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Understanding Reimbursement Changes in the U.S. and What They Mean to Your Anatomic Pathology (AP) Laboratory

PACE credits are no longer available for webinars more than 6 months old.

Overview

The United States health care system is in the fourth year of reimbursement changes. We will explore the effects of these changes on the AP market and in your laboratory. At the end of this presentation, you will have a better understanding of why these changes have occurred. In addition, we will look at solutions to help you through these market changes.

Learning Objectives:

  1. Understand how US AP laboratories are paid.
  2. Review how reimbursement has changed over the past four years.
  3. What to expect in 2017.
  4. Discuss solutions to help your lab meet these challenges.

Webinar Transcription

LORETTA SAYLES:

For the next hour I would like to talk to you all about understanding reimbursement in the U.S. and the changes that we've had to face, and what they mean to your anatomic pathology laboratory.  I always start with this little rubrics congress, this little rubrics cube because certainly we've gone through a lot of puzzles over the last four years and I think it's one big so sure it’s going to continue for a while yet as we move forward. 

But today, I want to cover a lot of information, but I’m hopeful that at the end of that, the presentation, that you will have some takeaways and understand how pathology labs are paid; how reimbursement has changed over the last four years; what we see next for our business, and I should add the word currently because it could be changing daily; and what do you do, what you can do in your laboratory to meet the challenges of this market.

Do how do we get paid for pathology services? 

It's basically one of two ways.  It's either we're paid for Medicare or we're paid for non-Medicare work.  Medicare work is paid from the physician fee schedule which I’m sure most of you are familiar with.  It comes out every January and it's the CPT codes which stands for Current Procedural Terminology.  We deal with these codes every day in the laboratory and I’m sure you're familiar with them.  The pathology codes are 88104 through 88399.  Now there are three things that go into determining what the price is for each one of those codes.  There's the technical component that we refer to as the TC, and that's the actual time that a specimen is in a laboratory, I like to say from the time it walks in the door, comes in the door till it goes out as a finished product, or slide.  The professional component, or the PC time as we commonly refer to it, is the time it takes the pathologist to interpret and make a diagnosis on that specimen.  And the third thing which I think a lot of people aren’t aware of is that the geographic area does play a part because the cost of living in a place like New York City or California is much higher than it is in Florida where I happen to live, or in other states.  So they do have a factor that they count towards the cost of living.  So for instance an 88305 biopsy would be reimbursed at a higher rate in New York or California than it would be say in Florida.  So when you see published rates for codes, that is the average rate across the country, so it may not be the specific rate for your area. 

And Medicare is also divided into multiple regions, and so you need to be aware of what region you fall into.  All this is available on the CMS website.  So you need to know what region you fall into because the regions in the last few years have begun to have a lot of authority in what is going to be allowed to be paid in that area and it can be different from region to region.  The rule is that if something doesn’t have a national rule attached to it, or guideline, then each of the local regions has the authority to make their own rules and guidelines and these are called LCDs or Local Coverage Determination.  And once again they're all published on the CMS website, so depending on where you live and what region you live in, you can look and see if there are any LCDs in effect that would affect your reimbursement in your area.  And it's very good information to know because as I say in the last two or three years we're seeing the regions take on more and more of this responsibility of setting guidelines for Medicare on what they will pay and what they won't pay. 

And then we had non-Medicare work which is also referred to in the literature and so forth as private payers.  It's the insurance and self-pay.  Self-pay is a very limited amount, so it's for the most part insurance.  It does include private insurance companies as well as the Medicare replacement plans.  This gets confusing because I have a lot of clients that think Medicare replacement plans follow the rules of Medicare, but for the most part they do not, they follow the rules of the insurance companies.  And we'll see as we get further into this discussion, the rules can be different for Medicare and non-Medicare work.  However, non-Medicare work does utilize the same CPT coding.  And insurance companies can have contracts with individual laboratories and most of them do, especially with the large laboratories.  Or their contracts may simply say they pay based on Medicare rate, therefore if Medicare goes up or down, their reimbursement rates would go up and down. 

So why did we have to have reform in this country?

 I get asked that a lot.  And the truth is that our spending was totally unsustainable.  The cost had grown over 400% between 1990 and 2012, and almost 200% between 2001 and 2012 so I think everyone knew that we needed to have some sort of reform.  Plus even sadder than that, I always say that's me down there in the corner crying because our outcomes did not keep pace with spending.  In 2012 there was a report put out that said the U.S. had the highest cost of healthcare of any industrialized nation per capita without significantly improved outcomes.  So we had the highest income per person and we were ranked fifth in outcomes, which they base on life expectancy.  So that was not good statistics.  In 2016 we were even--2013 I’m sorry, we were even further down the list, so obviously reform needed to happen.

Along came the Affordable Care Act which was passed in 2012, and that brought rapid change.  Along with putting millions more people on insurance which is what we commonly think of when we think of what the object of the Affordable Care Act, and certainly that was the big part of it, was to give everyone access to insurance.  But there were a couple of other things that were just as important.  They wanted to focus the chance to value and outcomes, and include incentives and penalties for performance by hospitals and by laboratories, by everyone, physicians, everyone in healthcare. 

It also included aggressive reductions in Medicare reimbursement.  The plan includes cutting not only hospital revenues but also the CPT codes for independent laboratories. 

And finally they wanted to get more into bundled and quality based payments vs fee-for -service.  Traditionally, in our laboratory business, we did a test, we bill for the test, and we got paid.  They want to get away from that type of service and you're going to have bundled payments and we’ll talk about this and some of the quality based payments as we get further in the presentation as we're starting to see these rolled out a little bit more each year since this was enacted and it's a big, big change from the way we have been paid in the past.

For 2013 that was when we first saw the big change as far as reimbursement in pathology.  We were expecting it, they told us in 2012 that they were going to cut the reimbursement for biopsy.  The biopsy code, I call it our bread and butter of our business, the 88305, I'm sure everyone is aware of that knows that CPT code by heart.  But we expected it to be in the range of 15% to 20% so people were not happy when it was announced in October 2012 that it was going to be cut 33% for the global reimbursement and 52% for the technical component.  The professional component actually got a 2% increase, so altogether that made the global reimbursement 33%.  It was $105.68 globally and it went down to $70.46.  But if you look up at the technical component, we went from almost $70 to just under $34 which was a big cut on the technical component portion.  Labs bill differently, and labs that bill globally for their work would not feel the hit as much as labs that bill separately.  Many labs bill technical component and the pathologist, or the pathology groups bill their own professional component.  And those types of labs took a much bigger hit than if they billed globally.

Now CMS which is the Centers for Medicare and Medicaid Services, which handles Medicare's responsible for Medicare, base this reduction on determining that the tech time for the 88305 was really 60 minutes vs 30 minutes which it had been previously.  So that's the time it would take one tech, hands on time now, we’re not talking about while it's on the process or the stainer, but hands on time to process one biopsy through the lab from the minute it walks into the door till it goes out.  So they determined that that time was 13 minutes vs 30.  So this was the big hit for many pathology laboratories especially small labs that did mostly biopsies.  So overall, for the whole AP market it was a 5 - 6% decrease.

I like to show this chart even though it's a 2012 chart but it gives you a perfect snapshot of why they selected the 88305 to make that cut.  If you could, notice the CPT codes used in pathology along the bottom of the chart, and in 2012 alone the 88305 Medicare paid $1.7 billion out to laboratories for biopsies.  That's $1.7 billion.  And if you look at all the other CPT codes and add it up together, it would not add up to what that one code was.  So by cutting that code 33%, they were actually able to save $600 million in one year on one CPT code.  So many people think it was low hanging fruit as we say, but it certainly was a simple way for them to take a big chunk of reimbursement out of the pathology market.

In 2014, I'd like to call this the tornado year.  It was a nightmare for pathology laboratories because they had told us in 2013 that they were going to look at IHC next, which is immunohistochemistry.  But we didn’t expect the complicated rules or anticipate them that came out that January.  What happened was the American Medical Association sets the dollar amount for coding and the rules for coding for the insurance work.  And CMS for Medicare work wanted to change the guidelines so that the first primary antibody was by specimen and not by block as it had been.  And the American Medical Association did not agree with them and they could not compromise and come to an agreement, so we ended up with two set of guidelines.

If a patient was a Medicare patient, they were billed for IHC by specimen, and if they were an insurance or private pay patient they were billed per block.  And this was extremely difficult for laboratories because it required a lot of programming from LIS systems, Medicare implemented new G-codes for Medicare work so that we could distinguish between the two, 88342 was still used on the insurance side, they used a G-code on  the Medicare work side.  It was difficult to track, it was difficult to bill, and it was difficult to code for laboratories.  It wasn't until the middle of 2014 before labs really got a handle on their billing and their coding and at the end of the year it resulted in about a 30% reduction across the board in IHC revenues.  I said about a 30% because some labs had more and some labs had less depending on how much Medicare work you did; your patient mix played into that.

For 2015, I really thought we were over the hump.  Everything kind of remained flat, things had settled down, thought the worse was over.  It was about a -1% to +3% change in your reimbursement depending on again your patient mix and the type of work you were doing.  CMS continued to stress that they were going to continue to push down on reimbursement, on what they feel was overutilized and overvalued codes.

They did make a compromise with the American Medical Association.  They eliminated the G-codes for IHC, they agreed on 88342 per specimen for the initial single antibody; they added the 88341 IHC per specimen for each additional singe antibody; and they also added the 88344 for each multiplex antibody stain.  So now we're back to one set of guidelines for IHC so that was kind of a relief to everyone in the labs as far as coding and billing was concern. 

They also made up some other changes in 2015.  Prostate biopsies, they made a G code for prostate biopsies and it's one single code no matter the number of biopsies on a patient.  CMS feels this code is still overvalued at this point and is looking to reduce the dollar amount in 2016, so it doesn’t matter if you do four biopsies on a patient, or you do 14 biopsies on a patient.  And if it’s a Medicare patient, it's going to be billed G0416 times one.  Now non-Medicare work will continue to use the CPT codes and if there's 14 specimens, it has continued to be 88342 times 14.  So this is the first bundling code that we received from CMS and it's an example of what they want to do and we'll be doing more as we move forward. 

They also added three new quality measures to the PQRS as we refer to it.  The Physician Quality Reporting System was actually rolled out in 2013, but it was a voluntary program.  What happened was they told pathologists and pathology groups and laboratories, if you keep track of statistics on breast cancers and send them to us, at the end of the year we will give you a bonus for doing that.  So it was not required and you did not lose money.  Well in 2015, they changed it and added lung biopsy, lung resection, melanomas as well as keeping the breast cancers.  So participation in a 2015 PQRS now became mandatory.  Those of you have all missed calls that did not participate in 2015 and send in those statistics, your payment will be affected this year and reduced by Medicare.  This is a, if I take back to the slide where I talked about value base penalties and incentives, this is a value thing to have these statistics for these different types of cancers, but there's going to be penalties if you do not participate.

And the other thing they announced in January 2015 is that by 2016 they wanted to have 30% of all fee-for-service payments changed to alternative methods of value and bundled pricing, and 50% by 2018.  So we're into it now, if things don't change, we should and by 2018 half of the work that we do in our labs will not be fee-for-service based.  They also are looking at things like they came out with the rule that hospital owned surgery centers were going to get one bundled payment similar to the DRG payments for inpatients.  This is another example of bundling and then everybody would get a piece of that pie from the one payment.

So 2016 was a good year actually.  We had lobbyists from College of American Pathologists that lobbied CMS to have the 88342 and 88341 have the same reimbursement.  As you all know, it is the same amount of work.  It's on different blocks, it's the same amount of reagents are used on both.  Originally in 2015 when they added the code, they only made it 40% of the dollar value of the 88342.  So in '16, they were able to get it raised by compromised to 70% of that value.  This gave us the 8% overall increase in IHC revenue because we do a lot of those additional antibodies as you all know.  And the prostate code that they talked about in the year before, they did reduce it on the technical component side by 17%.

In 2016 about the middle of the year, we started getting some reports, our labs started getting some reports from this company eGlobalTech.  CMS has contracted with this company to provide comparative billing reports for laboratories and physician groups.  And it compares your lab to the peers in your state and in the U.S.  The 2016 report was on GI biopsies, including special stains and IHCs.  What the report said, it gave you the total number of GI biopsies that Medicare paid your laboratory for and what was the percent of those biopsies that had special stains and what was the percent that had IHC.  And then they compared it to your peers and the results were either does not exceed your peers; higher but not significantly higher; or significantly higher.  And they, a copy into this, this came with a letter that said that you--this was only for your information, it was to allow you to know if you were ordering more specials and more IHC on GI biopsies than your peers in your region and the U.S. 

So also in 2016, CMS let us know that what they consider as overvalued so we could expect to see cuts in 2017 were cytology, flow cytometry, consultations, and tumor IHC.  And we'll talk about that, what really have those cuts turned into a little bit later. 

Protecting Access to Medicare Act

I want to spend some time on the next part of this slide because it's near and dear to our hearts right now.  This is the Protecting Access to Medicare Act, and the reason I say it's near and dear is because we're right in the middle of our first reporting period.  This Act was passed in 2014 and is part of the Social Security Act, and it requires revisions to the clinical diagnosed lab test under the clinical lab C schedule.  They are targeting a 1% reduction in all Medicare payments.  Now the new C schedule at the time the law came out was to come out in January of this year.  There was the public outcry because they didn’t know labs weren't aware of it till 2015 when they were supposed to begin collecting data.  It has a large administrating burden attached to it, so CMS agreed to delay this for one year, so the new C schedule is going to come out in January of 2018. 

What happens is the rules state that every three year there will be a specific data collection period of six months.  The first one was January through June, of last year.  Then there will be a three month reporting period that gives the labs time to analyze their data and then report it to CMS.  If they are qualified as a lab to do this, they can be penalized up to $10,000 a day or for not doing it.  Now the rule also says that they can't, because we’re expecting cuts, and this is a concern for January of next year, the rule has reduction limits.  The first year they can only cut 10%, and they can only cut 15% in three years.  So if the schedule comes out in 2018 and there's a code that they think is overvalued and they cut it, they can only cut it 10%, and they can cut 5% the following year, but then they would have to wait till the fourth year to cut it again. 

What they're trying to do is what the information you have to submit is all the private payers.  What Medicare wants to see is they want to make sure they are not paying more for reimbursement than the average medium of all of the private payers which is going to be the insurance companies, the Medicare replacement plans, and Medicaid.  So this is a lot of data for labs to collect and hopefully the ones that are expected to collect it have done it.  I have been getting e-mails and calls from customers especially neat the end of the year last year like oh my goodness, we need to get this done and right away and what's going to happen if we don't and do we qualify.  There are labs that are exempt and this is very important.  If during the reporting period you collected less than $12,500 from the clinical lab C schedule and the physician's C schedule, and it's based on the MPI number, unless 50% of your revenue was Medicare then you do not have to file with this Act.  The purpose of this was to eliminate most of the small physician office labs and independent laboratories because it's a large administrative burden and these small labs simply do not have the resources to collect and scrub this data.  So this rule they think will eliminate about 95% of the physician office labs, and about 50% of the independent laboratories.  Now that being said, the other 50% of independent laboratories, because they're all large independent laboratories, they cover about 90% of the reimbursements that Medicare pay to independent labs, and the same could be said for the physician office labs.  So they will still be able to capture the large labs but they wanted to give a break to the smaller labs.  This has been very confusing for labs to know if they qualify or didn’t qualify to do this.

In October 2016... the proposal came out for 2017 and what they did was they took the cuts again on the technical component side.  Another 17% on 88305, this is going to be really hurt I think.  So now when we look at the 88305 it's going to be $29.34 on the technical component for 2017, professional components raised to $39.71 so the global reimbursement is $69.05 which that began this month.  They also took 19% out of the 88307 and 88309 which are complex cases, more complex than the biopsies.  Now the reason on the technical components on the 88305, 88307 and 88309 as well as they took another 19% cut on the technical component of prostate biopsies, they stated in the ruling that it was because histology supplies have gone down in cost and they especially named eosin as being one of the suppliers that had been greatly reduced so that's why they were able to recommend these cuts.  They are taking 19% out of all the flow cytometry CPT codes.  They did however increase the 88361, that's the computer assisted tumor IHC, about 7%, and they also increased consults, outside consults.  So the professional component was raised and the technical component was once again lowered.  So globally, it's not that much of a change from 2013 when you look at the chart above, but when you look at the technical components, it's a big hit.

So this just started this month, so we really haven't seen the collections come in or the billing.  That's where we are now.  So I think it's usually, it will be probably March and we'll have a feel for what kind of effect this is going to have on our laboratories, and again it depends on your patient mix and the type of work that you do so every lab will be different.

What do we see next? 

That's interesting because as far as CMS is concerned, they say they're going to continue to focus on increased quality with decreased cost.  So we know as we stand right now, we have a lot more people in the insurance so we should actually increase overall in our business, but we're going to be paid less for each test that we do.  But we also have a new administration in Washington, so where that leads us, we'll take it day by day and see what goes with that and be prepared for whatever changes come down the road. 

I know they're saying they're going to repeal the Affordable Care Act, but then I hear it's not going to be repealed for all parts of it, so we'll have to wait and see if we’re affected or not and if we are in what way. 

CMS has said they are going to continue to push down on reimbursement on what they feel overutilized and overvalued tests, and the way they do that is by lowering reimbursement for CPT code and then by bundling. 

What can you do? 

Stay abreast of current changes that affect the AP market.  Adapt and be prepared when these changes toll out.  I can't stress that enough, I think it's the most important thing that you can do.  You have to be proactive, and to be successful in this market in your laboratory.  You need to know your business.  Where does your revenue stream come from?  Do you have more Medicare work than non-Medicare work?  How's this going to affect you in your business model?  Know your cost per test.  I travel all over the country all year long, and I can't tell you that at least 90% of the people I talk to and I always ask when I’m doing presentations, how many know their cost per test, and the answer is very few.  You can't strive to improve your processes and reduce your cost per test if you don’t have a baseline to start with.  I tell customers the simplest way is if you have access to your operating expenses, divided it by the number of CPT codes for that period.  If monthly, what were your expenses for the month, divide it by the number of CPT codes billed and that’s your average cost per test across your laboratory. 

Now if you have the resources, I'd like to break it down into primary histology, and an IHC or advance histology which would cover IHC and any molecular test you might be doing because there's a big difference in the cost of a primary test and the cost of some of these advanced tests.  So that way, you can have a better feel, you get higher costs on the IHC molecular side but you get higher reimbursement.  So it gives you a real good feel for where you are, where your costs are, and will help you move to the next step.  And you need to focus on improving quality because well, it's always good to focus on improving quality, I'm a big proponent of that.  But it's also going to be required that when you focus on improving quality and we have the mechanisms to document that we are doing that.  We need to improve efficiencies, reduce errors, and improve patient safety. 

Summary

Just to summarize, all areas of healthcare in the U.S. are changing.  Every aspect of our business is being affected.  We are all in this together and we need to work together to increase the efficiencies, reduce cost, and improve quality.  It's no longer just a simple goal in our laboratories; it's what we need to do to be successful.  And at the end of the day if we do all that, we are also improving patient care.

So I want to talk a little bit about references.  I put this up here because everything in this presentation comes from the CMS website.  I can't tell you enough that you need to get on there, you can find out all the information you need to know that pertains to your laboratory on the website.  And they have newsletters, and they have questions and answers, you can find they have fact sheets, everything that pertains to you in your particular region and any of the LCDs that would affect pathology.  So please, take the time to go there and research and it will beneficial. 

I want to thank you for joining us today, and I really wish you success in your business and in your laboratory.  And I hope we have some questions.  We have time for questions?

 

Questions and answers

MODERATOR:  We do have time for questions, and Loretta that was a fantastic presentation.  Tons of information, I learned a lot, a lot lot, so thank you for that.  By the way, Susanna has put that link into the chat box, that long link that some of you have probably been trying desperately to write down with 100% accuracy.  Don’t worry about that, you can copy and paste the link from the chat box to get to that website that Loretta was just talking about. 

So let's move to our first questions, Loretta.  Let you get a drink of water while I read.  If the Affordable... by the way I just, I was to read a chat here that says thank you for the excellent presentation, this was one of the best presentations I've heard.  And she asks if you'll conduct a workshop at CAP, just a suggestion, but do you speak at CAP or will you?  Are you familiar with it?

MS. SAYLES:  I haven't but I would be glad to.  I always... I'm asked to do this at the National Society for Histotechnology, but I would love to do it at CAP.

MODERATOR:  Well, let's you and I chat after this and see if we can--I’ll put you in touch with the right people if you need that.  So moving on to our first question.  If the Affordable Care Act is repealed, this is a tough question and you did talk a little bit about this, but if it is repealed, how will our current reimbursement be affected?

MS. SAYLES:  Well of course that’s a million dollar question and I’m sure one everybody's asking but I can tell you that CMS is really working diligently to not let all the changes that they have made over the last four years be lost.  They feel they've come a long way.  They have been sending letters, public letter to Congress to whatever changes they make to the Healthcare Act that they don't change the things that CMS has done as far as reimbursement because I would really be surprised personally, it could happen, but we have to have some way to cut the cost.  As you saw the spending was not sustainable so they've come a long way.  Not that we're always happy about how they've done it, but I would be very surprised if they just flip the switch and we went back to doing things the old way.  I just don’t see that happening.

MODERATOR:  Okay, good, thank you.  That's... that is the mystery that will be solved I guess pretty soon?  And then next question follows in line with this.  What do you think will happen to PAMA under the new administration?

MS. SAYLES:  Well that's interesting because it's not, this Act is not part of the Affordable Care Act, it's part of the Social Security Act so I don't anticipate it going anywhere.  But now that's not to say but it's certainly not part of the Affordable Care Act; it's part of the Social Security Act, so I don’t think they're talking about changing that yet.  Not to say they won't, but currently I wouldn't think we would be affected so that reporting period is March 31st, everything needs to be in.  So I would suggest everyone that have collected that data that they scrub it and make sure they are accurate when they send it in. 

MODERATOR:  Okay, thank you.  I will see how your crystal ball works over the next few months.

MS. SAYLES:  Yeah.

MODERATOR:  And the next question, I'll lead with a comment.  Thank you so much for this informative webinar and the timing couldn’t be better.  My question is, is there a correlation between discontinued antibodies and the reimbursement for immunotests?

MS. SAYLES:  I actually don't have the answer to that off the top of my head.  So what was that again, the correlations for...

MODERATOR:  Between discontinued antibodies and the reimbursement for immunotests.

MS. SAYLES:  I don't have that off, but I will do some research on it if that person would like for me to contact them by e-mail I'd be glad to do that.

MODERATOR:  Okay.  I will--let me put a note here.  That was the sound of me typing a reminder. 

Next question for you Loretta is, what recommendation do you have for billing all the requests for niche molecular genetic test labs that are popping up everywhere and being requested of us by oncologists?  Should this only be allowed on outpatients and/or have the niche lab do the billing?

MS. SAYLES:  This is another one that I don’t have the answer for.  I think that again no one seems to have the answer.  I've heard it asked many times, and there is not clear picture and from what I’m hearing the reimbursement has not been consistent.  There is a lot on the CMS website, I would refer you to that area because molecular is not my expertise.  But I think there's been a lot on there on the CMS website and I think a lot of it is going to come down to what I call those local coverage determinations.  There is some information about the fact that many of these tests are new, there are no guides, like there's no way for CMS to determine what the value should be for these codes on these new tests.  What they normally do when a new test is added, they use a method called crosswalking, and that's where they temporarily set a code for the first year based on similar codes or similar tests that have similar costs and that's kind of how that number is determined because they just don’t have an idea of the brand new technology which some of these molecular tests are.  But some of the tests are so new and so different that they can't use the crosswalk method and they go to what's called a fill gap method and I think that's more like guessing where they need to be, it's more difficult.  But from what I've heard was people that are trying to bill a lot of these tests, it's very frustrating, there's some test that might not get paid at all and it takes a long time to get paid because they’re on the local bases in each of the regions trying to do these crosswalk and gap filled methods to determine what the reimbursement should be.

MODERATOR:  Okay, excellent.  Thank you.  Some more very good questions coming up here.  Here's one even I can answer.  Outstanding presentation; will we get a copy of this?  As always the recording will be available on the Pathology Leaders website in the archives section, and Susanna will be putting that link into the chat box shortly here.  So copy and paste that and you can review the recording at any time of course with the slides. 

Next question.  When, she's just put it into the chat box, thanks Sus.  When consults are requested of us, post discharge of patients, can we bill and get... can we bill and will we get paid?  Also do we enter DOS as the data of the consult requested vs blocked DOS?  So the first question when consults are requested of us, post discharge of patient, can we bill and will we get paid?

MS. SAYLES:  And my understanding is there's a time limit on it.  The last I heard, and again I suggest you check your local region because they could be different regionally, but I know, I think in our region it's five days after discharge, so you can't go back three months and then try to bill it.  That's first part of the question.  And what's the second?

MODERATOR:  The second is, do we enter DOS as date the consult is requested vs block DOS?

MS. SAYLES:  It's my understanding it would be the date requested of the consult.

MODERATOR:  Okay.  And there's a very nice comment here.  Let's move to the next one.  Can anyone request the data from eGlobalTech?

MS. SAYLES:  I don't know; that's a good question.  I would imagine they could.  I don’t know if they send it out.  I assume they send it out to everyone but maybe they didn't.  I have had a few clients that called me about it, and I saw theirs, but I assume that it was going to be going to everyone, but since it was the first time it went out it could have just gone to the southeast region where I have the live.

MODERATOR:  Okay, thank you.  Next is, it just came in so I’m kind of glancing over it really quickly, sorry.  The next question is, again, thanks, every question starts with thanks for a great presentation.  Very informative for us over the pond over in England who hear so much about Medicare and Medicaid, and do not really understand what it all means.  It makes things clearer but seems it's going to be tough making any profit in the anatomical pathology lab.  Not really a question, but more of a comment.

MS. SAYLES:  Well, my feeling is that you can, and labs do, but you really have to pay attention.  In the old days we made a lot of profit and I don’t think labs were necessarily had to be run that well.  But I think now you need to be run like a business, and you need to know your business and where your revenue comes from, and what you can do by reducing your cost and growing your revenue.  So it's certainly labs are successful and I have clients they are very successful but they've also learned how to change the way they operate.

MODERATOR:  Yeah, and hopefully the tech costs will continue to come down because that seems to be where it's cutting from your presentation.

MS. SAYLES:  Right.  And I think that's why we're seeing a lot of consolidation in this country.  A few labs have gone out of business, small labs that especially just depended upon the biopsy CPT code for survival, couldn't survive under the new changes.  But for the most part what labs are doing, are they consolidating and partnering with other labs to consolidate their costs and get those revenues, increase revenue efficiency.

MODERATOR:  Okay, wonderful.  Thank you very much.  And we have time for two more quick questions.  Is Medicare reimbursement the same in all areas of the U.S.?

MS. SAYLES:  No, it is not.  It's becoming more and more dependent upon what region you live in.  First there's the geographic cost of living factor that's put into the formula for the original Medicare reimbursement.  And then secondly because each region has been given more authority to say we're not going to pay for this, and we're not going to pay for that or we’re going to bundle this, so if it's not covered under a national rule or national what we call NCD, National Coverage Determination, then each region has the ability to set their own rules.  So it is going to be different everywhere which is why I stress, really stress that you know what your region is, and if you go on the website you can find every rule that pertains to pathology within your region.

MODERATOR:  Excellent.  And our last question is can you give us an example of bundled or quality based payments in pathology?

MS. SAYLES:  Well, as we talked about prostates we're the first one, and it's a big change because it's a big difference in being able to bill for 88305 times 12 for 12 specimens on one patient, and being able to bill one CTP code of G0416 no matter how many specimens.  So that's a bundled I think we'll see more of it, and per CPT code in that way.  And then the other way that they’re bundling doesn't really pertain to labs except our lab fee is in it, is the fact that if they take hospital surgery centers and they give them one fee for doing an endoscopy, and there's biopsies in that, and maybe the biopsies require IHC, all those things, that surgery center is paid one fee and they’re going to have to pay the laboratory for instance for the biopsy portion and the anesthesiologist and all parts that we used to get individual bills to, Medicare would not just get lump sum which would have to be divided between everyone that was involved.  So those are two different types of examples of bundling.

And quality is just I think where they’re going to give us more guidelines which is administrative burden on laboratories and cost associated with that.  But just like the physician's quality management reporting system, we have to report now.  If we don’t report these cancer statistics, you’re going to lose 5% to 6% of your reimbursement next year.

Webinar Transcription

LORETTA SAYLES:

For the next hour I would like to talk to you all about understanding reimbursement in the U.S. and the changes that we've had to face, and what they mean to your anatomic pathology laboratory.  I always start with this little rubrics congress, this little rubrics cube because certainly we've gone through a lot of puzzles over the last four years and I think it's one big so sure it’s going to continue for a while yet as we move forward. 

But today, I want to cover a lot of information, but I’m hopeful that at the end of that, the presentation, that you will have some takeaways and understand how pathology labs are paid; how reimbursement has changed over the last four years; what we see next for our business, and I should add the word currently because it could be changing daily; and what do you do, what you can do in your laboratory to meet the challenges of this market.

Do how do we get paid for pathology services? 

It's basically one of two ways.  It's either we're paid for Medicare or we're paid for non-Medicare work.  Medicare work is paid from the physician fee schedule which I’m sure most of you are familiar with.  It comes out every January and it's the CPT codes which stands for Current Procedural Terminology.  We deal with these codes every day in the laboratory and I’m sure you're familiar with them.  The pathology codes are 88104 through 88399.  Now there are three things that go into determining what the price is for each one of those codes.  There's the technical component that we refer to as the TC, and that's the actual time that a specimen is in a laboratory, I like to say from the time it walks in the door, comes in the door till it goes out as a finished product, or slide.  The professional component, or the PC time as we commonly refer to it, is the time it takes the pathologist to interpret and make a diagnosis on that specimen.  And the third thing which I think a lot of people aren’t aware of is that the geographic area does play a part because the cost of living in a place like New York City or California is much higher than it is in Florida where I happen to live, or in other states.  So they do have a factor that they count towards the cost of living.  So for instance an 88305 biopsy would be reimbursed at a higher rate in New York or California than it would be say in Florida.  So when you see published rates for codes, that is the average rate across the country, so it may not be the specific rate for your area. 

And Medicare is also divided into multiple regions, and so you need to be aware of what region you fall into.  All this is available on the CMS website.  So you need to know what region you fall into because the regions in the last few years have begun to have a lot of authority in what is going to be allowed to be paid in that area and it can be different from region to region.  The rule is that if something doesn’t have a national rule attached to it, or guideline, then each of the local regions has the authority to make their own rules and guidelines and these are called LCDs or Local Coverage Determination.  And once again they're all published on the CMS website, so depending on where you live and what region you live in, you can look and see if there are any LCDs in effect that would affect your reimbursement in your area.  And it's very good information to know because as I say in the last two or three years we're seeing the regions take on more and more of this responsibility of setting guidelines for Medicare on what they will pay and what they won't pay. 

And then we had non-Medicare work which is also referred to in the literature and so forth as private payers.  It's the insurance and self-pay.  Self-pay is a very limited amount, so it's for the most part insurance.  It does include private insurance companies as well as the Medicare replacement plans.  This gets confusing because I have a lot of clients that think Medicare replacement plans follow the rules of Medicare, but for the most part they do not, they follow the rules of the insurance companies.  And we'll see as we get further into this discussion, the rules can be different for Medicare and non-Medicare work.  However, non-Medicare work does utilize the same CPT coding.  And insurance companies can have contracts with individual laboratories and most of them do, especially with the large laboratories.  Or their contracts may simply say they pay based on Medicare rate, therefore if Medicare goes up or down, their reimbursement rates would go up and down. 

So why did we have to have reform in this country?

 I get asked that a lot.  And the truth is that our spending was totally unsustainable.  The cost had grown over 400% between 1990 and 2012, and almost 200% between 2001 and 2012 so I think everyone knew that we needed to have some sort of reform.  Plus even sadder than that, I always say that's me down there in the corner crying because our outcomes did not keep pace with spending.  In 2012 there was a report put out that said the U.S. had the highest cost of healthcare of any industrialized nation per capita without significantly improved outcomes.  So we had the highest income per person and we were ranked fifth in outcomes, which they base on life expectancy.  So that was not good statistics.  In 2016 we were even--2013 I’m sorry, we were even further down the list, so obviously reform needed to happen.

Along came the Affordable Care Act which was passed in 2012, and that brought rapid change.  Along with putting millions more people on insurance which is what we commonly think of when we think of what the object of the Affordable Care Act, and certainly that was the big part of it, was to give everyone access to insurance.  But there were a couple of other things that were just as important.  They wanted to focus the chance to value and outcomes, and include incentives and penalties for performance by hospitals and by laboratories, by everyone, physicians, everyone in healthcare. 

It also included aggressive reductions in Medicare reimbursement.  The plan includes cutting not only hospital revenues but also the CPT codes for independent laboratories. 

And finally they wanted to get more into bundled and quality based payments vs fee-for -service.  Traditionally, in our laboratory business, we did a test, we bill for the test, and we got paid.  They want to get away from that type of service and you're going to have bundled payments and we’ll talk about this and some of the quality based payments as we get further in the presentation as we're starting to see these rolled out a little bit more each year since this was enacted and it's a big, big change from the way we have been paid in the past.

For 2013 that was when we first saw the big change as far as reimbursement in pathology.  We were expecting it, they told us in 2012 that they were going to cut the reimbursement for biopsy.  The biopsy code, I call it our bread and butter of our business, the 88305, I'm sure everyone is aware of that knows that CPT code by heart.  But we expected it to be in the range of 15% to 20% so people were not happy when it was announced in October 2012 that it was going to be cut 33% for the global reimbursement and 52% for the technical component.  The professional component actually got a 2% increase, so altogether that made the global reimbursement 33%.  It was $105.68 globally and it went down to $70.46.  But if you look up at the technical component, we went from almost $70 to just under $34 which was a big cut on the technical component portion.  Labs bill differently, and labs that bill globally for their work would not feel the hit as much as labs that bill separately.  Many labs bill technical component and the pathologist, or the pathology groups bill their own professional component.  And those types of labs took a much bigger hit than if they billed globally.

Now CMS which is the Centers for Medicare and Medicaid Services, which handles Medicare's responsible for Medicare, base this reduction on determining that the tech time for the 88305 was really 60 minutes vs 30 minutes which it had been previously.  So that's the time it would take one tech, hands on time now, we’re not talking about while it's on the process or the stainer, but hands on time to process one biopsy through the lab from the minute it walks into the door till it goes out.  So they determined that that time was 13 minutes vs 30.  So this was the big hit for many pathology laboratories especially small labs that did mostly biopsies.  So overall, for the whole AP market it was a 5 - 6% decrease.

I like to show this chart even though it's a 2012 chart but it gives you a perfect snapshot of why they selected the 88305 to make that cut.  If you could, notice the CPT codes used in pathology along the bottom of the chart, and in 2012 alone the 88305 Medicare paid $1.7 billion out to laboratories for biopsies.  That's $1.7 billion.  And if you look at all the other CPT codes and add it up together, it would not add up to what that one code was.  So by cutting that code 33%, they were actually able to save $600 million in one year on one CPT code.  So many people think it was low hanging fruit as we say, but it certainly was a simple way for them to take a big chunk of reimbursement out of the pathology market.

In 2014, I'd like to call this the tornado year.  It was a nightmare for pathology laboratories because they had told us in 2013 that they were going to look at IHC next, which is immunohistochemistry.  But we didn’t expect the complicated rules or anticipate them that came out that January.  What happened was the American Medical Association sets the dollar amount for coding and the rules for coding for the insurance work.  And CMS for Medicare work wanted to change the guidelines so that the first primary antibody was by specimen and not by block as it had been.  And the American Medical Association did not agree with them and they could not compromise and come to an agreement, so we ended up with two set of guidelines.

If a patient was a Medicare patient, they were billed for IHC by specimen, and if they were an insurance or private pay patient they were billed per block.  And this was extremely difficult for laboratories because it required a lot of programming from LIS systems, Medicare implemented new G-codes for Medicare work so that we could distinguish between the two, 88342 was still used on the insurance side, they used a G-code on  the Medicare work side.  It was difficult to track, it was difficult to bill, and it was difficult to code for laboratories.  It wasn't until the middle of 2014 before labs really got a handle on their billing and their coding and at the end of the year it resulted in about a 30% reduction across the board in IHC revenues.  I said about a 30% because some labs had more and some labs had less depending on how much Medicare work you did; your patient mix played into that.

For 2015, I really thought we were over the hump.  Everything kind of remained flat, things had settled down, thought the worse was over.  It was about a -1% to +3% change in your reimbursement depending on again your patient mix and the type of work you were doing.  CMS continued to stress that they were going to continue to push down on reimbursement, on what they feel was overutilized and overvalued codes.

They did make a compromise with the American Medical Association.  They eliminated the G-codes for IHC, they agreed on 88342 per specimen for the initial single antibody; they added the 88341 IHC per specimen for each additional singe antibody; and they also added the 88344 for each multiplex antibody stain.  So now we're back to one set of guidelines for IHC so that was kind of a relief to everyone in the labs as far as coding and billing was concern. 

They also made up some other changes in 2015.  Prostate biopsies, they made a G code for prostate biopsies and it's one single code no matter the number of biopsies on a patient.  CMS feels this code is still overvalued at this point and is looking to reduce the dollar amount in 2016, so it doesn’t matter if you do four biopsies on a patient, or you do 14 biopsies on a patient.  And if it’s a Medicare patient, it's going to be billed G0416 times one.  Now non-Medicare work will continue to use the CPT codes and if there's 14 specimens, it has continued to be 88342 times 14.  So this is the first bundling code that we received from CMS and it's an example of what they want to do and we'll be doing more as we move forward. 

They also added three new quality measures to the PQRS as we refer to it.  The Physician Quality Reporting System was actually rolled out in 2013, but it was a voluntary program.  What happened was they told pathologists and pathology groups and laboratories, if you keep track of statistics on breast cancers and send them to us, at the end of the year we will give you a bonus for doing that.  So it was not required and you did not lose money.  Well in 2015, they changed it and added lung biopsy, lung resection, melanomas as well as keeping the breast cancers.  So participation in a 2015 PQRS now became mandatory.  Those of you have all missed calls that did not participate in 2015 and send in those statistics, your payment will be affected this year and reduced by Medicare.  This is a, if I take back to the slide where I talked about value base penalties and incentives, this is a value thing to have these statistics for these different types of cancers, but there's going to be penalties if you do not participate.

And the other thing they announced in January 2015 is that by 2016 they wanted to have 30% of all fee-for-service payments changed to alternative methods of value and bundled pricing, and 50% by 2018.  So we're into it now, if things don't change, we should and by 2018 half of the work that we do in our labs will not be fee-for-service based.  They also are looking at things like they came out with the rule that hospital owned surgery centers were going to get one bundled payment similar to the DRG payments for inpatients.  This is another example of bundling and then everybody would get a piece of that pie from the one payment.

So 2016 was a good year actually.  We had lobbyists from College of American Pathologists that lobbied CMS to have the 88342 and 88341 have the same reimbursement.  As you all know, it is the same amount of work.  It's on different blocks, it's the same amount of reagents are used on both.  Originally in 2015 when they added the code, they only made it 40% of the dollar value of the 88342.  So in '16, they were able to get it raised by compromised to 70% of that value.  This gave us the 8% overall increase in IHC revenue because we do a lot of those additional antibodies as you all know.  And the prostate code that they talked about in the year before, they did reduce it on the technical component side by 17%.

In 2016 about the middle of the year, we started getting some reports, our labs started getting some reports from this company eGlobalTech.  CMS has contracted with this company to provide comparative billing reports for laboratories and physician groups.  And it compares your lab to the peers in your state and in the U.S.  The 2016 report was on GI biopsies, including special stains and IHCs.  What the report said, it gave you the total number of GI biopsies that Medicare paid your laboratory for and what was the percent of those biopsies that had special stains and what was the percent that had IHC.  And then they compared it to your peers and the results were either does not exceed your peers; higher but not significantly higher; or significantly higher.  And they, a copy into this, this came with a letter that said that you--this was only for your information, it was to allow you to know if you were ordering more specials and more IHC on GI biopsies than your peers in your region and the U.S. 

So also in 2016, CMS let us know that what they consider as overvalued so we could expect to see cuts in 2017 were cytology, flow cytometry, consultations, and tumor IHC.  And we'll talk about that, what really have those cuts turned into a little bit later. 

Protecting Access to Medicare Act

I want to spend some time on the next part of this slide because it's near and dear to our hearts right now.  This is the Protecting Access to Medicare Act, and the reason I say it's near and dear is because we're right in the middle of our first reporting period.  This Act was passed in 2014 and is part of the Social Security Act, and it requires revisions to the clinical diagnosed lab test under the clinical lab C schedule.  They are targeting a 1% reduction in all Medicare payments.  Now the new C schedule at the time the law came out was to come out in January of this year.  There was the public outcry because they didn’t know labs weren't aware of it till 2015 when they were supposed to begin collecting data.  It has a large administrating burden attached to it, so CMS agreed to delay this for one year, so the new C schedule is going to come out in January of 2018. 

What happens is the rules state that every three year there will be a specific data collection period of six months.  The first one was January through June, of last year.  Then there will be a three month reporting period that gives the labs time to analyze their data and then report it to CMS.  If they are qualified as a lab to do this, they can be penalized up to $10,000 a day or for not doing it.  Now the rule also says that they can't, because we’re expecting cuts, and this is a concern for January of next year, the rule has reduction limits.  The first year they can only cut 10%, and they can only cut 15% in three years.  So if the schedule comes out in 2018 and there's a code that they think is overvalued and they cut it, they can only cut it 10%, and they can cut 5% the following year, but then they would have to wait till the fourth year to cut it again. 

What they're trying to do is what the information you have to submit is all the private payers.  What Medicare wants to see is they want to make sure they are not paying more for reimbursement than the average medium of all of the private payers which is going to be the insurance companies, the Medicare replacement plans, and Medicaid.  So this is a lot of data for labs to collect and hopefully the ones that are expected to collect it have done it.  I have been getting e-mails and calls from customers especially neat the end of the year last year like oh my goodness, we need to get this done and right away and what's going to happen if we don't and do we qualify.  There are labs that are exempt and this is very important.  If during the reporting period you collected less than $12,500 from the clinical lab C schedule and the physician's C schedule, and it's based on the MPI number, unless 50% of your revenue was Medicare then you do not have to file with this Act.  The purpose of this was to eliminate most of the small physician office labs and independent laboratories because it's a large administrative burden and these small labs simply do not have the resources to collect and scrub this data.  So this rule they think will eliminate about 95% of the physician office labs, and about 50% of the independent laboratories.  Now that being said, the other 50% of independent laboratories, because they're all large independent laboratories, they cover about 90% of the reimbursements that Medicare pay to independent labs, and the same could be said for the physician office labs.  So they will still be able to capture the large labs but they wanted to give a break to the smaller labs.  This has been very confusing for labs to know if they qualify or didn’t qualify to do this.

In October 2016... the proposal came out for 2017 and what they did was they took the cuts again on the technical component side.  Another 17% on 88305, this is going to be really hurt I think.  So now when we look at the 88305 it's going to be $29.34 on the technical component for 2017, professional components raised to $39.71 so the global reimbursement is $69.05 which that began this month.  They also took 19% out of the 88307 and 88309 which are complex cases, more complex than the biopsies.  Now the reason on the technical components on the 88305, 88307 and 88309 as well as they took another 19% cut on the technical component of prostate biopsies, they stated in the ruling that it was because histology supplies have gone down in cost and they especially named eosin as being one of the suppliers that had been greatly reduced so that's why they were able to recommend these cuts.  They are taking 19% out of all the flow cytometry CPT codes.  They did however increase the 88361, that's the computer assisted tumor IHC, about 7%, and they also increased consults, outside consults.  So the professional component was raised and the technical component was once again lowered.  So globally, it's not that much of a change from 2013 when you look at the chart above, but when you look at the technical components, it's a big hit.

So this just started this month, so we really haven't seen the collections come in or the billing.  That's where we are now.  So I think it's usually, it will be probably March and we'll have a feel for what kind of effect this is going to have on our laboratories, and again it depends on your patient mix and the type of work that you do so every lab will be different.

What do we see next? 

That's interesting because as far as CMS is concerned, they say they're going to continue to focus on increased quality with decreased cost.  So we know as we stand right now, we have a lot more people in the insurance so we should actually increase overall in our business, but we're going to be paid less for each test that we do.  But we also have a new administration in Washington, so where that leads us, we'll take it day by day and see what goes with that and be prepared for whatever changes come down the road. 

I know they're saying they're going to repeal the Affordable Care Act, but then I hear it's not going to be repealed for all parts of it, so we'll have to wait and see if we’re affected or not and if we are in what way. 

CMS has said they are going to continue to push down on reimbursement on what they feel overutilized and overvalued tests, and the way they do that is by lowering reimbursement for CPT code and then by bundling. 

What can you do? 

Stay abreast of current changes that affect the AP market.  Adapt and be prepared when these changes toll out.  I can't stress that enough, I think it's the most important thing that you can do.  You have to be proactive, and to be successful in this market in your laboratory.  You need to know your business.  Where does your revenue stream come from?  Do you have more Medicare work than non-Medicare work?  How's this going to affect you in your business model?  Know your cost per test.  I travel all over the country all year long, and I can't tell you that at least 90% of the people I talk to and I always ask when I’m doing presentations, how many know their cost per test, and the answer is very few.  You can't strive to improve your processes and reduce your cost per test if you don’t have a baseline to start with.  I tell customers the simplest way is if you have access to your operating expenses, divided it by the number of CPT codes for that period.  If monthly, what were your expenses for the month, divide it by the number of CPT codes billed and that’s your average cost per test across your laboratory. 

Now if you have the resources, I'd like to break it down into primary histology, and an IHC or advance histology which would cover IHC and any molecular test you might be doing because there's a big difference in the cost of a primary test and the cost of some of these advanced tests.  So that way, you can have a better feel, you get higher costs on the IHC molecular side but you get higher reimbursement.  So it gives you a real good feel for where you are, where your costs are, and will help you move to the next step.  And you need to focus on improving quality because well, it's always good to focus on improving quality, I'm a big proponent of that.  But it's also going to be required that when you focus on improving quality and we have the mechanisms to document that we are doing that.  We need to improve efficiencies, reduce errors, and improve patient safety. 

Summary

Just to summarize, all areas of healthcare in the U.S. are changing.  Every aspect of our business is being affected.  We are all in this together and we need to work together to increase the efficiencies, reduce cost, and improve quality.  It's no longer just a simple goal in our laboratories; it's what we need to do to be successful.  And at the end of the day if we do all that, we are also improving patient care.

So I want to talk a little bit about references.  I put this up here because everything in this presentation comes from the CMS website.  I can't tell you enough that you need to get on there, you can find out all the information you need to know that pertains to your laboratory on the website.  And they have newsletters, and they have questions and answers, you can find they have fact sheets, everything that pertains to you in your particular region and any of the LCDs that would affect pathology.  So please, take the time to go there and research and it will beneficial. 

I want to thank you for joining us today, and I really wish you success in your business and in your laboratory.  And I hope we have some questions.  We have time for questions?

 

Questions and answers

MODERATOR:  We do have time for questions, and Loretta that was a fantastic presentation.  Tons of information, I learned a lot, a lot lot, so thank you for that.  By the way, Susanna has put that link into the chat box, that long link that some of you have probably been trying desperately to write down with 100% accuracy.  Don’t worry about that, you can copy and paste the link from the chat box to get to that website that Loretta was just talking about. 

So let's move to our first questions, Loretta.  Let you get a drink of water while I read.  If the Affordable... by the way I just, I was to read a chat here that says thank you for the excellent presentation, this was one of the best presentations I've heard.  And she asks if you'll conduct a workshop at CAP, just a suggestion, but do you speak at CAP or will you?  Are you familiar with it?

MS. SAYLES:  I haven't but I would be glad to.  I always... I'm asked to do this at the National Society for Histotechnology, but I would love to do it at CAP.

MODERATOR:  Well, let's you and I chat after this and see if we can--I’ll put you in touch with the right people if you need that.  So moving on to our first question.  If the Affordable Care Act is repealed, this is a tough question and you did talk a little bit about this, but if it is repealed, how will our current reimbursement be affected?

MS. SAYLES:  Well of course that’s a million dollar question and I’m sure one everybody's asking but I can tell you that CMS is really working diligently to not let all the changes that they have made over the last four years be lost.  They feel they've come a long way.  They have been sending letters, public letter to Congress to whatever changes they make to the Healthcare Act that they don't change the things that CMS has done as far as reimbursement because I would really be surprised personally, it could happen, but we have to have some way to cut the cost.  As you saw the spending was not sustainable so they've come a long way.  Not that we're always happy about how they've done it, but I would be very surprised if they just flip the switch and we went back to doing things the old way.  I just don’t see that happening.

MODERATOR:  Okay, good, thank you.  That's... that is the mystery that will be solved I guess pretty soon?  And then next question follows in line with this.  What do you think will happen to PAMA under the new administration?

MS. SAYLES:  Well that's interesting because it's not, this Act is not part of the Affordable Care Act, it's part of the Social Security Act so I don't anticipate it going anywhere.  But now that's not to say but it's certainly not part of the Affordable Care Act; it's part of the Social Security Act, so I don’t think they're talking about changing that yet.  Not to say they won't, but currently I wouldn't think we would be affected so that reporting period is March 31st, everything needs to be in.  So I would suggest everyone that have collected that data that they scrub it and make sure they are accurate when they send it in. 

MODERATOR:  Okay, thank you.  I will see how your crystal ball works over the next few months.

MS. SAYLES:  Yeah.

MODERATOR:  And the next question, I'll lead with a comment.  Thank you so much for this informative webinar and the timing couldn’t be better.  My question is, is there a correlation between discontinued antibodies and the reimbursement for immunotests?

MS. SAYLES:  I actually don't have the answer to that off the top of my head.  So what was that again, the correlations for...

MODERATOR:  Between discontinued antibodies and the reimbursement for immunotests.

MS. SAYLES:  I don't have that off, but I will do some research on it if that person would like for me to contact them by e-mail I'd be glad to do that.

MODERATOR:  Okay.  I will--let me put a note here.  That was the sound of me typing a reminder. 

Next question for you Loretta is, what recommendation do you have for billing all the requests for niche molecular genetic test labs that are popping up everywhere and being requested of us by oncologists?  Should this only be allowed on outpatients and/or have the niche lab do the billing?

MS. SAYLES:  This is another one that I don’t have the answer for.  I think that again no one seems to have the answer.  I've heard it asked many times, and there is not clear picture and from what I’m hearing the reimbursement has not been consistent.  There is a lot on the CMS website, I would refer you to that area because molecular is not my expertise.  But I think there's been a lot on there on the CMS website and I think a lot of it is going to come down to what I call those local coverage determinations.  There is some information about the fact that many of these tests are new, there are no guides, like there's no way for CMS to determine what the value should be for these codes on these new tests.  What they normally do when a new test is added, they use a method called crosswalking, and that's where they temporarily set a code for the first year based on similar codes or similar tests that have similar costs and that's kind of how that number is determined because they just don’t have an idea of the brand new technology which some of these molecular tests are.  But some of the tests are so new and so different that they can't use the crosswalk method and they go to what's called a fill gap method and I think that's more like guessing where they need to be, it's more difficult.  But from what I've heard was people that are trying to bill a lot of these tests, it's very frustrating, there's some test that might not get paid at all and it takes a long time to get paid because they’re on the local bases in each of the regions trying to do these crosswalk and gap filled methods to determine what the reimbursement should be.

MODERATOR:  Okay, excellent.  Thank you.  Some more very good questions coming up here.  Here's one even I can answer.  Outstanding presentation; will we get a copy of this?  As always the recording will be available on the Pathology Leaders website in the archives section, and Susanna will be putting that link into the chat box shortly here.  So copy and paste that and you can review the recording at any time of course with the slides. 

Next question.  When, she's just put it into the chat box, thanks Sus.  When consults are requested of us, post discharge of patients, can we bill and get... can we bill and will we get paid?  Also do we enter DOS as the data of the consult requested vs blocked DOS?  So the first question when consults are requested of us, post discharge of patient, can we bill and will we get paid?

MS. SAYLES:  And my understanding is there's a time limit on it.  The last I heard, and again I suggest you check your local region because they could be different regionally, but I know, I think in our region it's five days after discharge, so you can't go back three months and then try to bill it.  That's first part of the question.  And what's the second?

MODERATOR:  The second is, do we enter DOS as date the consult is requested vs block DOS?

MS. SAYLES:  It's my understanding it would be the date requested of the consult.

MODERATOR:  Okay.  And there's a very nice comment here.  Let's move to the next one.  Can anyone request the data from eGlobalTech?

MS. SAYLES:  I don't know; that's a good question.  I would imagine they could.  I don’t know if they send it out.  I assume they send it out to everyone but maybe they didn't.  I have had a few clients that called me about it, and I saw theirs, but I assume that it was going to be going to everyone, but since it was the first time it went out it could have just gone to the southeast region where I have the live.

MODERATOR:  Okay, thank you.  Next is, it just came in so I’m kind of glancing over it really quickly, sorry.  The next question is, again, thanks, every question starts with thanks for a great presentation.  Very informative for us over the pond over in England who hear so much about Medicare and Medicaid, and do not really understand what it all means.  It makes things clearer but seems it's going to be tough making any profit in the anatomical pathology lab.  Not really a question, but more of a comment.

MS. SAYLES:  Well, my feeling is that you can, and labs do, but you really have to pay attention.  In the old days we made a lot of profit and I don’t think labs were necessarily had to be run that well.  But I think now you need to be run like a business, and you need to know your business and where your revenue comes from, and what you can do by reducing your cost and growing your revenue.  So it's certainly labs are successful and I have clients they are very successful but they've also learned how to change the way they operate.

MODERATOR:  Yeah, and hopefully the tech costs will continue to come down because that seems to be where it's cutting from your presentation.

MS. SAYLES:  Right.  And I think that's why we're seeing a lot of consolidation in this country.  A few labs have gone out of business, small labs that especially just depended upon the biopsy CPT code for survival, couldn't survive under the new changes.  But for the most part what labs are doing, are they consolidating and partnering with other labs to consolidate their costs and get those revenues, increase revenue efficiency.

MODERATOR:  Okay, wonderful.  Thank you very much.  And we have time for two more quick questions.  Is Medicare reimbursement the same in all areas of the U.S.?

MS. SAYLES:  No, it is not.  It's becoming more and more dependent upon what region you live in.  First there's the geographic cost of living factor that's put into the formula for the original Medicare reimbursement.  And then secondly because each region has been given more authority to say we're not going to pay for this, and we're not going to pay for that or we’re going to bundle this, so if it's not covered under a national rule or national what we call NCD, National Coverage Determination, then each region has the ability to set their own rules.  So it is going to be different everywhere which is why I stress, really stress that you know what your region is, and if you go on the website you can find every rule that pertains to pathology within your region.

MODERATOR:  Excellent.  And our last question is can you give us an example of bundled or quality based payments in pathology?

MS. SAYLES:  Well, as we talked about prostates we're the first one, and it's a big change because it's a big difference in being able to bill for 88305 times 12 for 12 specimens on one patient, and being able to bill one CTP code of G0416 no matter how many specimens.  So that's a bundled I think we'll see more of it, and per CPT code in that way.  And then the other way that they’re bundling doesn't really pertain to labs except our lab fee is in it, is the fact that if they take hospital surgery centers and they give them one fee for doing an endoscopy, and there's biopsies in that, and maybe the biopsies require IHC, all those things, that surgery center is paid one fee and they’re going to have to pay the laboratory for instance for the biopsy portion and the anesthesiologist and all parts that we used to get individual bills to, Medicare would not just get lump sum which would have to be divided between everyone that was involved.  So those are two different types of examples of bundling.

And quality is just I think where they’re going to give us more guidelines which is administrative burden on laboratories and cost associated with that.  But just like the physician's quality management reporting system, we have to report now.  If we don’t report these cancer statistics, you’re going to lose 5% to 6% of your reimbursement next year.

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