Billing, business, win, lose: roundtable dives in

In 2020 anything clients had in capital, any projects they were trying to do, were put on hold. They had no idea what was going to happen to their revenue stream; if they were going to upgrade or look at other systems, they stopped it. What we’re thinking now and seeing already and probably will see for Q3, Q4 this year is that people will now invest that money this year that they already had approval for, to upgrade their systems to accommodate all the changes, to make things more efficient, to make specimen-tracking process improvements. It’s like Mick said, they have COVID money and if they’re able to stash some of it aside, it can help smooth out the operation and make it more efficient going forward. We’re already hearing that.

United will be at the forefront of trying to move some of the testing. We’re going to see the scrutiny over molecular tests like we did years ago when it started coming out. Everybody started doing molecular tests because on the fee schedule it looked good, and then Medicare and all the carriers said they weren’t seeing clinical utilization changes and weren’t going to pay for it. What we’re hearing now is, COVID is an emergency, we’re going to pay you, but if it comes down to a lab in every airport for a while, it’s going to go down to $25.

So what are labs doing to reinvest to position themselves knowing that there is going to be more scrutiny on reimbursements? Making themselves more efficient is the answer.

Certainly what Medicare giveth it can also taketh away—that’s almost the entire history of Medicare in the laboratory business as we’ve all experienced it. Kwami Edwards, are you seeing from some of your clients this same interest in making important strategic investments in their operations, perhaps with some of the money realized from COVID testing?
Kwami Edwards (Telcor): First, one additional comment about Optum. It makes sense for them only from the standpoint of when you look at COVID, they didn’t have the best integration in terms of getting patients registered, and using Change probably makes sense for them—so they can be more nimble and do what they need to do.

Labs that have seen an advantage from their COVID testing are already looking at other opportunities to get into other areas now that they can make that investment. If they’re already doing the PCR testing, the question becomes what else can they do. Do they go into wound care? Do they do other things that are out there that, once the pandemic is over, are a more seamless transition?

So we have heard from labs that are making positioning changes for a life without COVID, potentially being able to do other tests by leveraging similar technology. They’re trying to calculate where they are going to be able to get the reimbursement from a payer perspective if they move into these other areas.

Until COVID hit, clinical labs were staring in 2020 at further reductions in payments. They weren’t feeling great about anatomic pathology reimbursement. They were looking at consolidations. Mick Raich, what do you make of this current environment as it may evolve?
Mick Raich (Vachette): You’re right—it’s a different ballgame. We’ve had several projects in which we were looking at merging pathology groups and they all came to a stop with COVID. We anticipate this fall those will probably move forward. And we’ll probably see Medicare come out in July with its proposed fee schedule putting in the cuts that they reduced a little this year.

So things will crank back up by 2022, and I think we’ll be looking at consolidation in pathology groups going forward and then we’ll see further consolidation in the lab world. Strong regional labs will still be players. For other people, once their COVID volume goes away they won’t have much to sell. It’s like you said, it’s not a pretty picture. I think we’ve seen the heyday of revenue for both labs and pathology within the last 10 years and we’ll see it retrograde going forward.

Kyle Fetter, what’s your reaction to that gloomy prediction?
Kyle Fetter (Xifin): If there was anything I was going to be optimistic about it is that maybe there’s some regulatory understanding of what it’s like to have an undercapitalized laboratory industry when a pandemic hits. We are going to be in an endemic world going forward, where specificity around infectious disease is critical, and if you put this infrastructure in place, private or public, there will be knowledge and hopefully enough message spreading through the major lobbying groups to say, do you want to be in the same situation where it takes longer to ramp up than it theoretically could because the industry is undercapitalized and not in a position to respond quickly enough? Everybody did everything they could to get the volume going, but it took longer than it would have if some of these cuts hadn’t come earlier.

And it wasn’t just about cuts; it’s about coverage. UnitedHealthcare is trying to get people to put stuff into a lab test registry that in many cases will circumvent the CPT process. When we get out of this, we will need to understand how to continue to test for the SARS-CoV-2 variants within COVID ongoing, and to identify the difference between patients who have other infectious diseases versus COVID. We can only hope that will be well understood from a regulatory perspective going forward. You cut too much through coverage or rate cuts and you are going to have a big problem.

There are other things that play against the industry—supplies, billing laws, and prior authorization, for which labs need the technological tools that ultimately ensure the right information is received up front and also tells patients what their out-of-pocket will be prior to testing. You have to be able to get that type of technology as early into the process as possible or you’re going to have patients getting bills on the back end they didn’t expect, and we’ve been dealing with that for years. But now there are more state and federal laws about having to disclose estimated out-of-pocket and such early on, especially if you’re out of network. The growing number of prior authorizations is definitely not going to go away.

The only answer is that we have to, as an industry, get closer to patients and physicians early in the process of ordering. You do have the combination of the reimbursement requirements that are changing and the patient disclosure requirements that are changing, but hopefully a greater understanding that while some bad players may get flushed out of COVID, a lot of people had to invest a lot and take a lot of risk to get themselves into a position to be able to service the needs of the pandemic, and we don’t want to put ourselves in a situation again where we’re behind the eight ball on that.

All of you work a lot with pathologists, and we know two things. One is that the pathology workforce is aging to some degree. Certainly we have an aging workforce in the lab overall and that’s leading to some of the labor shortage. We also know pathology is one of the few areas, if not the only area, that’s constantly infusing new blood through new graduates from fellowships and residency programs.

Let’s spend a few minutes giving new pathologists who are entering the workforce some advice. Tom Scheanwald and Matt Zaborski, what would you want to say to a new pathologist going into the workplace for the first time? Something they need to know that they didn’t learn in fellowship or residency.
Tom Scheanwald (APS Medical): A critical piece, and it always has been, is to learn the business of pathology. Learn how it works, how important it is that they do their part in the revenue cycle, how their services are paid for. No time is spent in medical school teaching that, and not that it has to be a long course, but they need to become a student of the business.

They also need to operate and become more adept in working with hospital administration. Pathologists provide a great many services to physicians and the health care community, and we need to be able to advertise that more. It’s only to our advantage to be able to get out there and fully explain what everyone does and the benefit they bring to the community.

Matt Zaborski (APS Medical): For pathology groups to survive, first and foremost they have to hang on to their hospital contracts, and more groups out there are looking to take those contracts off their hands. So it’s important for groups, and for the individual physician coming out of residency, to understand what value they’re adding to the health system, tracking time they spend on tumor boards, time they spend in the clinical lab—anything they’re doing that doesn’t generate billable work. That money is often overlooked by administration when you sit down to negotiate a Part A stipend.

I work with radiology groups, too, and quite a few of them use apps to track their time, and when they sit down with hospital administration, they let them know everything they do for free, in essence. It goes a long way to building that relationship when you have other groups that will come in from out of state and offer to provide clinical lab oversight for the AP volume and the ability to bill the professional component of clinical pathology and not ask for any Part A stipend.

Kwami Edwards, what one or two pieces of key advice would you give to the new pathologist entering the workplace?
Kwami Edwards (Telcor): I agree with the need to learn the business and understand how services are paid for, but also to know what are your costs and how you can leverage technology to collect on the services provided. And use everything at your disposal. As the executive of your pathology group, know what influence you can have so that you collect as much as humanly possible while not spending a lot to get it.

One of the things many were hoping might be a positive outcome of COVID was that hospital administrators would understand they have these entities called laboratories and highly trained, highly qualified physicians called pathologists to help them with exactly the kind of problem COVID is, and a lot of people in labs tell me it was the first time the administrators showed a genuine understanding of what they were doing in the laboratory.

Bob Dowd, do you think this recognition of the lab and pathology will last, and what is your advice for the new pathologist?
Bob Dowd (NovoPath): Yes, a lot of hospital administrators have gained respect for the laboratory as it was able to shift gears like it did and make up for revenue loss from normal AP work.

The administrators were mostly thinking, how am I going to keep my emergency services going? How am I going to accommodate all of the COVID patients? Then the lab starts to do all this. They take it over, they do it, it’s a nice surprise, it’s streamlined, it’s done, there’s money coming in. In a lot of cases that helped the lab administrators. A lot of them gained a new respect, and I think it will be long-standing.

New residents are a little surprised about the coding situation. How they dictate a case, what they do with the case, all that has ramifications on how that case is coded and billed. Some of them don’t come in with a lot of that type of knowledge and how it’s affecting the billing. A coding seminar for some of them would be a big help. They need to understand they’re part of the process. It’s an awareness that needs to be built.

Mick Raich, you’ve been an evangelist for this kind of activity and knowledge gain for pathologists. What would you want to convey to a new pathologist?
Mick Raich (Vachette): I do some speaking with different universities and I do virtual conferences on this, and there are two things I advise. Number one, subspecialize. Don’t be a generalist. Take your time and effort, find something you’d be very good at and, like anything else, if you’re unique and good at one thing, you’re probably going to be more employable and do very well.

Number two, be the tip of the spear. Be out there with the new technology. Get into digital pathology. Work molecular. Don’t be the person who comes in at 10:00 and leaves at 2:00 and doesn’t pay his or her dues and doesn’t understand the business or the technology that’s going to change in the next 10 years. Digital pathology is going to be huge. So when I talk to residents I tell them to learn these things. This is going to be your cash cow as you go forward.

Kyle Fetter, I began with you and I’m going to give you the last word. What is your view of what a new-in-practice pathologist needs to know?
Kyle Fetter (Xifin): Everything that the others have said makes perfect sense. Pathologists need to continue to think of themselves as people who have the ability to find out in-depth things about patients not based off of observation but from bioanalysis, and that’s the future. There’s no question on technology, and as the newer generations come in, some of the aversion to implementing technological platforms is likely to go away. All of the assumptions in the fee schedules are that the lab is automating everything, and that’s why they’re getting cut so much. Payers think overhead is going down. If they think the lab’s throughput is going up because of automation, they’re going to cut the existing reimbursement accordingly. They think technology is always moving ahead faster than rates are getting cut. That’s a core assumption now of every commercial and federal payer.

You also have to position yourselves to be people who specialize in bioanalysis and understand more about looking at things at a cellular level than anyone else. Specialization will be a critical part of that—understanding all of the different disease states within each type of cancer, within different types of infectious diseases. That’s critical. That is the way pathologists need to think of themselves—as the ones who don’t necessarily see the patient but who understand things in terms of biomarkers that other people do not.