How Will The Bundle Change Lab Service?
Copyright 2011 by Virgo Publishing.
http://www.renalbusiness.com/Posted on: 01/12/2011
The “bundle” may have a goofy name, but this new system cannot be ignored. Starting in January 2011, the bundle will transform the way everything is being paid for in dialysis, including laboratory services. In what ways will the delivery of labs change and what strategies should clinics and lab companies implement to deal with the new payment paradigm? Three industry experts offer advice to Renal Business Today readers on this topic.
According to Mike Burney, CEO of RenaLab, lab operators will need to help their centers minimize lab costs as well as give them all information needed to fully take care of the patient, all within bundle guidelines. Communication is necessary. "This has enabled us to partner with our clients to understand and prepare for the challenges and opportunities that we see ahead with the new bundling environment," Burney said.
Quality of lab delivery will not be compromised, Burney predicts. "The quality delivery of lab results will continue and will not be affected by the bundling system," he said. "The only change that we have seen has been a positive one, in that it has enabled us the ability to interact with our centers more during this transition. This is the biggest change that our industry has seen in 30 years, and we are all approaching it and preparing together."
Paul Beyer, CEO of Satellite Laboratory Services, LLC, said he does not expect any changes at Satellite regarding delivery of timely, quality lab results. "Our clients depend on us to help them run efficiently, and their quality patient care depends upon our reliability as a laboratory," Beyer said. "Our turnaround time for most tests is 24 hours, and our clients map workflow around this. Planning for patients and having results back so that their own workflow is not impeded is critical for the efficiency of our clients’ operations."
Efficiency in every aspect of the laboratory and dialysis clinic business will be more critical post bundle than ever before. "Statistics show that the number of people in the United States on dialysis is approximately 400,000, and increasing every year. This translates to increased patient loads," Beyer said. "The cost pressures of bundling makes running an efficient dialysis clinic more important. Our efficiency directly relates to the efficiency of our clients."
The bundle isn't exactly a ball of fun, especially since dialysis patients using Medicare can expect to see a 1.2 percent increase in their co-insurance payments largely due to the inclusion of laboratory tests into the new end-stage renal disease payment bundle, according to an analysis by the Centers for Medicare & Medicaid Services.
“The patient’s share of costs is likely to increase for most everybody because the 20 percent coinsurance for the bundle compared to the composite rate they pay now is going to be more because there are more services in the bundle,” said Tonya Saffer, deputy director, Dialysis Patient Citizens, in a September 2010 article for Renal Business Today. “For patients, who have a higher than average utilization of previously separately billable items like ESAs, CMS has theorized that there is a chance that overall their coinsurance or co-pays could be lower.”
Under the current system, Medicare beneficiaries on dialysis pay 20 percent of the dialysis base payment plus 20 percent of ESRD-related separately billable drugs, such as Epogen, the article stated. However, patients currently do not pay co-insurance on separately billable lab tests.
The new ESRD Prospective Payment System, which was released in July 2010, bundles separately billable drugs, labs and the existing payments for dialysis services into one payment per treatment. CMS will pay for 80 percent of each treatment and patients will be responsible for the remaining 20 percent. That's the patient consequence. What about the clinics?
How Dialysis Providers Should Handle Labs
Bundling will require more work to track and bill labs, plain and simple. There will be more effort needed as any change brings added responsibility and the requirement to adapt, Burney said. "Dialysis providers will now have laboratory charges on their claims, and will now have some of the billing complexities that labs had in the past," he said. "But no matter what, their patients will still get the same quality of care."
Olivier Gindraux, CFO of Satellite Laboratory Services, LLC, theorizes that billing will be a major change for clients. "There will be more work for facilities to track, account for and bill for labs," Gindraux said. "For instance, effective Jan. 1, 2011, tests must be designated by the physician as ESRD-related or not, and this designation determines billing and payment flow. There will be an admin burden that did not exist pre-bundling that directly affects how labs are submitted for payment for Medicare/Medicaid patients as a result. And importantly, clinics will now receive payment from CMS for Medicare/Medicaid patients, not the laboroatory, so the flow of payments will be something that is new for them. In this sense, it is not enough to just handle billing. Revenue management is also required."
Satellite currently performs a significant number of tasks to facilitate billing, according to Gindraux. His team recognized the eventual potential administrative burden to clients and the need for revenue management, and has responded with three initiatives.
First, Satellite modified its billing software system to provide clients with information CMS requires in order to bill and substantiate to CMS and insurers. Second, the company established a Bundling Support Team to work directly with clients on billing and CMS-related questions. Lastly, to assist with revenue management, the team developed laboratory test cost, utilization and control tools called LabCheck Analytics and LabCheck Formulary. These tools are meant to serve as bundling calculators and remove worry from the new model. They allow clients to see their ordering patterns, assess them within the framework of the new bundled payment system, understand duplication and lock in test menus to control costs. Satellite reported "tremendous interest and uptake" in these resources.
Ultimately, laboratory costs directly correlate to test utilization, according to Beyer. "If more tests are ordered, costs increase, as with anything else," he said. "Up until now, dialysis clinics did not need to be mindful of test utilization patterns, because CMS/Medicare paid the bulk of the cost. The new bundled payment system puts all dialysis clinics in the position of not only having to be cognizant of their test utilization, but being able to control it."
The impact has yet to play out, given that physicians and nephrologists order the actual tests, for which the clinics are then responsible for paying, Beyer said. Whether tests are part of the bundle is another administrative and payment flow consideration.
"Billing management and revenue management are together becoming requirements for efficient dialysis clinics," Gindraux said.
CMS has put a great deal of effort in determining which labs need to be included in the bundle, according to Burney. "They have worked to create a model that includes the proper tests and costs for those tests," he said. "Now dialysis centers have been given the responsibility for monitoring the utilization in order to keep costs down."
Software and Web-Based Applications
There will be more of a reliance on software and other Web-based applications to deal with labs, some people believe. Beyer, for instance, said efficiency and excellent care need to coexist in new, more demanding ways, and that electronic ordering, reporting, and the automation of admin tasks will become more important as clinics move to the new bundled payment model. Paper-based clinics may have to become electronic. "The complexities of the new bundled payment system require an electronic system for ordering, reporting and understanding test utilization," Beyer said. "And of course billing."
For clinics already using an electronic ordering and reporting system, a gap still remains with understanding and controlling test utilization, Beyer believes. "Clinics understand that test cost is based on utilization," he said. "Understanding and quantifying test utilization enables them to deliver excellent patient care, while controlling costs."
Burney is a firm advocate of electronic solutions. "It is very important to have Web-based services as it enables everyone to get information easier and faster," he said. "This was the case prior to bundling, and will continue to be relevant after Jan. 1, 2011."
Standard of Care
The bundle brings big changes, all with the goal of improving systems by getting rid of old ones. Will the metaphorical baby be thrown out with the bath water though? Will any aspects of lab care be compromised as a result of the bundle? It's too early to know, Beyer claims, but people are wondering. "We see a definite concern among our clients with balancing care and cost," Beyer said. "This goes beyond just laboratory costs however. Laboratory testing comprises just 3-4 percent of the total cost of dialysis treatment, but it greatly influences the course for treatment. The remaining 96 percent is for drugs and treatment, the bulk of our clients’ cost."
According to Burney, it will remain the responsibility of the physician to order any and all tests needed in order to provide proper care for patients. "They do this currently, and will most certainly continue to do this after the bundle goes into effect, Burney said. "… After January 1, dialysis centers will need to include laboratory collection efforts for lab testing because of the addition of the 20 percent co-insurance. RenaLab does not bill patients directly for lab services."
Future Innovations
Labs have shuffled to respond to the bundle, and that reaction process will keep evolving. Efficiency is the key, according to Beyer. "We are always innovating, in efficiency of our own operation and in delivering value to our clients that save them FTE, time and money," he said. "The more efficient we become, the more efficient our clients can become, translating to cost savings for our clients. We have just launched our second-generation mobile access to LabCheck. Called LabCheck GO! It uses push technology to deliver panic alerts and allows users to access features of LabCheck. Our LabCheck Ordering and Reporting System continues to be the leading system among independent dialysis providers and we are introducing enhancements that are already in test that further streamline operations at the clinical level, reduce error and reduce admin load on staff. It will take time for the industry to stabilize. When we see opportunities to provide efficiencies to our clients, we will act."
As for Gindraux, he agrees that the billing complexities of bundling and the impact on clients have yet to play out. "Ironically, it would be natural to assume that service would be the first thing to suffer when costs must be controlled," he said. "We believe our clients are going to need more service than ever during at least the first six months of 2011, and we are fully prepared to provide it."
The quality and speed of lab results remains vital to patient care, Burney said. He added: "By delivering results in a timely fashion, it enables us the ability to increase connectivity with EMRs, and it gives us the opportunity to remain committed to the importance of a field service organization and personal interaction with all of our clients."
Some answers are still amiss, but that won't stop the bundle. RBT
http://www.renalbusiness.com/articles/2011/01/how-will-the-bundle-change-lab-service.aspx
I Hate Dialysis Message Board
Author
