaborating with physicians and frontline care givers specifically to help them better utilize lab tests in ways that directly improve the speed and accuracy of the overall diagnostic sequence, as well as achieving therapeutic optimization as rapidly as possible. These collaborations are tracking the improvement in patient outcomes while demonstrating how better use of lab tests can lower the total cost per episode of care.
During the Clinical Lab 2.0 workshop, case studies were presented demonstrating how clinical laboratory leaders are taking the first steps to practice Clinical Lab 2.0 so as to achieve added value with medical laboratory tests. The case studies included:
· A project to improve diagnosis and treatment of sepsis at Geisinger Health System.
· A project at Henry Ford Health to collaborate with physicians to more appropriately utilize lab tests and build consensus in support of a new lab test formulary.
· A multi-hospital initiative at Northwell Health to collaborate with physicians and nurses in the use of creating testing to make earlier, more accurate diagnoses of acute kidney injury during inpatient admissions, and better guide decisions to treat.
· A partnership involving TriCore Reference Laboratory and certain health insurers in New Mexico where the laboratory—using lab test data (some generated by emergency room testing) and other clinical data—alerts the insurers to women who are pregnant, thus allowing the insurers to provide timely guidance to the women’s care teams with the goal of improving prenatal care.
The Project Santa Fe Clinical Lab 2.0 Workshop convened on November 13-14 in Albuquerque, N.M. A broad spectrum of innovative professionals from the five Project Santa Fe member laboratories (above) were there to teach the lessons learned from their first successful efforts to collaborate with physicians and create added value from medical laboratory diagnostics. Other attendees included progressive lab leaders from several of the nation’s most prominent health systems, along with thought leaders from the IVD, lab software, and lab association sectors. (Photo copyright Project Santa Fe.)
Project Santa Fe Workshop: A Well-Attended Lab ‘Think Tank’
Participants attending the Clinical Lab 2.0 workshop included hospital lab administrators, pathologists, and clinical laboratory industry executives. The importance of this workshop is reflected in the educational grants and financial support provided by leading in vitro diagnostics manufacturers, lab IT companies, and other lab industry vendors. The lab industry vendors included:
· Abbott Laboratories
· ARUP Laboratories
· Beckman Coulter
· DiaSorin
· MedSpeed
· Roche Diagnostics
· Siemens Healthineers
· Sysmex
Also providing educational grants and similar support were:
· American Clinical Laboratory Association
· CAP Today
· Centers for Disease Control and Prevention
· Mayo Medical Laboratories
· The Dark Report
Project Santa Fe was launched in 2016 by clinical lab leaders from five of the nation’s most respected integrated health systems:
· TriCore Reference Laboratories;
· Henry Ford Health;
· Geisinger Health;
· Kaiser Permanente Northern California; and,
· Northwell Health.
Described as a think-tank venture, the organizers are committed to implementing projects that demonstrate how lab tests can be used in ways that add value, and then publish the resulting projects, along with data about improved patient outcomes and reductions in healthcare costs, in peer-reviewed journals. Multi-institutional studies will be required to validate the findings and outcomes from the added-value clinical collaborations initiated at the different medical laboratory organizations participating in Project Santa Fe.
Another primary goal is to share the lessons learned from these innovative projects with other like-minded pathologists, lab administrators, and lab managers. In May, Project Santa Fe organizers led a one-day workshop to teach Clinical Lab 2.0 at the Executive War College on Laboratory and Pathology Management. The workshop in Albuquerque on November 13-14 was the second learning opportunity available to medical laboratory professionals. A November 2018 workshop is planned.
—Robert L. Michel
Related Information:
Project Santa Fe Workshop
Improving American Healthcare through “Clinical Lab 2.0”: A Project Santa Fe Report
Laboratory 2.0: Changing the Conversation
CEO Describes Characteristics of the Clinical Lab 2.0 Model: Five Health System Labs Using Project Santa Fe To Demonstrate Value
Moving to Clinical Lab 2.0: Deliver More Value! Get Paid More Dollars!
Lab Innovators Advocate Need for Clinical Lab 2.0: Lab 1.0 Is the Low-Paid Commodity Lab, While Lab 2.0 Gets Paid More for the Value It Contributes
Using the Laboratory Value Pyramid and Clinical Lab 2.0 to Position Your Lab to Add Value in the Era of Population Health, Precision Medicine, and Value-Based Payment
