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.

Mass Spec Tests Struggle To Gain Insurers’ Attention

CEO SUMMARY: Since 2014, a toxicology lab at the University of Colorado has used mass spectrometry to offer low-cost, accurate multi-analyte test panels that can detect hundreds of therapeutic drugs and drugs of abuse. However, CU Toxicology’s chief medical officer says health insurers are slow to accept this diagnostic technology, despite its demonstrated clinical benefit

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Message to Labs: Improve Outcomes, Get Paid More Money!

CEO SUMMARY: By now, there is widespread recognition among pathologists and clinical lab managers that the era of fee-for-service reimbursement is giving way to new forms of payment that reward value. First-mover lab leaders are in the earliest stages of developing enhanced lab testing services that contribute to improved patient outcomes while reducing costs. These

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Value-Based Care Is One Goal Of WHCN-Sonic Lab JV

CEO SUMMARY: Announced last month, the new laboratory joint-venture partnership with Sonic Healthcare’s Sunrise Clinical Laboratories will allow WCHN to compete with other health systems and prepare to respond to health insurers’ requests that hospital systems offer lower rates in value-based payment models. WCHN has already seen payers shift to low-cost providers. For this reason,

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Sonic, Western Connecticut Health Network Announce New Laboratory Joint Venture

CEO SUMMARY: To prepare for the transition from fee-for-service to value-based payment, Western Connecticut Health Network, a three-hospital health system, announced a laboratory joint venture with Sonic Healthcare. Benefits will include lower test costs, more competitive prices, and the ability to offer same-day turn-around in Western Connecticut. Another benefit is that physicians in towns WCHN

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Clinical Labs Bidding Up Lab Director Salaries

CEO SUMMARY: There’s great news for pathologists and PhDs with expertise in molecular and genetic testing. Salaries are on the rise as more clinical labs build up their molecular and genetic testing programs and need talent to implement and supervise this activity. One experienced medical recruiter recently surveyed all the current pathology openings nationally. He

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