Wake Forest Baptist Medical Center of Wake Forest, N.C., has been notified by the Centers for Medicare and Medicaid Services (CMS), in a letter dated June 15, that it is back in compliance with Medicare Conditions of Participation. Earlier this year, following inspection of the hospital and its anatomic pathology department, federal and state officials identified
Tag: Fee-for-serviceSkip to articles
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.
IT’S THE END OF AN ERA for the strategy of being the exclusive national lab provider for a major health insurer. Last week, the two largest clinical laboratory companies announced that the 10-year-old exclusive lab testing deals each had with a different big health insurer had crumbled.
In 2007, Laboratory Corporation of America locked up an
IT IS AN IMPORTANT SIGN OF THE TIMES when press releases about the two new national lab services agreements that UnitedHealthcare just announced with Laboratory Corporation of America and Quest Diagnostics emphasize how value-based programs will be an important element in the health insurer’s relationships with the two national lab companies.
In fact, the joint announcements
“Today, patients want to get diagnosis and treatment faster with fewer visits to the doctor’s office. They want speedier and more comprehensive delivery of clinical services, be it laboratory tests, imaging, or other procedures.”
—Ralph Taylor, President, Sysmex America, Inc.
CEO Summary: To bring testing closer to patients, clinical laboratories will need to offer sophisticated point-of-care systems
WE ARE NOW IN THE NEW YEAR and the 2018 Medicare Clinical Laboratory Fee Schedule (CLFS) is a reality. The dramatic price cuts that the federal Centers for Medicare and Medicaid Services has enacted is the single most disruptive financial event the clinical laboratory industry has faced in the past two decades.
As we have reported,
CEO SUMMARY: Since Dec. 3, four unexpected megamergers became national news. Pharmacy chain CVS Health acquired Aetna. Advocate Health Care and Aurora Health Care will merge. UnitedHealth Group purchased the 2,000 physicians of DaVita Medical Group. Dignity Health and Catholic Health Initiates decided to create a super-hospital system with 139 hospitals in 28 states. Clinical
1. CMS Sticks by Decision to Deeply Cut Medicare Part B Lab Test Fees
SHORT OF A MIRACLE, the clinical laboratory industry is less than three weeks from the single most financially-disruptive event of the past 30 years. On Jan. 1, the federal Centers for Medicare and Medicaid Services will impose deep cuts to Part B
This is an excerpt from a 2,400-word article in the Nov. 20, 2017 issue of THE DARK REPORT. The complete article is available for a limited time to all readers, and available at all times to paid members of the Dark Intelligence Group.
CEO SUMMARY: Here at the dawn of the new era of value-based
CEO SUMMARY: With each passing year, the primary role of hospital and health system labs evolves in a different direction than that of independent lab companies. This trend is a response to the creation of integrated delivery networks paid on value and how they are scored on their ability to keep patients out of hospitals
SINCE THE MID-1990S, HOSPITAL OUTREACH LABORATORY PROGRAMS have lost market share steadily to the nation’s biggest public lab companies. In these two decades, public lab companies traded deeply-discounted lab test prices to health insurers in exchange for exclusive network provider status.
Then, about eight years ago, having captured many managed-care contracts across the nation, big lab