TAG:
Fee-for-service
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.
Big Employers Sue Payers over Price Transparency
CEO SUMMARY: Feeling they’ve been denied access by insurance companies to price data about medical claim payments, self-funded employer plans and unions are taking their health insurance companies…
‘Virchow’ Is Your New Source of Managed Care Insights
WE ARE UNVEILING A VALUABLE INTELLIGENCE RESOURCE FOR YOU. It is a new commentary focused exclusively on managed care contracting for diagnostic services provided by clinical laboratories and anatomic pathology gr…
Labs Face Powerful and Unwelcome Forces
OVER THE PAST 25 YEARS, THERE HAS BEEN WIDESPREAD RECOGNITION THAT HEALTHCARE IN THE UNITED STATES is on an unsustainable path. The obvious argument was that year-over-year increases in healthcare costs would eventually overcome the ability of employers (private health plans) and the government (Medi…
Intermountain Health Merges with SCL Health
CEO SUMMARY: Mergers and acquisitions involving large integrated delivery networks (IDNs) are not only reshaping the nation’s hospital industry. These transactions also transform the way hospitals organize their clinical laboratories. Last month’s merger of Intermountain Health …
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 indust…
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 …
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 physicia…
Sonic Adds More Value to Help Physicians Treat CKD Patients
BUILDING ON THE LESSONS IT LEARNED by developing lab services that helped primary care physicians identify, diagnose, and treat diabetes patients in their practices, Sonic Healthcare USA was ready to do the same for another disease. Sonic wanted to go beyond simply reporting an accu…
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 h…
CMS physician fee schedule: Will hospital labs be excluded again from PAMA price reporting?
CEO SUMMARY: Publication of the draft CMS Physician Fee Schedule on July 12 brought unwelcome news for the clinical lab industry, at least as it pertains to that perennial question: Should hospital lab outreach data be included in a PAMA market study? The federal Centers for Medicare and …
CURRENT ISSUE
Volume XXXI, No. 12 – September 3, 2024
This special intelligence briefing—presented in three parts—identifies the factors retarding a faster adoption of digital pathology. Also, how to protect your lab’s proprietary LDTs and assess the financial impact of compliance.
See the full table of contentsHow Much Laboratory Business Intelligence Have You Missed?
Lab leaders rely on THE DARK REPORT for actionable intelligence on important developments in the business of laboratory testing. Maximize the money you make-and the money you keep! Best of all, it is released every three weeks!
Sign up for TDR Insider
Join the Dark Intelligence Group FREE and get TDR Insider FREE!
Never miss a single update on the issues that matter to you and your business.
The Dark Report • 21806 Briarcliff Dr • Spicewood, TX 78669
Phone: 512-264-7103 • Toll Free Number: 800-560-6363
Email: info@darkreport.com
© 2024 The Dark Report. All rights reserved.