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Value-based reimbursement
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.
Speakers in New Orleans Offer Important Insights
CEO SUMMARY: In coming years, there will be multiple challenges and opportunities for the nation’s clinical laboratories and pathology groups. That was one common theme heard from the 90 speakers and panelists at the 19th annual Executive War College on Laboratory and Pathology Manageme…
Pathologists Face Unsettling Times
THESE ARE UNSETTLING TIMES FOR PATHOLOGISTS, particularly those who practice in a private pathology group that serves one or more community hospitals. Blame it on healthcare’s unfolding transformation and the new aggressiveness of payers to cut the prices they pay for anatomic pathology services. …
Lab Serving Large MD Group Manages Quality and Costs
CEO SUMMARY: For decades, pathologists have pointed out that their expertise in laboratory medicine can be tapped by physicians to improve utilization of lab tests, contribute to improved patient outcomes, and reduce the overall cost of care. Exactly that is now happening at Atrius Heal…
Maine’s Spectrum Medical Group Offers Multiple Specialties
CEO SUMMARY: Pathologists looking for a viable future in a healthcare system marked by integration of clinical care and value-based reimbursement will be interested to learn about Spectrum Medical Group based in Portland, Maine. This 180-member multispecialist group includes 22 pathologis…
Physician Group ACO Targets High-Volume Tests for Savings
HERE’S AN EXAMPLE OF HOW an accountable care organization views cost control. Atrius Health sought to control excess costs by focusing on high-priced items. It started with inappropriate hospitalizations and imaging studies and moved on to laboratory testing. Atrius Health is…
PeaceHealth Lab Helps Docs with Info to Improve Outcomes
CEO SUMMARY: Described by its CEO as “an information company that happens to do laboratory testing,” PeaceHealth Laboratories of Springfield, Oregon, is moving swiftly to develop and deliver value-added services to its client physicians. The lab’s goal is to help re…
Laboratory Offers Early Lessons in Positioning for Success with ACOs
CEO SUMMARY: Accountable care organizations (ACOs) are already leading the shift from fee-for-service reimbursement to population payment. ACOs are leading healthcare’s evolution to preventive care, wellness, and better management of patients with chronic disease. This evolution will re…
Health Insurers See Big Increase in Lab Utilization
CEO SUMMARY: In a recent public workshop, managed care executives revealed that the annual cost of outpatient laboratory testing is increasing at twice the rate of all other medical services. One big driver in the increased spending on lab testing is increased utilization…
Executive War College Sessions Center Upon Three Trends
CEO SUMMARY: There was an interesting blend of anxiety and optimism as a record crowd gathered in New Orleans last week for the 18th annual Executive War College on Laboratory and Pathology Management. The anxiety was rooted in the shrinking prices paid by payers for lab testing services….
Anticipating Washington’s Next Blows to Lab Testing
CEO SUMMARY: With the advent of 2013, almost every lab was responding to some type of price cut. Clinical labs are dealing with the sequential, multi-year cuts to the Medicare Part B Lab Test Price Schedule. Anatomic pathology labs are still adjusting to the expiration of the TC Grandfath…
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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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