Posts made in 2013

Thoughts on the proposed Medicare fee schedule

Posted by on Jul 29, 2013 in Latest News | Comments Off on Thoughts on the proposed Medicare fee schedule

A new proposed Medicare fee schedule has been released and it brings more bad news for pathologists.  Medicare is proposing an estimated impact of -5% for the specialty of pathology and a -26% for independent labs.  The only other specialty taking a hit this large is radiology.  This dire proposal is driven by a decrease on the technical component (TC) for many CPT codes. What does this mean? First this means more trouble for independent labs.  These dermatology labs and small anatomic pathology labs took a significant loss last year with the 88305 TC cut. Many are hanging on hoping for a small increase in the 88305 TC rate.  Sadly there is another proposed 7% decrease in the 88305 TC rate.  Most of these labs have gone on significant cost cutting sprees.  This can only be expected if you lose 33% of your revenue.  These labs have lost Medicare money and money from managed care plans as they followed the Medicare cuts.  The extra 2% pay cut from the sequester did not help any either. Few businesses can survive a 33% cut in their revenue stream.  Often this is their margin and losing this means taking drastic measures to stay in business. Although these labs seldom do 88307 or 88309 type cases, the 88305 TC, 88342 TC and other codes cut will hurt these labs significantly.  (Although it can be argued that 88342 CPT codes is the crux of the volume based billing issue.  I personally have seen cases where 88342 x 24 is billed.)   We must know that many payers have already limited the volume on this code.  Now the volume will be limited and the payment rate cut also. These changes in the last few years seem to be designed to prevent non-pathology groups from billing for pathology, i.e. urology, gastroenterology, etc.  If this is the case then Medicare has thrown out the baby with the bath water as these changes have hurt all pathologists and further forced the practice of pathology to be viewed as a commodity. It should also be noted that there are 1%-2% proposed cuts for the professional component of many of the CPT codes also.  This means a total of 3%-4% decrease in the revenue for these codes if you add in the sequester cut. Granted the government is losing money and needs to cut costs. The current Accountable Care Organization (ACOs) bundled payment model is the latest effort proposed to accomplish this task. Perhaps the  issues with ACO’s (many hospitals are dropping out of their pioneer ACO models) has driven Medicare back to the chopping block and revived the practice of cutting individual CPT codes as a stop-gap measure to prevent rising costs for these services. If we look at radiology we can see a proposed future and it is not pretty.  In radiology, the payment for some CPT codes is actually tiered, for example they get paid 100% on the first view, 75% for the second view and 50% for all other views.  Imagine if the government built a tiered payment for pathology cases that have multiples.  For example, 88305 x 5 would get paid on a similar tiered system. Medicare seems to be trying to equalize the cost for global pathology services.  By decreasing the technical component they are making the physician fee schedule equal to the Ambulatory Patient Classification (APC) rate.  This makes perfect sense to them; why pay more to a hospital for this than to an independent lab.   In my opinion these are the questions left unanswered: When will the hospitals decide to leave the histology...

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Could This Be the End of Insourced Billing?

Posted by on Jun 11, 2013 in Latest News | Comments Off on Could This Be the End of Insourced Billing?

This is my opinion of some of the current changes. The cost for billing your anatomic pathology work just went up; as payments for services decease the cost for billing has to decrease equally.  If billing costs do not decrease at a rate even to the decrease in payments then in fact your billing costs went up.  Look at the facts:  If your billing cost is 5% on an 88305GB that paid $105.86 then you paid $5.30 to get this claim paid. FY 2013 MPFS Final Rule, released Nov. 1, 2012, CMS announced a 33% reduction to the global payment of an 88305.  Now the same 88305GB now pays at $70.46 in 2013 but it still costs you $5.30 to bill.  This is now 7.9% of the total payment.   This means you are paying an extra 2.9% for billing.  This may not seem much but on a practice that collects $10M a year this costs about $290,000 per year. Click the Image to Enlarge How are you going to handle this increased cost?  Many independent labs are saying that they are not changing billing and that they are going to see how it plays out.  These labs have a strong local presence in their communities and have a given mission statement to support their local economy.  This is very admirable.  Some labs will choose to out-source billing and use the savings to increase efficiencies in the lab, increase marketing presence, or drive managed care contracting. My opinion is that no matter what your business is you must choose the path of least resistance to stay competitive. Failure to do this leads to issues that defeat the business.  The key in any business is creating a profit margin. Those companies that can do this survive and those that don’t fail. I can see the writing on the wall for self- billing.  The 2013 MPFS Final Rule cut the clinical lab fee schedule 4.5% and slashed the global charge 33% on 88305. These cuts are significant obstacles to overcome.  I fear some labs won’t survive this change. If you consider the current out-sourced billing world you will see that these services are offering quality outcomes at very reasonable prices.  These billers have huge economies of scale.  They all have large proprietary billing platforms built specifically for pathology and lab billing.  Plus they can take advantage of the cost savings that come from off shoring the manual part of billing and data entry for example. These variables allow them to bill more efficiently and at a lower price than most in-sourced services.  As a person who has reviewed and audited pathology and laboratory billing processes and results for the last ten years I can comment that there are some very effective in-sourced billing sites. But, if you consider the future of further cuts from Medicare and managed care plans, and the proposed increase in the minimum wage and the burdens that come with the billing process changes, i.e. the point of service changes self-billing is going to become more arduous in the future.  Like independent labs, only the most efficient billing operations will maintain profitability. The bottom line is this:  Most labs or groups that do their own billing have costs between 7% and 15%. A realistic outsourced cost is around 5.5% or 6%. I often hear labs say their billing costs are 3% or 5%, although this number may be true, usually these labs have lab people double shifting as billing people. Furthermore when audited  their costs are found to be to be significantly more.  It is not unusual to find...

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Blue Cross Class Action Law Suit and How It Pertains to You

Posted by on Jun 4, 2013 in Latest News | Comments Off on Blue Cross Class Action Law Suit and How It Pertains to You

In a conversation today I spoke with Steven Weinstein, a partner with the international law firm K&L Gates. We discussed the group of class action lawsuits filed over the last several months against Blue Cross and Blue Shield Association and its 38 licensees.  The litigation, now consolidated in federal court in Birmingham, Alabama, will be an antitrust battle against all the licensees for “having allegedly divided and allocated among themselves health insurance markets throughout the nation to eliminate competition.” You may remember that there were a series of class action lawsuits against the the Blues several years back.  The various Blues entities ultimately settled for more than $130 million and were given a very broad release [see  Rick Love MD vs. Blue Cross and Blue Shield Association]. It is likely that the Blues will now use their past release from the Love settlement to try and prevent the antitrust lawsuits from going forward.  This case has numerous details and could possibly lead to a favorable result for providers.  (Isn’t  this reminiscent of the large labs cutting prices to gain market share in California?) It may be in your best interest to contact Mr. Weinstein about the above or any other payor disputes you may have questions about.   He is not involved with the antitrust lawsuit but is knowledgeable about it.   Mr. Weinstein has 20 years of experience in payer disputes and related litigation and will be willing to assist you further.  He can be reached at 305.5393353 or at...

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Commercial Insurance Plans following the TC Grandfather Changes

Posted by on May 13, 2013 in Latest News | Comments Off on Commercial Insurance Plans following the TC Grandfather Changes

We have found that some independent labs are now seeing commercial payers applying the TC (technical component) Grandfather Clause and the non-payment of the technical component of hospital inpatients and outpatient to these labs. The payers are now using the exact same reasoning as Medicare which presumes the payment for the TC is paid via a DRG, therefore the payer does not need to pay the technical component portion of this global bill.  Some payers are actually quoting the Medicare regulations as their reasoning to deny these claims.  How do you fix this? First, you need to review your contract; this change may not be covered by the current contract.  Second, you need to open up discussions with the payers to educate them on this process and the fact that you are actually performing this work. The other option is that you could go back to the hospital for pass through compensation for this work; again this will lead to a series of conversations.  Be advised that the hospital administrators will be blindsided by this request for more...

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Increase Revenue

Posted by on Apr 26, 2013 in Featured Slider | Comments Off on Increase Revenue

Increase Revenue

We oversee more than $1 billion in physician billing each year through a 686-step audit process that covers charge generation down to collections!

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