Posts made in 2015

A Case Study on Health System Consolidation and How It Affects Pathology

Posted by on Dec 15, 2015 in Latest News | Comments Off on A Case Study on Health System Consolidation and How It Affects Pathology

ACO Compensation Models Will Lead to Pathologist Employment State’s hospitals consolidate into one health system and start ACO Health system consolidates laboratory services & forces pathology groups to merge Providers must take part in ACO to receive chance at 5% reimbursement increase The next step is pathologist employment Today let’s take a look at a health system that consolidated its laboratory groups, then its pathology groups into a single entity, which they now compensate via a value-based payment model. First, a little history. Before this process began, there were nine separate hospitals located around the state.  These hospitals were served by five separate pathology practices. The hospitals merged over a period of years.  The smaller ones were closed or retooled to be advanced urgent care centers. The bigger ones were also changed by laying off excess administration, expanding the control of the remaining administrators. The next step: merging the laboratories of the major hospitals and closing the labs at smaller hospitals.  The health system built a new core lab and moved all specialties there.  They kept smaller stat labs at some of the larger hospitals, but consolidated histology under one roof. Next, the administration approached the separate pathology practices and aligned all their Part A compensation under the same methodology, at the same rate and key performance indicators. This set the stage for the next change. The administration then picked a “lead” pathologist and requested the groups merge into one larger practice.  Basically, the health system told the lead pathologist, “you merge this together or we will find another option.”  These changes took about three years to complete. The health system started an Accountable Care Organization (ACO) and requested all their providers join. The ACO was very aggressive in signing with the insurance plans in the state and built their compensation rates with value and utilization metrics. If you think this looks a lot like the Physician Hospital Organizations of the early 2000s, you are correct.  The only difference here is these contracts are now built to compensate or penalize by utilization. One unique feature in the ACO plan is a direct 5% withhold (i.e., penalty) for failing the plan metrics.   If you meet the goals, you get your 5%; if you don’t, you lose 5%. Here’s the real rub – if you choose not to be part of the ACO, you don’t have the option to collect that 5% no matter what you do. This type of utilization and value metric plan will only grow in the future, as serves several purposes. First, it forces every group to be part of the deal via the ACO model.  Second, it pretty much guarantees that groups will follow utilization guidelines and eliminate waste. The final step in the process will be to transition the single pathology group from fee-for-service to a salary position.  The health system will push this as a way to control cost and ensure compliance, since in time the health system’s compensation will be tied to an overall metric that includes ALL providers within the system. Mick Raich is the President / CEO of Vachette Pathology.  He can be reached for comment at mraich@vachettepathology.com or...

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Pathology Medicare Revenue Projections for 2016

Posted by on Dec 9, 2015 in Latest News | Comments Off on Pathology Medicare Revenue Projections for 2016

Financial Impact Analyses are underway for Vachette clients In aggregate, we are seeing a 1% increase across the board for 2016 revenue We are at the year’s end again, and it is time to do our projections for 2016.  At Vachette, we take this very seriously. We look at each of our 94 clients and try to determine how the new CMS Physician Fee Schedule (PFS) will affect their income. It is interesting this year, because there was a CMS fee schedule change in July. This was part of the Standard Growth Rate changes which determined that all providers would get a .05% increase.   This was added to the Sample Impact Analysis below, and we see that almost across the board there is a .05% increase. A new fee schedule came out this fall for 2016, again with some changes.  For example, 88305-26 (surgical pathology, gross and microscopic examination) will go up 1.5% while 88311 (decalcification procedure) goes up 1.6%. There are also some interesting losses: 86334-26 (immunofixation electrophoresis; serum) goes down 1.9% and 76098-26 (radiological examination, surgical specimen) goes down 0.3%. These changes are as interesting and as confusing as our federal government. The sample analysis below was developed by looking at practices’ CPT volume by CPT code, then multiplying this versus the July 2015 PFS and the November PFS, noting the changes.  To perform this audit accurately, you must have a charge volume by CPT, preferably by date-of-service. We also included the practices’ geographic location as CMS pays differently for each area in a given state. This table only shows our clients’ Medicare rate changes. We know their managed care plans should be following these changes as well.  Therefore, a revenue projection must also be performed on these carriers. This process of actually predicting our practices’ incomes allows them to make decisions that help them run their practices like businesses, being proactive instead of reactive. The next step in this whole process is to audit some payments from January 2016 dates of service to ensure both CMS and the private insurance plans have made the payment changes they were supposed to make. This is an ongoing process, and this is why we audit our practices at least three times per year. A good 75-step detailed revenue audit helps keeps our clients on line. Summary of 2016 Changes to Pathology Practice Revenue Overall the CMS changes for 2016 are nominal for most practices; our example below shows a slight increase in aggregate of about +1% – not bad.  You should know how your business is going to change in 2016.  With all the payer rules and system consolidation, it is imperative that you stay on top of your payments and how they will play out.  Failing to be attentive can lead to the demise of your practice.  If you are not seeing a 1% increase across the board by March 2016, perhaps you should look into it and start auditing. Source: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Carrier-Specific-Files-Items/CY2015-CarrierFiles-July.html?DLPage=1&DLEntries=10&DLSort=1&DLSortDir=descending...

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Video: Current Issues in Medical Billing Auditing and Compliance

Posted by on Dec 4, 2015 in Latest News, Videos | Comments Off on Video: Current Issues in Medical Billing Auditing and Compliance

As a pathology practice management and auditing firm, Vachette sees it all. Hear Vachette President Mick Raich talk about some of the “scroogy” things going on lately with medical billing, compliance and government regulations.

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Vachette Pathology Newsletter – Fall 2015

Posted by on Nov 19, 2015 in Latest News | Comments Off on Vachette Pathology Newsletter – Fall 2015

Our quarterly newsletter is out! To download this collection of our best articles and social media updates from the past few months, please join our mailing list. We promise not to share your email or send you spam, and you can unsubscribe at any time. You’ll be one of the first to know when we publish the next Vachette Pathology newsletter. First Name (required) Last Name (required) Your Email (required) You can also find our past newsletters here: Summer 2015 Winter 2015 Fall...

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Understanding the PAMA Regulation for Lab Reporting

Posted by on Nov 18, 2015 in Latest News | Comments Off on Understanding the PAMA Regulation for Lab Reporting

If you answer YES to any of these questions, you’d better read further: Am I a lab as defined by CLIA, or do I have at least one component that is a lab? Is my entity reporting under a unique Tax ID number under which all NPIs of the entity are associated? Does my Tax ID receive more than 50% of all Medicare revenue (meaning allowed amounts) from fee-for-service payments under Medicare part A, B, C and D? If yes, you can be exempted from reporting if your CLFS revenues are less than $50,000 in a year (or less than $25,000 in 2015). This caveat provides a full exemption for you, even if you answer yes to all of the above. By now we have all heard about the PAMA regulation for lab reporting, but do we really understand what this is and what it really means to each of us?  Below is a just a little breakdown giving the what, when, who, and why of this regulation. WHAT:  The general idea of lab reporting is to provide CMS a foundational average payment by private payers on clinical lab services.  With this information, CMS will then start making reductions on the Clinical Lab Fee Schedule going forward. WHEN: This is still in the comment period.  People have the option to comment up until Nov 24th.  These comments can help ensure clarification of the regulation, as well as help direct some much needed changes.  If this rule goes through, the initial reporting period begins Jan 1, 2016, and you have until March 31, 2016 to get your reporting completed (reporting data from July 2015-Dec 2015). WHO:  This has been the biggest question of all.  Below is a breakdown of questions to ask to determine if you fall into the requirement for reporting.  If you answer yes to any of these questions, then you are a group who needs to report.  If you fall in this category, be sure to review the final point below, as this may be the one item that will provide a full exemption for you: Am I a lab as defined by CLIA, or do I have at least one component that is a lab? Is my entity reporting under a unique Tax ID number under which all NPIs of the entity are associated? Does my Tax ID receive more than 50% of all Medicare revenue (meaning allowed amounts) from fee-for-service payments under Medicare part A, B, C and D? If yes, you can be exempted from reporting if your CLFS revenues are less than $50,000 in a year (or less than $25,000 in 2015). This caveat provides a full exemption for you, even if you answer yes to all of the above. WHY:  CMS was ready to make CLFS cuts across the board, which would have been implemented in 2015.  This regulation is giving labs the opportunity to drive these cuts.  This is why the comment period is so important.  With the lack of hospital labs participating (a really large part of the market), this will drive the actual payment per CPT down substantially, and we know if the CLFS goes down, the commercial carriers will follow suit.  Kiss your clinical lab revenue goodbye. So, given this information, where do you go from here?  We have the following recommendations: First understand the type of information that you will need to report: CDLT and ADLT have different requirements.  See below for more details. Start working with your billing system to ensure that each CPT has the proper allowable captured on paid claims—at minimum from July 2015...

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