Tag: Fee-for-service

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Fee-for-service has long been the primary payment model for clinical laboratories and pathology groups. Fee-for-service (FFS) is a payment model in which services are paid for as itemized in the provider’s invoice. It gives an incentive for physicians to provide more treatments because payment is dependent on the quantity of care, rather than quality of care. Similarly, patients are incentivized to welcome any medical service that might not be necessary. Insurance companies shield themselves against ruin by setting cover limits for every beneficiary.

FFS raises costs, discourages the efficiencies of integrated care, and a variety of reform efforts have been attempted, recommended, or initiated to reduce its influence (such as moving towards bundled payments and capitation).

Medicare Parts A (hospital insurance) and B (optional insurance that covers physician, outpatient hospital, home health, laboratory tests, durable medical equipment, designated therapy, outpatient prescription drugs, and other services not covered by Part A) are FFS programs. Medicare processes over one billion FFS claims per year.

As part of the ongoing drive to cut healthcare costs, this model is gradually being phased out by payers and healthcare organizations in favor of value-based payment models, such as pay-for-performance programs and accountable care organizations that are intended to cap costs and spread financial risk among providers, while encouraging coordination of care, disease prevention and better management of chronic conditions. This is seen as a threat to the survival of clinical labs, which expect to see far fewer tests ordered by healthcare providers.

The Clinical Laboratory Management Association is working to help labs navigate these changes. “As fee-for-service reimbursement gives way to bundled reimbursement and per-member-per-month payment, labs will only be successful if they add value to physicians by helping them diagnose disease earlier and more accurately,” says CLMA President Paul Epner.

CLMA has named this program “Increasing Clinical Effectiveness,” or ICE. THE DARK REPORT is one of CLMA’s partners in this effort.

“Our hope is that ICE is a catalyst that helps lab administrators, pathologists, and medical laboratory scientists broaden the focus of their laboratory beyond operational efficiency to include measurable impact on positive patient outcomes,” says Epner.

UnitedHealth Rumored to Be Excluding Labs from Its Network

IN RECENT DAYS, RUMORS HAVE SURFACED that UnitedHealthcare has begun to terminate the contracts it holds with a number of regional and non-national clinical laboratories.

This news surfaced just as The Dark Report went to press. Given its importance to the clinical laboratory industry, we wanted to alert lab executives and pathologists to this development as

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Sonic Uses Lab Data, Patient-Contact Tools, to Improve Outcomes

CEO SUMMARY: In its work for a federally qualified health center, Sonic Healthcare USA helped physicians use a data-driven approach to population health management that incorporated integrated financial and clinical analytics. Also, Sonic developed technologies that give ordering physicians clinical decision support and targeted patient engagement tools. It then developed a way to contact patients

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Project Santa Fe Labs Deliver Value with Tests

CEO SUMMARY: No bigger threat looms over the financial security of the nation’s clinical laboratories than healthcare’s transition from fee-for-service payment to value-based reimbursement. To navigate that transition successfully, medical labs and pathology groups will need to adopt the Clinical Lab 2.0 model. Member labs of Project Santa Fe are themselves working to develop and

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Pathology Groups Should Act Now to Define Value

CEO SUMMARY: Payers and health system administrators generally agree that healthcare is moving away from fee-for-service toward value-based payment. Because adoption of value-based contracts is slower for pathologists than for other providers, pathologists have the opportunity to define how provider systems can pay for value contributed by pathologists. However, to take advantage of this opportunity,

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