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
Tag: Value-based reimbursementSkip to articles
Value-based reimbursement is the payment model for medical services that is gradually replacing the traditional fee-for-service model for payers and healthcare organizations. The goal is to cut rising healthcare costs by switching from a model based on quantity to value-based reimbursement, which is based on quality.
Value-based reimbursement is considered a way 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.
In partnership with THE DARK REPORT, the Clinical Laboratory Management Association is working to help labs navigate these revenue-threatening 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.
Medicare, the largest payer in the U.S., has recently been ordered by the Department of Health and Human Services to link 30 percent of fee-for-service payments to quality or value through alternative payment models, such as accountable care organizations (ACOs) or bundled payment arrangements by the end of 2016, and tying 50 percent of payments to these models by the end of 2018.
An ACO, for example is a group of doctors, hospitals and health care providers who work together to provide higher-quality coordinated care to their patients, while helping to slow health care cost growth. In addition to this, through the widespread use of health information technology, the health care data needed to track these efforts is now available.
HHS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 through programs such as the Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs. This is the first time in the history of the Medicare program that HHS has set explicit goals for alternative payment models and value-based payments.
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,
CEO SUMMARY: New national lab contracts that LabCorp and Quest announced in May could disrupt the lab testing market in ways regional labs can exploit, experts said. Health plans entered these new contracts after realizing that the exclusive network contracts do not work, one lab consultant explained, adding that large national labs will compete with
RECENTLY TWO OF THE NATION’S LARGEST HEALTH INSURERS abandoned a managed care contracting strategy that they adopted 11 years ago. Back in 2007, UnitedHealthcare and Aetna each were willing to grant exclusive national provider status to a single lab company in exchange for deeply-discounted lab best prices. (See TDRs, Oct. 16, 2006, Feb. 19, 2007, and
CEO SUMMARY: Despite the challenges hospital and health system laboratory outreach programs face today, there are many ways they can remain viable, according to an outreach expert from Mayo Medical Laboratories. By taking specific steps to increase volume and the value they provide, lab outreach programs can keep their costs down while bringing in more
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
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