R. Lewis Dark:
Charting Your Lab's Course for 2014Not getting The Dark Report in your mailbox every 3 weeks?
WITHOUT QUESTION, CLINICAL LABS AND PATHOLOGY GROUPS will be confronted
with tough challenges during 2014. Across the nation, lab executives and
pathologists tell us that it is no longer "business as usual."
What I find most interesting about the feedback pouring into our offices is
that the Affordable Care Act is not a factor for labs, at least not yet. We all
know that health insurers are narrowing networks as they develop their health
insurance exchange products to meet the specifications of the Bronze, Silver,
Gold, and Platinum plans. Yet few labs are complaining that they have been
excluded from the provider networks associated with these insurance plans.
Rather, the immediate source of pain is financial and is associated with the
decline in reimbursement paid by Medicare and private payers. For many
independent clinical labs and pathology groups, it is the reduced prices now
paid for certain important CPT codes that creates financial pressure.
It is a similar story for hospital laboratories. Nationally, there is a cumulative
decline in inpatient admissions. By itself, this is a troublesome trend for these
institutions. But the declining inpatient admission problem is compounded by
several Medicare initiatives, not the least of which are RAC audits and financial
penalties associated with higher readmissions of Medicare patients.
On their own, hospitals are responding to these developments by classifying
some incoming patients for observation under the OPPS fee schedule. The
net effect is less money per patient bed per year. That directly affects the hospital
laboratory because of cuts to the lab's annual operating budget.
Equally troublesome is that 2014 will bring a new set of challenges for laboratories.
For example, on pages 3-5 of this issue, you will read our first assessment
of the final rules for the 2014 Medicare Fee Update. Medicare officials
pulled back the most onerous elements of their proposed changes to pathology
and clinical laboratory pricing. That's the good news. But the Medicare
program will move forward in ways that will reduce what pathologists and
clinical labs get paid for important lab testing services.
That is why it is easy for me to predict that one trend we will see in 2014 in
the clinical lab industry is lots of cost-cutting. With less money coming in the
door, financial sustainability requires every lab organization to get better at
eliminating sources of waste, trimming costs, and boosting productivity.
ACLA, CAP Comment on
Final 2014 Medicare Rules
Medicare officials moderated some elements
of three proposed rules, but fee cuts will happen
CEO SUMMARY: On November 27, as the nation prepared for
the Thanksgiving holiday, the federal Centers for Medicare &
Medicaid Services (CMS) announced the long-awaited final rules
for 2014. Early analysis of the 1,300 pages of rules CMS released
indicates that the agency moderated one of its proposals to cut
back what pathologists and clinical labs are paid. At the same
time, CMS will continue to move forward with its review and revision
of other pathology and clinical lab procedures.
Lab Companies' IPOs Go
Two-for-Three in November
It's been a busy IPO season for companies
with proprietary molecular and/or genetic tests
CEO SUMMARY: This fall, a parade of molecular and genetic
test companies moved forward with initial public offerings (IPOs)
of their stock. In September, Foundation Medicine raised $106
million from its IPO. Encouraged by this success, three different
companies proceeded with IPOs during November. The IPOs of
Veracyte and Oxford Immunotec raised $58 million and $64 million
respectively. Meanwhile, CardioDx, which had hoped to
raise up to $92 million, pulled its IPO.
NOTABLE PEOPLE: Frederick Sanger Dies at Age 95,
Hailed as Father of Genomics
Double Nobel Laureate in chemistry determined
chemical structure of proteins and sequenced DNA
Lab's Patient-Centric Approach Collects Overdue Money in PSCs
ENTERPRISE-WIDE MASTER PATIENT INDEX IS ESSENTIAL TOOL
CEO SUMMARY: At Sonora Quest Laboratories (SQL),
the 'Voice of the Customer' is guiding the organization's
evolution from physician-centric to patient-centric. It was
quickly recognized that an effective enterprise master
patient index (EMPI) was essential. One patient-centric
service that SQL is in the midst of deploying is the capability
to collect overdue money owed it by patients at the
time of service.
Georgia Lab Pays Docs For Urine Test Referrals
Veritas Laboratory has legal opinion showing
such payments are legal, but will feds agree?
CEO SUMMARY: Physicians could make $400 or more per
sample, according to one physician. But under the federal Stark
Law, the federal Anti-kickback Law, and under Florida state law,
physicians and other healthcare providers are prohibited from
referring patients or doing work for kickbacks and from splitting
fees with other healthcare providers, according to one attorney for
a national law firm. An attorney for Veritas, however, issued an
opinion that the arrangement complies with state and federal law.
INTELLIGENCE: Late & Latent
DEAL WITH SIEMENS
• Pierre G. Cassigneul was
appointed President and CEO
of NMS Labs
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