Jun 18, 2018 | Laboratory Hiring & Human Resources, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Managed Care Contracts & Payer Reimbursement, Management & Operations
Clinical laboratories will want to develop value-based lab testing services as the nation’s largest health insurers prepare to engage with Medicare Advantage patients in record numbers
UnitedHealth Group (UNH), the nation’s largest health insurer, forecasts wildly impressive growth of Medicare Advantage plans and value-based care. If this happens, it would further shrink the proportion of fee-for-service payments to providers, including medical laboratories.
Changes to how clinical laboratories and anatomic pathology groups in America get paid have been the subject of many Dark Daily briefings—such as, “Attention Anatomic Pathologists: Do You Know Medicare Is Prepared to Change How You Are Paid, Beginning on January 1, 2017?” August 22, 2016—and many others since then.
Switching to a value-based care reimbursement system, administered through Medicare Quality Payment Programs (QPPs), is one of the more disruptive changes to hit physicians, including pathologists. And, given UnitedHealthcare’s predictions, healthcare system adoption of QPPs will likely accelerate and continue to impact clinical laboratory revenue.
50% of All Americans in Value-based Care Systems by 2028
UnitedHealth Group also envisions more than 50% of seniors enrolled in Medicare Advantage plans within five to 10 years, up by 33% over current enrollments, Healthcare Finance reported.
“Where it can go, hard to tell, but I don’t think it’s unreasonable to think about something north of 40% and approaching 50%. It doesn’t seem like an unreasonable idea,” said Steve Nelson, CEO, UnitedHealthcare, a division of UnitedHealth Group, during the earnings call.
In light of UNH’s widely-publicized comments, clinical labs should consider:
- Preparing strategies to reduce dependence on fee-for-service payments;
- Developing diagnostic services that add value in value-based reimbursement arrangements.
For labs, more seniors in Medicare Advantage plans means fewer patients with Medicare Part B benefits, which cover tests in a fee-for-service style. In contrast, Medicare Advantage plans are marketed to seniors by companies that contract with Medicare. These insurance companies typically restrict their provider network to favor clinical laboratories that offer them the best value.
Why Insurers Like Medicare Advantage Plans
UnitedHealth Group is not the only insurer anticipating big changes in the Medicare Advantage market. Humana (NYSE:HUM) of Louisville, Ky., is reallocating some services from Affordable Care Act health insurance exchange plans to the Medicare Advantage side of the business, Healthcare Dive reported.
According to a Kaiser Family Foundation (KFF) report, these insurers are ranked by number of enrollees in Medicare Advantage plans:
- UnitedHealthcare—24%;
- Humana—17%;
- Blue Cross Blue Shield affiliates—13%.
Healthcare Dive noted that, in a volatile healthcare industry, payers seem to prefer the stability and following benefits of Medicare Advantage plans:
- Market potential, as evidenced by growing elderly population;
- Good retention rate of Medicare Advantage customers; and
- Favorable payments by the Centers for Medicare and Medicaid Services (CMS) to the insurers.
Cleveland Clinic Makes Deals with Humana, Blue Cross Blue Shield
Last year, Cleveland Clinic and Humana announced creation of two Medicare Advantage health plans with no monthly premiums or charges for patients to see primary care doctors, and no need for referrals to in-network specialists, according to a joint Humana-Cleveland Clinic news release.
And, along with Anthem Blue Cross and Blue Shield in Ohio, Cleveland Clinic also launched Anthem MediBlue Prime Select, a Medicare Advantage HMO plan with no monthly premium, a news release announced. For most of their care needs, members access Cleveland Clinic hospitals and physicians.
Control Costs as Medicare Advantage Plans Grows
These examples highlight the necessity for clinical laboratories to prepare as the Medicare Advantage program expands and accompanying networks narrow.
“Medicare Advantage plans will result in more pressure on providers [such as clinical laboratories] and hospitals to focus on the cost of care,” said Michael Abrams, Managing Partner at Numerof and Associates, told Healthcare Dive.
With an exploding elderly population, medical laboratories should analyze what the shift to value-based care and Medicare Advantage plans may mean for their revenues.
—Donna Marie Pocius
Related Information:
UnitedHealth Group’s David Wichmann on Quarter1 2018 Results, Earnings Call Transcript
UnitedHealth Group Grows First Quarter Profits Driven by Medicare Advantage
Medicare Advantage Will Have More Enrollment, Lower Premiums in 2018
Payers are Flocking to the Medicare Advantage Market
Medicare Advantage 2017 Spotlight on Enrollment Market Update Issue Brief
Medicare Advantage Benefits
UnitedHealth Group Predicts 50% of Seniors Will Choose Medicare Advantage
Medicare Advantage Plans Keep Growing
Cleveland Clinic and Humana Create Two New Zero Premium Medicare Advantage Plans
Anthem Blue Cross Blue Shield Ohio Collaborate to Deliver Integrated Care
Attention Anatomic Pathologists: Do You Know Medicare Is Prepared to Change How You Are Paid, Beginning on January 1, 2017?
May 18, 2018 | Laboratory News, Laboratory Operations, Laboratory Pathology, Managed Care Contracts & Payer Reimbursement
From reduced medical laboratory test ordering to dealing with high-deductible health plans (HDHPs), clinical laboratories and anatomic pathology groups are impacted daily by rising healthcare costs. Until now, however, one demographic was not affected—affluent Americans. But that is no longer the case.
According to Bloomberg, thousands of people—some earning more than $125,000 a year—are now foregoing health insurance altogether and instead choosing concierge medicine because it costs less.
“We’re not poor people, but we can’t afford health insurance,” Mimi Owens, a resident of Harahan, La., told Bloomberg.
Priced Out of the Market
Bloomberg also reported on a Marion, N. C., family whose monthly insurance premium of $1,691 in 2017—triple their house mortgage payment—was increasing to $1,813 in 2018. The couple, who had no children and an income of $127,000 from a small IT business plus a physical therapy job, had a $5,000 deductible. However, their total annual insurance investment after premiums was about $30,000, and that was before any healthcare claims.
They decided, instead, to purchase care through a membership in a physician practice.
“Self-employed people are being priced out of the market,” Donna Harper, an insurance agent in Crystal Lake, Ill., told Fierce Healthcare. The self-employed business owner reportedly had to cancel her Blue Cross Blue Shield (BCBS) plan because the premiums totaled $11,000 annually with a $6,000 per year deductible.
“I haven’t been in the hospital for 40 years, so I’m going to roll the dice,” she stated.
Increasingly, this is the choice many people with higher incomes are making and it is impacting both the healthcare and health plan industries.
Huge Deductibles, Skyrocketing Premiums!
Regardless of whether people purchase their health coverage through the Affordable Care Act (ACA) Health Exchanges or their employers, deductibles can be as high as $5,000/year for individuals and $10,000/year for family coverage, or more.
And, in 2017, annual premiums for workers averaged $18,764, a Kaiser Employer Survey reported.
According to CNN Money, ACA premiums for silver plans in 2018 were 37% higher than the previous year, and the average increase for all health exchange plans since 2017 was 24% nationwide.
And, while financial assistance is available, people making more than 400% over the Federal Poverty Level will not qualify for premium subsidies from the ACA, according to HealthCare.gov.
Lots of “Essential” Services, But Narrow Networks
Critics of the ACA point out that one of the reasons Health Exchange plans are so expensive is because every plan is required to have “essential health benefits” that many enrollees to not need or want. For example, a childless couple in their 50s has to pay for an ACA plan that includes services such as maternity, newborn, and pediatric care.
Another cause for sky rocketing costs are the ACA’s limited number of health plans in many regions. In fact, according to Bloomberg, half of the counties in the US—which together cover 30% of all Americans—have just one insurance company available to the Health Exchange customers.
Uninsured Rate Edges Up in 2017
So, it may come as no surprise that after declining over recent years, the uninsured rate noted at 2017 year-end actually increased by 1.3%, which translates to 3.2-million Americans, a Gallup and Sharecare analysis found (see image below).
That report attributes the uptick in the uninsured population, the largest since ACA’s start, to:
- Health insurance companies pulling out of the ACA exchanges;
- Costs for remaining insurance plans too high for consumers to bear; and,
- Those Americans who earn too much for federal subsidies opting to go without health insurance.
Concierge Care Instead of Health Insurance
Many people do not have health insurance, but that does not mean they are without healthcare. For example, the N.C. couple named in the Bloomberg article decided to pay $198 a month (instead of the $1,813 annual premium) for private membership (AKA, concierge care) in a doctor’s office practice. The fee gives them unlimited office visits, discounts on prescription drugs, and lab tests.
The Detroit News, in its report on the launch of University of Michigan Medicine’s Victors Care in April, called membership-based practice programs a “revolutionary shift in medicine.” Victors Care plans, which start at $225 a month, reportedly give people unlimited office visits. (See Dark Daily, “Some Hospitals Launch Concierge Care Clinics to Raise Revenue, Generating both Controversy and Opportunity for Medical Laboratories,” April 23, 2018.)
And HealthLeaders Media noted that about 34% of medical practices surveyed indicated that within three years they may add a membership-based payment model.
Dr. James Mumper, MD (left), founder and chief medical officer of PartnerMD, a concierge care practice in Richmond, Va., treats Howard Cobb (right), who has been Mumper’s patient for 14 years. (Photo copyright: Richmond Magazine/Jay Paul.)
For the doctor’s part, concierge medicine has appeal. Physician want to spend more time with their patients and have fewer patients, noted the Richmond Times-Dispatch.
“So much of being a good primary care physician is listening and having time to listen,” stated Jim Mumper, MD, Chief Medical Officer, PartnerMD, a concierge medical practice he helped start in Richmond, Va. “This model allows the physicians to do the things that cause them to want to go to medical school and do all the training and all the sleepless nights—to feel at the end of the day that they’ve really helped a lot of people.”
Clearly, the healthcare and health insurance industries are under enormous pressure to address rising costs and evolve to better business models. Clinical laboratories are necessarily along for that ride, and in many ways, must be ready to react quickly to changes coming from both marketplaces.
—Donna Marie Pocius
Related Information:
Why Some Americans are Risking It and Skipping Health Insurance
Plans with More Restrictive Networks Comprise 73% of Exchange Market
Millions More Americans Were Uninsured in 2017
2017 Employer Health Benefits Survey
Premiums for the Benchmark Silver Obamacare Plan Will Soar 37%, on Average, for 2018, According to Federal Data
US Uninsured Rate at 12.2% in Fourth Quarter 2017
University of Michigan Fuels Debate on Retainer-Based Health Care
34% of Medical Practice Models Considering Membership Practice Models
A Different Kind of Practice
Back to the Future of Healthcare with A Higher Price Tag: Concierge Medicine Offers Patients Unique Care
Some Hospitals Launch Concierge Care Clinics to Raise Revenue, Generating both Controversy and Opportunity for Medical Laboratories
Apr 16, 2018 | Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Managed Care Contracts & Payer Reimbursement, Management & Operations
Recent studies exploring the economics behind the high price of US healthcare independently point to the price of labor, goods, services, administrative costs, and pharmaceuticals as primary reason why the US spends almost twice as much as peer countries on healthcare
It is regularly reported that the cost of healthcare in the United States is notably more expensive that in most developed nations. Overutilization of medical services in this country is often given as a reason why this is true. But the findings of a new research study suggest that the reason healthcare in the US is expensive is not due to overutilization. Rather, it is because of the much higher prices American patients pay for services, including clinical laboratory testing.
This recent study contradicts the claims of some experts who say overutilization is to blame for the high cost of healthcare in the United States. The research was conducted by researchers at the Institute for Health Metrics and Evaluation (IHME) in Seattle and the UCLA David Geffen School of Medicine. They attribute the overarching factor in high healthcare costs not to high utilization of services—such as clinical laboratory and anatomic pathology testing—or increased rates of illness.
Instead, the researchers found that it’s simply a matter of higher prices for healthcare delivered in this nation, compared to other healthcare systems around the globe. This is what makes America’s healthcare system so expensive. And, lacking financial incentives for stakeholders to lower prices, these researchers suggest that continued high costs could negatively impact providers’ quality of care.
High Cost of Diagnostic Services, including Medical Laboratory Testing
The IHME/UCLA researchers published their findings in the Journal of the American Medical Association (JAMA), in which they argued that increases in US healthcare cost are independent of increases in:
- Disease prevalence;
- US population age;
- Use of healthcare services; or,
- Overall population size.
Joseph L. Dieleman, PhD, Assistant Professor at IHME and lead researcher on the investigation, stated, “After adjustments for price inflation, annual healthcare spending on inpatient, ambulatory, retail pharmaceutical, nursing facility, emergency department, and dental care increased by $933.5 billion between 1996 and 2013—from $1.2 trillion to $2.1 trillion.”
Data produced by the study identified one overlying factor in increased spending—increased prices. According to Dieleman, health spending in 2015 “reached $3.2 trillion and constituted 17.8% of the US economy.”
In an editorial response to Dieleman’s investigation, also published in JAMA, Patrick H. Conway, MD, MSc (above), President and CEO of Blue Cross Blue Shield of North Carolina in Durham, stated that “the United States is on an unsustainable growth path in terms of healthcare costs and must get costs under control.” He added that data from Dieleman’s study has important implications for quality of healthcare, which may include medical laboratory diagnostics. (Photo copyright: Duke University.)
Price Spirals and Artificial Price Hikes: No Real Incentive for Regulation
Pricing for medical care is notoriously opaque. Patients are often unaware of the cost of services until the bill arrives. This lack of transparency prevents patients from comparing prices between healthcare providers and medical laboratories.
To try and create some cost transparency for consumers, Conway noted that some states, such as Maryland and Vermont, have adopted multi-payer payment models or all-payer rate settings. However, there could be resistance to such reforms, according to some experts.
Health economist Austin Frakt, PhD; and Aaron E. Carroll, MD, MS, Vice Chair for Health Policy and Outcomes Research, and Director of the Center for Health Policy and Professionalism Research at Indiana University School of Medicine, co-authored a New York Times article that agrees with Conway’s assertion. In it, they state that attempts to create regulation for healthcare prices “would be met with resistance from all those who directly benefit from high prices, including physicians, hospitals, pharmaceutical companies—and pretty much every other provider of healthcare in the United States.”
No Incentive to Lower the Prices of Medical Services
An opinion piece in the Wall Street Journal, Keith Lemer, CEO, WellNet Healthcare Group, shared a similar view. He stating that insurers and preferred provider organizations (PPOs) have no “natural incentive to keep provider prices down.” Lemer looks at the Affordable Care Act and its establishment of a medical loss ratio rule, which “requires insurers covering individuals and small businesses to spend at least 80 cents of every premium dollar on medical expenses.”
Lemer uses the cost of a routine blood test as an example, stating that when providers raise costs of such tests, “insurers can charge higher premiums, while also boosting the value of their 20% share,” which goes “towards administrative costs and profits.”
Lemer argues that the deck is stacked against consumers, and that the medical loss ratio “encourages insurers to ignore providers” artificial price hikes,” while attracting customers “with the promise of steep discounts through their PPO plans.” The resulting affect is what Lemer calls a “price spiral” that’s difficult to escape.
Higher Costs Do Not Equate to Better Care
A special JAMA communication from Irene Papanicolas, PhD, and other members of the Department of Health Policy and Management, Harvard T. H. Chan School of Public Health, Harvard Global Health Institute, and Department of Health Policy at the London School of Economics and Political Science, reports that higher US costs do not coincide with better care.
In comparison to 10 other high-income countries the US spends “approximately twice as much,” Papanicolas noted. She added that despite the higher spending in the US, the nation “performs poorly in areas such as healthcare coverage and health outcomes.”
To illustrate the difference in average costs, Papanicolas and colleagues listed “comparison prices” on a series of healthcare services between countries in 2013. For example, the price of a single computed tomography (CT) scan varies widely:
- $896 (US);
- $97 (Canada);
- $279 (Netherlands); and,
- $500 (Australia).
The high prices of clinical laboratory (AKA, pathology laboratory in Australia) diagnostics have already caused a sharp decline in the use of important imaging utilization and are at risk of affecting other aspects of clinical pathology, such as anatomic pathology (histopathology in AU) services.
PricewaterhouseCoopers (PwC) Health Research Institute’s annual medical cost report predicts 2018 medical costs will rise by 6.5% and that “price continues to be a major driver of healthcare costs” that are outpacing the economy. PwC recommends “increasing collaboration across the industry” to address the growing issue of rising medical costs and shift the burden of cost away from patients.
Clinical Laboratories Contribute to High Costs
Although US healthcare cost is a topic of intense conversation, little change may come if there is no incentive to change. Each of the recent JAMA published articles ends on the same repeated note: a plea for active debate among policy makers, healthcare providers, patients, insurers, and politicians, with the goal of decreasing healthcare costs, without sacrificing patient care.
This is also true for clinical laboratory and anatomic pathology stakeholders, which are critical aspects of the healthcare continuum, and therefore, contribute to the overall financial burden on healthcare consumers.
— Amanda Warren
Related Information:
Why the US Spends So Much More Than Other Nations on Healthcare
Healthcare Spending in the United States and Other High-Income Countries
Factors Associated with Increases in US Healthcare Spending, 1996-2013
Factors Associated with Increased US Healthcare Spending: Implications for Controlling Healthcare Costs (Editorial Response)
The Best Healthcare System in the World: Which One Would You Pick?
The Deception Behind Those In-Network Health ‘Discounts’
Medical Cost Trend: Behind the Numbers 2018
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
Nov 1, 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
Medical laboratory leaders and pathologists must be fully aware of the coming legal and regulatory changes taking place starting January 1, 2018, or risk fines and decreased reimbursements
January 1, 2018, marks the start of new Medicare Part B price cuts for clinical laboratory and anatomic pathology testing. But decreasing reimbursement rates is just one issue facing medical laboratory leaders. The other is the increasingly rigorous regulatory environment poised to ensnare labs and pathology groups unprepared to navigate the dark waters of government compliance.
Tougher payer audits, higher recovery demands, and enforcement policies that increase the personal liability of CLIA lab directors and lab executives, are reasons why attorney David W. Gee, JD, a Partner at Davis Wright Tremaine LLP in Seattle, argues that laboratories need to step up their focus on compliance and due diligence. He notes laboratories must guard against “death by 1,000 knives” in this new landscape.
Insufficient Focus on Compliance Brings Consequences to Clinical Laboratories and Their Management
“There are more and more people and agencies whose focus it is to regulate and watch the dollars and make sure there is integrity in the system,” noted Gee in an interview with Dark Daily. “That includes not only the formerly regular players—the OIG [Office of Inspector General, US Department of Health and Human Services] and DOJ [Department of Justice]—but you’ve got an increasing number of states with their own False Claims Acts. You’ve got state agencies looking at opportunities to clean up the system and to tag along with other investigations going on, as well as commercial payers who have become more active in pursuing litigation and other measures against practices they allege to be fraudulent.”
Faced with these emerging trends, Gee stresses that labs must:
1. Recognize the increased personal liability facing lab directors, owners, and management, and take steps to mitigate risk of enforcement actions that not only expose executives to potential penalties but also jeopardize the financial health of lab organizations.
2. Understand the importance of meaningful and sustained investment in compliance (including providing compliance officers with the resources to manage an increasingly complex job) and leverage OIG guidance to assess gaps and risks in compliance programs.
3. Be aware of risks inherent in third-party marketing agreements, which can result in short-term spikes in order volume, but which also could reduce “lines of sight” to clients, making it even more difficult to adhere to compliance standards.
Gee believes the emphasis labs place on cost control and “running lean” often results in a lack of attention being paid to compliance. He argues today’s competitive environment increases the need for laboratory directors to ensure proper business practices are followed and “compliance fundamentals are not overlooked in the haste to compete for the business of referral sources.”
Healthcare attorney and Partner, David W. Gee, JD, of Davis Wright Tremaine, LLP, in Seattle will be one of three featured speakers during a new Dark Daily webinar on the Medicare Part B price cuts, and the critical legal and compliance issues clinical laboratories and pathology groups face starting in 2018. (Photo copyright: Davis Wright Tremaine, LLP.)
CLIA-Lab Directors to Be Held Personally Liable for Compliance Failures
Because federal regulators are considering holding CLIA-lab directors personally liable for compliance failures, Gee suggests laboratory executives should be motivated to put effective compliance programs in place.
“The best reason I can give for insisting as a lab director that the company actually has a successful and effective compliance program is that these days they stand to lose,” he argues. “The ability to prove you are not complicit—and that you are not the driver of things that have gone wrong—comes down to having an effective and well-documented compliance program so you are on record. And so there’s evidence that, as an engaged lab leader, you tried to do the right thing.”
Educational Opportunities for Lab Leaders
To help medical laboratory and pathology group leaders prepare for the perils they face, and take proactive steps to navigate the tough lab regulations and legal issues that lay ahead, click here to register for Dark Daily’s upcoming webinar “Tougher Lab Regulations and New Legal Issues in 2018: More Frequent Payer Audits, Problems with Contract Sales Reps, Increased Liability for CLIA Lab Directors, Proficiency Testing Violations, and More,” (or place this link into your browser: https://ddaily.wpengine.com/product/tougher-lab-regulations-and-new-legal-issues-in-2018-more-frequent-payer-audits-problems-with-contract-sales-reps-increased-liability-for-clia-lab-directors-proficiency-testing-violations-and).
This crucial learning event takes place on Wednesday, November 8, 2017, at 1 p.m. EST. Gee will be joined by Jeffrey J. Sherrin, President and Partner, O’Connell and Aronowitz in Albany, New York, and Richard Cooper, Chair, National Healthcare Practice Group, McDonald Hopkins, LLC, in Cleveland.
These three attorneys are among the nation’s foremost experts in issues unique to clinical laboratories, pathology groups, hospital labs, toxicology/pharmacogenomics labs, and molecular/genetic testing labs. Following our speakers’ presentations, there will be a question and answer period, during which you can submit your own specific questions to our experts.
You can’t afford to miss this opportunity. Click here to get up to speed on the most serious regulatory, compliance, and managed care contracting issues confronting all labs today. This webinar will provide solutions to the perils facing labs now and in 2018 by helping you map a proactive and effective course of action for your clinical lab or pathology group.
—Andrea Downing Peck
Related Information:
Tougher Lab Regulations and New Legal Issues in 2018: More Frequent Payer Audits, Problems with Contract Sales Reps, Increased Liability for CLIA Lab Directors, Proficiency Testing Violations, and More
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
Nation’s Most Vulnerable Clinical Laboratories Fear Financial Failure If Medicare Officials Cut Part B Lab Fees Using PAMA Market Price Data Final Rule
Oct 23, 2017 | Laboratory News, Laboratory Pathology, Managed Care Contracts & Payer Reimbursement
Push to expand the reach of health savings plans should help consumers pay for out-of-pocket medical laboratory services and other healthcare expenses
High-deductible health plans (HDHPs) continue to impact hospitals, clinical laboratories, and anatomic pathology groups due to the strain they put on healthcare consumers who struggle to pay their medical bills. Even worse, studies show patients are skipping doctor visits and scheduled medical laboratory tests to avoid paying the full costs of the visits. That’s why the market for Health Savings Accounts (HSAs) has grown in popularity. HSAs enable patients to take control of their healthcare and plan for the inevitable bills.
And grown it has! As of June 30, there were more than 21 million HSAs in the United States, with holdings of about $43 billion in assets. That’s according to a survey by Devenir, a healthcare account investment advisory and research firm. By the end of 2019, Devenir projects the HSA market will exceed $60 billion in assets held in nearly 30 million accounts.
This steep growth curve in HSA accounts is good news for medical laboratories and pathology groups because it indicates consumers are taking advantage of these tax-advantaged savings accounts to set aside funds needed to pay their high-deductible health bills.
HSAs Help Both Patients and Provider, including Medical Laboratories
According to the survey Devenir conducted in July 2017, which primarily reflected data from the largest 100 HSA providers, the typical HSA investment account holder has a $15,146 average total balance in deposits and investments.
“We continue to see impressive HSA growth, especially amongst those HSA assets held in investments as consumers begin to understand how HSAs can help them save for both their current and future healthcare expenses,” noted Jon Robb, Devenir Senior Vice President of Research and Technology, in a statement.
HSAs were authorized by the Medicare Prescription Drug Improvement and Modernization Act of 2003 and entered the market in January 2004. Ever since the major provisions of the Affordable Care Act (ACA) came into play in 2014, HSA accounts have grown significantly in size and popularity, as have HDHPs. From 2015 to 2016, HSA accounts recorded a 22% increase in assets year over year, Devenir reported.
HSAs Could Double Under American Health Care Act
Under current law, HSA accounts must be paired with an HDHP. For 2017, the IRS has defined “high deductible” as any deductible higher than $1,300 for an individual or $2,600 for a family, so a health insurance plan must meet that threshold for a consumer to qualify for an HSA. In addition, annual contributions are capped at $3,400 individuals or $6,750 for families. Those over 55 can contribute an extra $1,000.
Devenir’s study, which drew on data from the period ending June 30, 2017, illustrates the steep growth in HSAs since 2006, and projects the growth to continue well into the decade. (Image copyright: Devenir.)
But a boom in HSA accounts may be on the horizon if Republicans succeed in replacing Obamacare. Provisions of the GOP-backed American Health Care Act (AHCA), which stalled this summer after passing by a narrow vote in the House of Representatives, would nearly double HSA contribution limits and introduce other changes that would spur growth.
“Whatever direction healthcare reform goes, it is clear that the HSA will be a key component of consumers’ financial decisions in healthcare,” wrote Steve Christenson, Executive Vice President at Ascensus, in 401K Specialist. “After all, HSAs and HDHPs were market-driven prior to the enactment of the ACA and continued to be with its passage. The economy will continue to drive this trend as employers seek to attract and retain employees in this tight job market.”
HSA contributions can be invested and grow tax free as long as withdrawals are used for qualified medical expenses. Because accounts move with healthcare consumers if they change jobs or insurers, HSAs are viewed as excellent investment options.
“HSAs offer tax breaks no other retirement vehicle can match,” stated Begonya Klumb, CEO of UMB Financial Corporation Healthcare Services, in a CNBC interview.
HSAs Great Opportunity for Elderly to Control Their Healthcare
Even if Republicans fail to revamp healthcare, HSA industry leaders are expected to continue to look for ways to expand into additional markets. According to a Kaiser Health News article, companies that manage HSA accounts are “eager to reach new markets, including baby boomers in Medicare and enrollees in the military’s Tricare system, for whom—under current law—HSAs are off-limits.”
Eric Remjeske, President and co-founder of Devenir, believes those over 65 would seize upon an opportunity to use an HSA account to help offset Medicare’s cost sharing expenses.
“That is a great population that has the potential to save and really take more control over their healthcare,” Remjeske told Kaiser Health News.
Industry officials are confident HSAs will continue their upward trajectory, attracting new customers and additional healthcare dollars.
“The political and economic winds are favorable and most definitely pushing HSAs,” Kevin Robertson, Senior Vice President and Chief Revenue Officer for HSA Bank, the industry’s third-largest company, told Kaiser Health News.
What’s good for the HSA industry also may prove to be good for medical laboratories. If more healthcare consumers turn to HSAs to pay their out-of-pocket medical costs, including clinical laboratory services, the fear that increased enrollment in high-deductible plans will cause a reduction in the utilization of clinical lab tests may prove to be unfounded.
—Andrea Downing Peck
Related Information:
Health Savings Account Assets Reach 42.7 Billion in June
2016 Year-End Devenir HSA Research Report
What Health Care Confusion Means for HSA’s Future
Health Savings Accounts Are the Big Winner as Republicans Hash Out an Obamacare Replacement
Companies Behind Health Savings Plans Could Bank on Big Profits Under GOP Plan
Hospitals, Pathology Groups, Clinical Labs Struggling to Collect Payments from Patients with High-Deductible Health Plans
Growth in High Deductible Health Plans Cause Savvy Clinical Labs and Pathology Groups to Collect Full Payment at Time of Service
Because of Expanded Numbers of Patients with High-deductible Health Plans, Patients Are Now Responsible for 30% of Hospital Revenues
Health Savings Accounts Change Collection Model for Doctors, Soon Pathologists
