Blue Cross Execs Discuss Reasons for New Policies

Significant changes to the Blues’ decades-old BlueCard program put local labs at disadvantage

CEO SUMMARY: In recent months, officials from the Blue Cross and Blue Shield Association (BCBSA) have responded to the concerns about new billing protocols for services provided as part of the BlueCard program and voiced by such clinical lab associations as the California Clinical Laboratory Association (CCLA) and the National Independent Laboratory Association (NILA). BCBSA executives have suggested that clinical laboratories would be welcome to participate in a national partnership arrangement.

BY ALL APPEARANCES, the BlueCard program offered to members of regional Blue Cross and Blue Shield (BCBS) plans has been a simple and effective benefit. For decades, it has allowed members of one regional BCBS plan to access care when they travel or live in areas outside their home BCBS region.

However, in May 2010, the Blue Cross and Blue Shield Association (BCBSA) sent notification to the 38 independent BCBS programs of a change in how ancillary claims were to be filed by clinical laboratories, DME/HME, and specialty pharmacy. Effective date for this new policy is October 14, 2012. Several regional BCBS plans have already implemented the new policy.

Identifying Preferred Labs

The new BCBSA policy imposes a complicated requirement on clinical laboratories. In a letter to the BCBSA sent on January 23, 2012, Lori Dean Yokum, President of the California Clinical Laboratory Association (CCLA) wrote:

For independent clinical labs the local plan was defined as the plan in whose service area the specimen was drawn as opposed to the service area in which the work was performed. While this policy may be reasonable for services delivered to the enrollee within the plan’s service area by providers such as physicians, hospitals, DME/HME, and pharmaceuticals, it is not practical for independent clinical labs—which draw specimens in several local plan service areas, but perform the services in one physical location—to contract with up to 38 BCBS plans.

Of note, in speaking with numerous state Blue plans, it is also evident that there is no consensus among the Blues regarding the appropriateness of this policy change and many plans are opposed to its implementation as well as the way in which it was imposed by the Association.

For clinical laboratories that serve BCBS members under the BlueCard program, there are two key elements of BCBSA’s policy changes. First, the lab must bill the regional BCBS plan where the specimen was drawn (and not the local BCBS where the laboratory that performed the test is located—as has been current practice).

Second, the new BCBSA policy now defines these BlueCard claims as out-of-network, thus reducing the reimbursement paid to the clinical lab that performed the test. At the same time, the new policy entangles the patient in the billing and reimbursement process because it often requires him or her to pay more out- of-pocket for these lab tests.

“The BCBS Association, while asserting the independence of the plans, has introduced a completely new set of complex rules regarding claims jurisdiction unassociated with beneficiary contracts, lacking regulatory authority or the ability to be reasonably implemented,” wrote Lâle White, CEO of XIFIN, Inc., in a blog posted on the company’s website. “And in so doing, the Blue plans attempting to implement this plan are running afoul of state and federal regulations; from non-adherence to HIPAA electronic standards to ignoring state assignment laws.”

To Clarify Existing Policy

For its part, the BCBSA insists that the new BlueCard policy was necessary and simply a clarification of existing policy. “The May 17, 2010, memorandum referenced in your letter clarified an existing requirement that claims must be filed to the local Blue plan where services are rendered,” wrote Lee Ann Morris, Senior Associate Counsel of BCBSA.

Morris sent this letter on February 23, 2012, to Jeffrey Sherrin, attorney for the National Independent Laboratory Association (NILA). She also wrote: “The clarification provided that, for independent clinical labs, the location where the specimen is drawn determines where the services are rendered. This requirement supports Blue plans’ ability to effectively manage their provider network arrangements to support lab services provided within their respective service areas.”

In an email to THE DARK REPORT, Kelly Miller, BCBSA’s Managing Director, Strategic Communications, explained that in 2010, the association changed the policy to clarify questions involving claims coming from independent clinical laboratories (ICLs).

Filing Lab Test Claims

“The process has always been that claims should be filed to the local plan in whose service area the specimen was drawn,” stated Miller. “In 2010, Blue plans were instructed that as, of October 2012, plans must route and process claims accurately for these services—meaning claims should go to the local plan where the specimen was drawn. If the claim was filed incorrectly, the plans would return the claim to the ICL [independent clinical laboratory] for proper routing to the local plan.”

BCBSA officials have indicated that a “national partnership agreement for the Blues system” would be one way for independent clinical laboratories to work with the Blues. Miller also mentioned this option in her email to THE DARK REPORT.

“There are opportunities for organizations to participate in national partnerships with Blue plans through the BCBSA,” stated Miller. “The association’s Strategic Cost Management team holds the role of Group Purchasing Organization (GPO) for Blue plans. Leveraging a rigorous sourcing process, the GPO contracts nationally across a limited number of ancillary provider categories.”

Identifying Preferred Labs

The concept of a national partnership agreement with BCBSA that would allow local clinical laboratories to participate as in-network providers is being considered by several lab associations and lab industry consultants. In the meantime, lab administrators and pathologists are left to cope with the impact of BCBSA’s revised policy that affects services provided to BlueCard holders.

Attorney Jeffrey Sherrin represents the National Independent Laboratory Association on this matter. He said it is difficult to estimate the effect that the new BCBSA policy will have on local clinical laboratories.

“A clinical laboratory will need to assess how the different regional Blues within its service area treat out-of-network referrals compared to the current BlueCard protocols,” he said. “A clinical lab needs to understand whether it will get reimbursed and through what hoops it must jump to successfully collect those payments.

“The letter I received from Ms. Morris of the BCBSA acknowledges the issues we raised in our letter to her association about inconsistencies in the implementation of this program,” explained Sherrin. “In this letter, she also points out that the association doesn’t interfere in contract decisions made by the local BCBS plans or in any billing and reimbursement arrangements.

In Network or Out?

“Unfortunately, the letter from Ms. Morris doesn’t address the primary question about whether a lab should be admitted to the network,” he added, “as well as whether the Blues plans should treat lab test claims as in-network claims so that labs can be paid at the in-network rate.”

“One troublesome issue is that Morris’ letter to NILA can be read in such a way that it looks like BCBSA is trying to protect those labs considered to be in-network,” observed Sherrin. “There is the implication that the Blues plans have decided to contract with certain labs exclusively.

“What’s the reason for changing these long-standing protocols?” Sherrin asked. “Is the goal to restrict access? The new policy certainly seems to secure the position of in-network labs at the expense of all the other laboratories which have provided testing to BlueCard members.

“It should also be mentioned that this creates an issue in circumstances where specialized tests have been ordered,” he continued. “Most laboratories need to refer this work to reference and esoteric laboratories located in other states. But the new policy says that the lab performing the test must submit the claim to the Blue plan in the region where the specimen was collected.”

The fact that several lab industry associations took the step of formally presenting their concerns in the form of letters to the BCBSA is good evidence that this issue is expected to have a negative impact on many local laboratories.

Technical Issues Require Attention

TO ADOPT THE NEW POLICY CHANGES to the BlueCard Program, regional Blue Cross and Blue Shield (BCBS) plans will need to address several important technical issues associated with how clinical laboratory test claims are accepted and processed.

“For example, some regional BCBS plans have suggested non-standard protocols in order to process claims subsequent to the discontinuation of the BlueCard policy,” observed Lâle White, President and CEO of XIFIN, Inc. “Labs affected by these issues could challenge them in an effort to get these regional Blue plans to conform to established electronic and billing standards.

“There are also some regional Blues plans that require out-of-network clinical laboratories to submit claims on paper,” she continued. “Requiring a claim on paper runs afoul of the requirement that providers and payers are to submit and process claims electronically.

“We are also aware of certain regional BCBS plans that—when they deem a patient went out of network—they issue payment directly to the beneficiary instead of to the provider,” said White. “There are 12 states that have laws requiring plans to honor the assignment of benefits. This is a claims processing policy that labs could legitimately challenge.”


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