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.
West Hills Hospital Lab Hits Outreach Home Run
CEO SUMMARY: Popular wisdom says that California’s managed care market is a financial disaster for clinical laboratories. Yet here’s an exciting story about a community hospital that launched a brand-new laboratory outreach program in 1997 and found solid success. During the last two …
Outsourcing Lab Outreach Leads to Better Service
CEO SUMMARY: Many hospital laboratories continue to endure non-stop cutbacks to staffing and funding. The success of the recently instituted laboratory testing outreach program at West Hills Hospital and Medical Center validates that the market continues to reward labs willing to offer ad…
Ten Myths of Lab Management That Led the Clinical Lab Industry Astray
Part One of a Special Series CEO SUMMARY: One of our most popular series ever was the “13 Perilous Parallels” of laboratory management. This four-part story appeared in 1996 and chronicled similar management strategies used by various national laboratories during the…
Wedding Between AutoCyte and NeoPath Will Spawn A Single Prep/Screen System
CEO SUMMARY: Various technologies that automate cytology and Pap smear screening entered the clinical marketplace during the last four years. Because managed healthcare views new technology with a more skeptical eye than fee-for-service healthcare, THE DARK REPORT has provided extensive a…
PennState Geisinger Building “ Distributed Lab ” Around POCT
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Investors Coming Back To Clinical Lab Industry
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MOST OF THE LAB INDUSTRY is watching the impending acquisition by Quest Diagnostics Incorporated of SmithKline Beecham Clinical Laboratories (SBCL). This big news overshadows the steady gains made at Laboratory Corporation of America in its efforts …
Crises Management Plan Essential for Every Lab
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Three Blood Brothers Release Year-End Financial Performance
FINANCIAL REPORTS RELEASED by the three national laboratories for the fiscal year 1998 reveal a definite improvement in their financial performance and cash flow. One sign of this improvement is the fact that none of the three blood brothers disclosed any huge write-downs similar to those experience…
Successful Laboratories Share Winning Methods
CEO SUMMARY: Leading laboratory organizations from three countries will take the podium at the EXECUTIVE WAR COLLEGE in New Orleans on May 11-12, 1999. Their objective: to share up-to-date information on effective laboratory management strategies and methods used to deal with the challeng…
CURRENT ISSUE
Volume XXXII, No. 6 – April 21, 2025
Now that a federal judge has vacated the FDA’s LDT rule, The Dark Report analyzes the judgement and notes the various steps the FDA could take in response. Also, lab testing at pharmacies is proving to be less successful than was once anticipated.
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