News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups
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Clinical Laboratories and Pathology Groups
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Federal Programs That Lower Hospital Readmissions Rates Impact Medical Laboratories Inpatient Test Ordering

Jun 23, 2017 | Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Management & Operations

Medical laboratory inpatient test volume may continue to decline as the Medicare hospital readmission reduction program expands in 2017 and state population health programs garner funding

 We are now several years into the Medicare program that is designed to reduce hospital readmissions. Statistics from these years show encouraging progress in reducing the readmission rate of Medicare patients. This is a trend that has important implications for all hospital-based clinical laboratories.

Hospitals are the most expensive site of care in the entire healthcare system. In its ongoing battle to reduce healthcare costs, the Centers for Medicare and Medicaid Services (CMS) implemented a carrot-and-stick program called the Hospital Readmission Reduction Program (HRRP) aimed at lowering hospital readmission rates nationwide.

Established in 2013 by the Affordable Care Act (also known as Obamacare), the HRRP lowers reimbursements to acute care hospitals that have high rates of Medicare readmissions within 30 days of initial discharge, and increases reimbursements to hospitals that lower their readmission rates, a March 2017 Kaiser Family Foundation (KFF) Issue Brief explained.

And, according to the KFF, these programs are having an impact. Readmission rates dropped by 8% nationwide as hospitals found ways to avoid the stiff financial penalties and earn the financial rewards. Additionally, patients are increasingly choosing ambulatory care settings, or to receive care at home, rather than re-entering hospitals. This has lowered states’ readmission rates even further.

From a healthcare cost perspective, this is good news. However, these programs have had unintentional consequences as well. The federal initiatives and state population health programs responsible for lowering readmission rates also directly impact medical laboratories by simultaneously reducing the flow of inpatient testing volume.

At the same time, clinicians at the nation’s hospitals—in their efforts to avoid readmissions—have a motive to become more effective at ordering the right medical laboratory test at the right time, and to use the lab test results to more effectively treat the patient. Thus, for the nation’s hospital labs, the Medicare program to reduce readmissions has both an upside and a downside.

Programs, Data Mining That Help Providers Avoid Readmissions

Hospitals nationwide are operating programs aimed at attracting federal financial rewards for keeping people healthy, and from being admitted to hospitals due to conditions that could have been prevented, USA Today reported.

One such program involves Christiana Care Health System (Christiana Care) of Wilmington, DE. Christiana Care implemented CMS’ Care Link transitions program through the Center for Medicare and Medicaid Innovation (CMMI), also known as The Innovation Center, which, “supports the development and testing of innovative healthcare payment and service delivery models.”

The provider experienced a 20% drop in patients being readmitted within 30 days of surgery, due to its “bundled payment” plan for heart failure, the USA Today article noted. Hip and knee replacement readmissions were down 25% 30 days after discharge as well.

“Without the funding we got through CMMI, it’s hard to imagine we’d be in the position we’re in today,” stated Janice Nevin, MD, CEO of Christiana Care.

Janice Nevin, MD

Janice Nevin, MD (above), CEO of Christiana Care Health System, Wilmington, DE, is concerned that the upcoming changes to the ACA will affect the funding the healthcare provider has received from the CMS Innovation Center. “I would strongly urge that we keep the commitment to CMMI (because) you have to innovate to learn,” she told USA Today. (Photo copyright: Christiana Care Health System.)

Changes to HRRP for Dual-Eligibles Could Affect Penalties

Some patients are more expensive than others. Patients who draw both Medicare and Medicaid funding simultaneously, for example. These “dual-eligibles” are disproportionately expensive for hospitals to treat, reported Modern Healthcare.

In fact, they are just 18% of CMS beneficiaries, but accounted for one-third of all Medicare fee-for-service (FFS) spending in 2013, according to a Medicare Payment Advisory Commission June 2016 demographic report.

CMS is proposing to adjust penalties in the HRRP to reflect the proportion of patients who are dual-eligible, presumably hoping the change will both lower costs and reduce penalties on healthcare providers.

Hospital Readmissions Data from 49 States

CMS data show that between 2010 and 2015 hospital readmission rates fell by 8%, reported Healthcare Finance News. Other key data recently released by CMS and reported by Healthcare Finance News:

·       49 states reduced avoidable hospital readmission rates since 2010;

·       Vermont’s readmission rate rose slightly from 15.3% in 2010 to 15.4% in 2015;

·       In 43 states, readmission rates fell by more than 5%;

·       11 states had a more than 10% drop in readmission rates;

·       The fall in readmission rate translates to about 104,000 hospital readmissions avoided for Medicare beneficiaries in 2015 and 565,000 readmissions averted since 2010; and

·       Avoidable admissions, occurring within 30 days of initial discharges, account for more than $17 billion in Medicare annual expenditures.

Action Steps for Clinical Laboratories

Pathologists and lab leaders need to efficiently work with colleagues, especially when caring for hospitalized patients with conditions relative to the HRRP. Clear and patient-friendly discharge instructions for diagnostics are important. And, the lab’s coordination with post-acute-care providers, such as skilled nursing facilities, on follow-up testing is key to avoiding unnecessary readmissions.

Regardless, medical laboratory inpatient test volume will likely continue to decline. As Dark Daily readers know, the decline in inpatient testing is associated with more than just the HRRP. The transition to new models of integrated care that has taken place over the last few years is also a factor, as Dark Daily reported in “Falling Inpatient Revenues at Many Hospitals is Sign of Healthcare’s Transition to New Models of Integrated Care and Changes in Medical Laboratory Test Utilization.”

Medical laboratory directors and sales teams are advised to continue their efforts at boosting outpatient volume to fill the inpatient void.

—Donna Marie Pocius

Related Information:

Hospitals Work to Keep Patients from Being Admitted

Aiming for Fewer Hospital U-Turns: The Medicare Hospital Readmission Reduction Program

49 States, DC Reduce Avoidable Hospital Readmissions

Dual-eligibles: The Next Target in Hospital Readmissions Penalties

June 2016 Data Book, Section 2: Medicare Beneficiary Demographics

Hospitals Mine Clinical Data to Help Reduce Costs and Avoid Readmissions, Creating Opportunities for Clinical Laboratories and Pathologists to Contribute to Improved Patient Outcomes

Falling Inpatient Revenues at Many Hospitals is Sign of Healthcare’s Transition to New Models of Integrated Care and Changes in Medical Laboratory Test Utilization

Bundled Payments for Joint Replacements Cuts Costs for Medicare; Hospitals Held Accountable for Quality of Care

May 19, 2017 | Compliance, Legal, and Malpractice, Laboratory Operations, Laboratory Pathology, Managed Care Contracts & Payer Reimbursement

Clinical laboratories must stay informed about the success of bundled-payment initiatives because they will need to negotiate a share of these payments where medical laboratory testing is involved

Research published this year concluded that bundled payments for joint replacement services performed on Medicare patients reduce Medicare’s costs without negatively affecting patient outcomes. Because these types of surgeries do not generally utilize many lab tests, the question is still out as to whether bundled payments allow clinical laboratories to be adequately reimbursed for their services.

The study of the bundled payment program was published in the Journal of the American Medical Association (JAMA). The researchers sought to determine the cause of the reduction in Medicare payments and hospital savings when bundled payment models for joint replacement surgeries were used.

The research was performed by staff at the Perelman School of Medicine at the University of Pennsylvania (UPenn). They examined hospital costs and Medicare claims for patients requiring hip and knee replacements at the 5-hospital Baptist Health System (BHS) in San Antonio.  (more…)

Even as Patient Satisfaction Surveys Grow in Importance, Hospitals, Physicians, and Clinical Laboratories Struggle to Use That Data to Improve the Patient Experience

Feb 24, 2017 | Laboratory Management and Operations, Laboratory News, Laboratory Pathology, Laboratory Testing

Experts point to the challenges: not only is there a lack of consensus in how to best measure patient satisfaction, but there are also different opinions as to what are the right steps providers should take to improve the patient experience

In today’s healthcare industry, “Patient Satisfaction” is high on the list of phrases likely to be heard in any medical facility, including in pathology groups and clinical laboratories. With recent and ongoing changes to the way that providers are paid, patient satisfaction as a measure of quality will only gain in importance.

But if there is consensus that it is important to monitor patient satisfaction and use that data to guide efforts to improve how patients view their care, there is certainly no consensus on the most effective ways to measure patient satisfaction. Nor is there much consensus on how providers, including medical laboratories, should use patient satisfaction data to improve the patient experience.

This challenge is addressed by Deirdre Mylod, PhD, who pointed out in a PatientEngagementHIT article, “The exercise is not to make consumers happy. The exercise is to reduce patient suffering.” Mylod is Executive Director of the Institute for Innovation, a nonprofit research collaborative that publishes relevant and practical findings concerning patient satisfaction that help healthcare organizations deliver better care. (more…)

Pathologists and Clinical Laboratories to Play Critical Role in Developing New Tools to Fight Antibiotic Resistance

Feb 10, 2017 | Digital Pathology, Instruments & Equipment, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing

Medical laboratories to become antimicrobial stewards in the fight against antibiotic resistance

At the start of 2017, new requirements for antimicrobial stewardship programs became effective for hospitals and other providers that must accredit to the standards of Medicare Conditions of Participation (COP) and The Joint Commission. Clinical laboratories serving hospitals are already engaged in efforts to improve the use of antibiotics in ways that slow the growth of antibiotic-resistant strains of infectious agents.

Even as the nation’s hospitals embark on efforts to implement effective antimicrobial stewardship programs, researchers continue to seek solutions to the same problem. They are following several paths to combat the growing resistance certain pathogens have to antibiotics. In particular, two approaches are interesting for pathologists and medical laboratory personnel. One involves understanding the processes that lead to antibiotic resistance. The other is to identify useful biomarkers associated with specific strains of pathogens. (more…)

Nation’s Smaller Community Medical Laboratories Have Major Concerns about Financial Survival Once Medicare Officials Implement Deep Price Cuts to Lab Test Fees in 2018

Feb 8, 2017 | Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Pathology, Laboratory Testing

In vitro diagnostic manufacturers and medical distributors share concerns, along with other types of medical labs in nation’s small cities and hinterlands that include rural hospital labs and physician office labs (POLs) because, along with financial erosion, there is the potential of reduced access by Medicare beneficiaries to clinical lab tests where they live

SAN ANTONIO, TEXAS—Owners and managers of community and regional independent lab companies and community laboratories gathered here last week at a lab conference to assess what many believe is a bleak future. That’s because, in less than 11 months, medical laboratories across the United States will be dealing with unprecedented price cuts to the Medicare Part B clinical laboratory fee schedule (CLFS) and how those price cuts erode the financial stability of these essential labs, often the only local medical laboratory serving smaller communities and rural areas throughout the nation.

The number one financial threat of concern to these community and regional lab owners is how the Protecting Access to Medicare Act (PAMA) rule for private-payer market-price reporting will be used by the Centers for Medicare and Medicaid Services (CMS) to make fee cuts—effective on January 1, 2018—that will be financially devastating to the nation’s small and mid-sized community and regional labs, rural hospitals, some individual and group physician practices, and community hospitals—while causing increased market concentration that benefits the nation’s two dominant publicly-traded lab companies. (more…)

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