Sep 14, 2009 | Laboratory Pathology, Managed Care Contracts & Payer Reimbursement
As health insurers build patient-friendly web sites, they now want all the lab test data
For laboratories wanting to contract with managed care plans, it will soon be “all about the data.” In upcoming contract renewal talks, expect health insurers to have a keen interest in working specifically with those clinical laboratories and pathology groups which can interface and electronically provide lab test data.
Dark Daily is first to identify this important development. It creates an opportunity for local laboratories to contribute added value to payers in their region. There is a specific reason for this increased interest. Health insurers are building information-rich Web sites for their insured beneficiaries. It is now important for them to have laboratory test data that they can use to populate the digital health record of their beneficiaries.
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Sep 2, 2009 | Laboratory News, Laboratory Pathology, Managed Care Contracts & Payer Reimbursement
Labtests succeeds Sonic’s DML as the primary lab test provider in Auckland area
One of the world’s most interest experiments in government contracting for clinical laboratory testing services is unfolding in Auckland, New Zealand. Next Monday, September 7, Labtests will assume full responsibility for testing approximately 12,000 patients per day in a brand-new laboratory facility that has only conducted testing on a limited basis since August 10, 2008.
On that same day, Diagnostic Medlab’s (DML) existing contract with the District Health Boards in greater Auckland will terminate. Earlier, on August 18, DML’s parent company, Sonic Healthcare Ltd. (ASX:SHL) of Sydney, Australia, announced plans to shutter DML’s laboratory facility and write-off its Auckland-based business division.
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Aug 8, 2008 | Laboratory Pathology, Managed Care Contracts & Payer Reimbursement
Many Dark Daily readers remember “Marcus Welby, M.D.” This popular TV show ran from 1969 to 1976 and starred actor Robert Young in the role of Marcus Welby, M.D. His sidekick was assistant Steven Kiley, M.D. (played by James Brolin). Dr. Welby was the dedicated family practice physician who treated patients as individuals in an age of specialized medicine and uncaring doctors.
Now, there is a movement among physicians to return to the caring compassion displayed by Marcus Welby, M.D. These physicians are endorsing a new model of patient care known as the “medical home.” The medical home is gaining momentum nationwide as an alternative to the current system of jumbled provider networks, says the Association of American Medical Colleges (AAMC). In addition to the AAMC, such organization as the American Academy of Family Physicians, the American Academy of Pediatrics, the American College of Physicians, and the American Osteopathic Association, are promoting the concept of the medical home.
The AAMC defines the medical home as one that: 1) includes an ongoing relationship between a provider and patient; 2) provides around-the-clock access to medical consultation; 3) respects a patient’s cultural and religious beliefs; 4) provides a comprehensive approach to care; and, 4) coordinates care through providers and community services.
The medical home model puts the emphasis on primary care. It changes reimbursement to physicians so that they have an incentive to promote the early detection of illness and active intervention. This is similar to a major effort by the United Kingdom’s National Health Service (NHS). In recent years, the NHS has shifted funds away from acute and specialist care at the hospital trusts and transferred those funds to primary care trusts. In this way, the NHS has made primary care physicians responsible for early diagnosis, as well as pro-active management of patient care.
On July 21, USA Today reported that, here in the United States, individual states, the federal government, and private insurers are experimenting with ways to pay primary care physicians more money to oversee and coordinate patients’ care. The federal Centers for Medicare & Medicaid Services plans a demonstration project in 2010 to test whether paying primary care doctors more per month to treat patients with chronic illnesses in medical home settings results in better care and lower costs, compared with traditional clinical practices. The Tax Relief and Health Care Act of 2006 (TRHCA) mandates a demonstration in as many as eight states. This demonstration project will provide targeted, accessible, continuous, and coordinated family-centered care to Medicare beneficiaries who are deemed to be high need (that is, with multiple chronic or prolonged illnesses that require regular medical monitoring, advising or treatment.)
If the patient-centered medical home concept gains support, it could mean that clinical laboratories will see a greater demand for near-patient and point-of-care testing capabilities. That’s because, as caregivers visit patients in various settings, including patients’ homes, caregivers will want both fast access to lab test results and the ability to view those test results remotely.
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Jun 7, 2007 | Laboratory News, Managed Care Contracts & Payer Reimbursement
Laboratory Corporation of America (NYSE: LH) announced yesterday that it had executed a multi-year clinical laboratory services contract renewal with CIGNA HealthCare (NYSE: CI). An important facet of the renewal, noted in LabCorp’s press release, is that “LabCorp will no longer be contractually restricted from marketing that the Company is a fully participating, in-network provider to CIGNA HealthCare for all services in all major markets.”
“This agreement is important because we will no longer be prohibited from marketing to doctors and patients that we are a participating, in-network provider to all CIGNA HealthCare members and plans in all major markets,” said David P. King, President and Chief Executive Officer of LabCorp. “We welcome the opportunity to compete for CIGNA HealthCare business on a level playing field with all other contracted laboratories. Of course, CIGNA HealthCare’s participating physicians may continue to send all of their work to LabCorp, giving choice to those physicians who prefer using a single high-quality, full-service laboratory.”
What Dark Daily finds notable about this contract renewal is that it is not exclusive to LabCorp, so Quest Diagnostics Incorporated (NYSE: DGX) continues to be a provider for CIGNA HealthCare. CIGNA HealthCare membership grew by 3% in 2006, to 9.4 million beneficiaries. It is experiencing rapid growth in consumer-directed healthcare plans (CDHPs), with enrollment in CDHPS growing from 100,000 members in 2005 to over 250,000 in 2006, according to Cigna’s 2006 Annual Report. Cigna is also greatly expanding its membership outside of the United States. This is another example of how healthcare is globalizing.
This is also the first time since last fall that a national health insurer, when renewing national contracts for laboratory services, has not entered into an exclusive agreement with one laboratory company. In October 2006, United Healthcare (NYSE: UNH) granted an exclusive national contract to LabCorp. In May of this year Aetna (NYSE: AET) selected Quest Diagnostics to be its exclusive national laboratory provider. At the end of 2006, UnitedHealth and Aetna had 26 million and 15.4 million members, respectively.
Related Articles from Dark Daily:
LabCorp Ousted from Aetna’s National Contract
Judging the UnitedHealth Decision to Drop Quest Diagnostics in Favor of LabCorp
United Health Disrupts the National Contract Status Quo Between the Two Blood Brothers
May 23, 2007 | Managed Care Contracts & Payer Reimbursement
Faced with spiraling costs and funding gaps, state Medicaid programs continue to be a breeding ground for innovation. The latest clever attempt to reform Medicaid comes from Tennessee, where Governor Phil Bredesen created a new “mini-medical” health insurance plan called CoverTN to meet the needs of the Tennessee’s uninsured. Unlike Medicaid innovators in other states who are looking at replacing universal coverage with plans that provide people with protection against catastrophic costs, CoverTN covers only a maximum of $25,000 for health expenses annually, and only $15,000 of that can go to hospital bills.
Governor Bredesen went to the uninsured, blue-collar workers of Tennessee and found “They weren’t interested in buying insurance for catastrophic costs. They wanted access to the emergency room next month, access to the pharmacy next month. Let’s give people what they want instead of what some advocate says they want,” said Bredesen. His plan offers coverage to some of the uninsured without making them pay a significant amount upfront. The program makes only a small dent in the state budget.
CoverTN is open initially to businesses with fewer than 25 workers that haven’t offered health benefits in at least six months. Many of these businesses were forced to cut back or eliminate health care benefits when their cost reached $300 or $400 per month per employee. CoverTN premiums are split three ways, with the employee, the employer, and the state with each paying between $34 and $99 a month. Extra costs apply for smokers and the obese.
BlueCross BlueShield of Tennessee administers the CoverTN plan. Participants have access to a network of doctors and hospitals assembled by BlueCross BlueShield. Response to CoverTN from the medical community has been positive, with 89 of Tennessee’s 138 hospitals and 10,000 of the states 17,000 doctors participating in the CoverTN network.
Stan Roberts, health practice director of Milliman, Inc, a Seattle-based consulting and actuarial firm, estimates that less than 2% of enrollees will exceed the $25,000 annual cap. Unfortunately, those people could account for a third of overall medical spending among enrollees due to catastrophic claims. The overall implication, however, is that this plan will meet the needs and pay the bills of most enrollees.
Because enrollment in the CoverTN plan is aimed at individuals who are currently uninsured, hospitals and laboratories providing both emergency and routine care are likely to benefit. Before the Cover TN plan was instituted, it was common for hospitals or laboratories to treat uninsured as charity. Now, a large portion of their medical bills for CoverTN beneficiaries will be covered. For routine care, a laboratory can expect all its fees to be covered, leaving little or no balance to be collected from the patient.
The CoverTN plan stands to benefit both the uninsured of Tennessee and the medical community. It provides another example of how innovations in the design and function of health insurance plans can provide beneficiaries with affordable coverage, and keep larger numbers of people participating in the insurance pool. What remains to be seen is whether innovative health programs like CoverTN want to drive down provider reimbursement through the use of exclusive provider networks, or whether they adopt an “any willing provider” policy. Most clinical laboratories and pathology group practices would support the concept of open provider networks.
Related Articles:
State Watch | Wall Street Journal Examines New Tennessee Health Insurance Program
Business owners look over CoverTN
Rush on to sign up for CoverTn
BlueCross BlueShield Of Tennessee Awarded CoverTN Contract
Apr 19, 2007 | Laboratory Pathology, Managed Care Contracts & Payer Reimbursement, Management & Operations
Health Savings Accounts (HSAs) are on the rise in the United States. According to a fact sheet from the White House this month, “The number of Americans with HSAs has tripled from one million in March 2005 to the more than three million reported in January 2006. The number of Americans with HSAs is currently projected to increase to 29 million by 2010.” These accounts consist of a contribution made by an employer to an employee’s tax-free savings account. The HSA is combined with a high-deductible insurance policy ($1,000 to $5,000) to help people pay pre-deductible expenses.
People with HSAs love the accounts because they can use the money in their account for over-the-counter medications, massage therapy, lasik eye surgery, and other “elective” medical procedures. When a real emergency does arise, however, HSA account holders often find their account under-funded and have trouble paying their medical bills.
Because payment in the HSA scenario is the responsibility of the patient and not the patient’s insurance company, providers of all types need to get in the habit of collecting from the patient at the time the service is rendered —or even before it is rendered (in the case of routine procedures with predictable costs). The days of billing patients in the weeks following a procedure are coming to an end. Unlike post-service claims with health insurance companies, patients are far less likely to respond to an after-the-fact bill.
The upside to collecting for patients with HSA accounts at the time of service is that most HSA account holders have a debit card connected directly to their account which they can use to pay their medical provider. Therefore, if they have the money in their account, they will usually be amenable to paying at the time of service.
The HSA insurance model creates new payment for pathology group practices, because there is no direct contact with the patient. So how can a pathology practice prepare to deal with patients covered by HSA insurance plans? First, when HSA patients come into a patient service center to provide specimens, it is a good proactive measure to notify them in writing that they will be responsible for payment at the time the tests are done. Second, office staff must be trained to know the different types of insurance policies and to know that HSA patients must provide payment at the time of the test. They should have the knowledge needed to help HSA account holders realize that they can use their HSA debit card to pay.
Finally, both clinical laboratories and pathology groups must be prepared to deal with the new type of patient-consumer that has an HSA account. These patient-consumers will look at medical services like retail commodities. They will balance cost and quality in making a decision on which medical facility, laboratory, or physician to use. For this reason, laboratories must develop patient-friendly price schedules for all laboratory services. These should be competitive with the cost of services offered at comparable laboratories. HSA-insured patients are likely to seek out laboratories with prices that match or beat competitor’s prices. Adapting to HSA account holders will require a significant effort by laboratories. However, the drastic reduction in lag time between services rendered and payment received lower the patient default rate. In the long run, that should make laboratories more profitable.
Related Information:
HSAs: A new paradigm in payment and collections
Fact Sheet: Health Savings Accounts: Affordable and Accessible Health Care
