This is an excerpt from a 2,700-word article in the November 28 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: THE DARK REPORT delivers the most detailed explanation ever offered of the payer-to-lab payment process, describing it in a way that helps lab managers understand the source of the biggest problems and errors. This is critical information, because labs that submit inaccurate lab price data to CMS under the Protecting Access to Medicare Act of 2014 are at risk of major penalties, and those that submit lab price data full of errors will also be at risk from audits of this data in coming years.
If you’re preparing to deliver test price data to CMS, have you discovered any errors in your numbers? Please share any lessons learned with us in the comments below.
ACROSS THE NATION, clinical laboratories required to report their lab test market price data to the Centers for Medicare & Medicare Services are scrambling to gather that data, ensure it is accurate, and package it for submission to the federal agency starting on Jan. 1, 2017.
Because of this fact, labs are at risk of submitting market price data to CMS that, when later checked by auditors incentivized to find errors, will prove to be full of inconsistencies and problems that can cause federal regulators to assess the onerous penalties that are part of the Protecting Access to Medicare Act of 2014 (PAMA).
In this exclusive interview with THE DARK REPORT, Lâle White, Founder and CEO of XIFIN, Inc., of San Diego, discusses why lab test billing data is rife with errors and inaccuracies. She offers insights and suggestions on how labs can identify and correct these errors before submitting their PAMA market price data to CMS.
The information that follows should be given high credibility, for a very good reason. XIFIN, which describes itself as a “health economics optimization platform and a connected health solution that facilitates connectivity and workflow automation for accessing and sharing clinical and financial diagnostic data,” provides revenue cycle management services to more than 200 laboratory clients.
XIFIN handles between 200 million and 300 million lab claims each year and is electronically connected to all of the nation’s payers. Its client mix includes the nation’s largest lab companies, independent labs, hospital labs with NPI numbers, molecular/genetic labs, and pain management/toxicology laboratories.
The common theme to White’s insights and recommendations to labs as they gather the data they need to report to CMS is that the incoming data from payers is peppered with errors. This didn’t matter in past years, as labs accepted that status quo, deposited the checks, and filed appeals on unpaid claims as a normal order of business.
But the stakes have changed. Now, if labs submit data to CMS that contains errors, inaccuracies, and other problems, downstream audits that uncover these problems can subject the lab to substantial penalties as defined in the PAMA statute. White has much to say about this situation and what steps labs should take to fix the problems, thus allowing them to have confidence that the information submitted to CMS can withstand rigorous audits in subsequent years.
Lab Claims Rife With Errors
“One major issue that all labs reporting price data need to address is the accuracy of the data they get from payers,” stated White. “There is much inconsistency in this data and that is why it is important for labs to understand two things about payer data.
“We know that payers make a lot of mistakes. There’s no question about that. That’s the first problem labs face when compiling data on lab test payment,” she said. “But the second problem is that even with electronic payments, there are many errors in the way claims are processed on both the lab side and the payer side.
“Both facts make it important for every lab to have people trained to recognize these errors,” explained White. “These individuals must regularly audit the data to understand the specific types of errors that can occur. Errors occur in a wide variety of ways, and since XIFIN began work for its lab clients to prepare accurate data for submission under PAMA, we have identified some of the most common errors labs will experience.
“Here’s just one example. Anytime there are multiple units of a single procedure code returned on an electronic remittance advice (ERA), there’s a high potential error rate,” White said. “There is a very high chance that the units aren’t being reported properly on the ERA. Your lab could be submitting payment for five units and the payer could return the payment for only one unit, or the payer could pay for 10 units. We’ve seen big errors, such as when one unit is billed and the ERA reports 1,000 units. This means that for a $17 test, the per-unit price is now $0.017.