Getting paid: policies, pressures, and a power struggle

With the new paradigm comes opportunities. If you were struggling with labor and had attrition during the pandemic, this has opened the doors for you to hire people who aren’t necessarily within your region. Labs can now hire people from across the country.

Chris Condon, we know in the pandemic there was a lot of slow pay regardless of the business you were in. That has to be an incentive for automated billing and following up, does it not?
Chris Condon, VP of client services, APS Medical Billing: Absolutely. You have to find those processes and be able to automate on the front end.

For our large labs, we deal daily with some of the national coverage and local coverage determination denials. We have bad data coming over to us, and we’re not getting it over on the front end. We can help automate and get clean claims out on the front end without having bodies on the back end working manually on denials.

Are you seeing with the carriers any innovation that is helping to meet you halfway in terms of clean claims and processing?
Chris Condon (APS Medical): No. Their job is to figure out ways to not pay pathologists. Kyle is right about the increasing use of CO-252 for additional documentation. They’re trying any trick to make it more intensive for us to get our clients their money.

Janet, what’s your impression of the situation where the incentives are not loaded in the same direction?
Janet Chennault (CompuGroup): The first thing that occurred to me is, are the CO-252 rejections targeted? Or are they being spewed out by some random, let’s-not-pay-the-physician fountain? I would hate to think that sort of thing is still occurring.

Mick Raich, would you like to comment?
Mick Raich, president of revenue cycle management consulting and founder, Vachette Pathology: I see it as a tech war, and it’s going to the artificial intelligence side. We see some billers developing unique AI processes, natural text processing where they can read texts and local coverage determinations. You see it with some companies that offer add-on billing services for the front end. They’ll use AI to make sure the claim is going to be paid correctly. We see it on the back end with denials, and we know several companies that are developing that.

In the next two or three years, the payers are going to use AI to deny claims. They’re going to know which claims are less likely to be appealed when they’re billed. On the biller side, they have to figure out which claims are most likely to be paid when it’s denied. And the winner of that tech war gets to keep the cash temporarily.

Tell us what’s top of mind as you look at the world right now.
Mick Raich (Vachette): The biggest thing I see is the concept of the nine percent pay cuts coming for pathology. If the public health emergency goes away, that will reshuffle the deck and make things interesting for pathologists going forward. We’re going to see an interesting power struggle because there are 700 open pathology jobs. Does this create leverage whereby pathologists can ask for more and get more? Are we going to see the Medicare Part A turnaround?

On the laboratory side, it’s going to be the evolution of COVID and how we continue to bill that. They’re not going to pay for five asympto-matic COVID tests a month. We will have to come to a realization of what’s realistic, and every payer will have their own way of denying that.

Would you care to predict who is going to win this power struggle between the shortage of pathologists and the livelihood of being a pathologist?
Mick Raich (Vachette): You’re going to see it shift back to the pathologists having leverage. No longer will you see a health system hold a pathology group hostage, because pathologists will be able to say there are 700 open jobs and we’ll go work somewhere else. We don’t have to take this pay cut in our Part A; we don’t have to deal with that.

It will be interesting to see how Labcorp deals with the Ascension pathologists. There are a lot of them, and that could be an interesting workforce going forward.

Janet, what’s on your mind as you look at the world now?
Janet Chennault (CompuGroup): COVID will not be the last disease we have to deal with in this fashion, because it is an aspect of nature that somewhere someone has something, and they will probably fly. So we need to strongly endorse having labs in airports, because we need to start having the necessary infrastructure. We need to have the government be able to point to the labs in the airports and say, “Start testing for this. We’ll figure out the payments later. The government will cover it for now.”

Kyle, in the long term, does this not argue for either greater consolidation under a few providers, or even more governmentalization of laboratories? Public health laboratories tend to be underfunded and understaffed. How would you see this emerging, if you were advising an entrepreneurial lab or pathology group?
Kyle Fetter (Xifin): The government taking over or centralizing the laboratory effort in a case like this doesn’t seem to be overly realistic because we struggled with that in California—they claimed there was going to be this great California lab.

What you saw with COVID was a powerful way to do things. The government decided on a price point and within fairly short order there were a ton of companies performing high-quality testing and it was available pretty rapidly. The biggest issue was how many pieces of equipment were available for labs to buy to run the tests. The CLIA process, the local coverage determinations, were fantastic.

You don’t want to have lean or underfunded laboratories that don’t have the equipment or the capability to respond quickly when there’s a public health crisis.

Having laboratories everywhere with high-quality testing capabilities, with laboratory professionals who know what they’re doing, who can figure out a new variant or a new type of disease state quickly and provide test results quickly, is critical. Whether they’re independent or part of a consolidated laboratory network is less important.

Al, you’ve seen many ups and downs over the years. Your thoughts?
Dr. Lui (Innovative Pathology): I think the shortage of pathologists is going to drive more pathologists toward an employment model rather than a partnership model. If there’s a shortage of pathologists and they demand increasingly higher wages and there’s downward pressure on payment per unit, the only way you can shift that to make up for it is to be employed by a health system that can take some of the funds from other areas and shift it to pathologists, because they’ll need to in order to get pathologists to work.

To the comment about high-quality labs springing up during COVID, I would also say there were low-quality labs that popped up. The list of labs that the CMS asked to cease and desist was about 150 long, and some of them were because they were functioning without a CLIA certificate. They were being run by entrepreneurs who saw an opportunity because the difference between what the government was paying and the cost of the test was substantial. Some were naive enough to not even realize they needed a CLIA certificate.

Kurt, give us your impression about what you’ve just heard.
Kurt Matthes (Telcor): As we enter an endemic phase, COVID testing will become more like testing for influenza. Downward pressure for reimbursement is going to be a fact of life as it has been for all the other services laboratories provide. The $100 reimbursement is not going to last long. It will go down, and you’re going to have laboratories offer COVID testing like they do influenza testing, at a relatively inexpensive price. And if there’s another pandemic, it will be rinse and repeat.

Mick, I’m going to change the subject and ask you to put your consultant hat on. In the next few years as we see next-generation sequencing and liquid biopsy increasingly become the diagnostic modalities of choice, what will that do for the billing and reimbursement for cancer diagnostics?
Mick Raich (Vachette): You’ll see a battle again between great medicine and getting paid for great medicine, and that’s the frustration. The insurers will look at this testing and figure out the most economical way to pay or not pay for it.

The beauty of the capitalist system is we’re going to continue to come up with great tests and new ways to look at and do things. We will drive the pricing down and continue to drive diagnostic testing to be more accurate. But there will be a tipping point when the payers say, yes, this is a great test, it does provide great results, but we’re not going to pay you $3,000 for it; we’ll pay $300. We’re already seeing some of that in the molecular world—you see a 27-page denial you have to fill out, and you have to go to the second and third levels, and billers are even changing their pricing to accommodate these denials on bigger, high-dollar tests.

And we’re seeing more preauthorization on that. You’re no longer going to be able to order a $1,500 genetic test and expect it to get paid without preauthorization.

When you go to a cancer center, it’s my experience and impression that a lot of expensive testing is performed and somehow the center is able to offer it. Things like the 360-gene panel or the liquid biopsy, which seem to be where most of academic medicine in cancer care is pointing, seem to be altering the way this field works—not now or in five years but maybe in a decade. Al, can you comment on the idea that there could be a paradigm shift in the mix?
Dr. Lui (Innovative Pathology): I think it’s true. The way it works now, though, is the academic centers developing these huge panels are relatively unconcerned about whether they’re going to get paid for them, because it’s so hard. I don’t know if we’ll get to where you get paid only for something that actually makes a difference. Three-hundred-sixty genes now don’t make a difference. Maybe it will become a little more like toxicology, where it’s only the drugs of interest that would be paid for, as opposed to everything.

Final comments?
Kurt Matthes (Telcor): More will be revealed in the upcoming year, especially around things like the No Surprises Act. PAMA is not too far off. Downward pressure is a reality. We’ll continue to see payers challenge reimbursement, and the laboratories that remain nimble and able to respond quickly in collaboration with their vendors will continue to be successful.

Kyle Fetter (Xifin): Innovation and continuing to move deeper into molecular pathology has to be a focal point for everyone. This is a time to focus on population health, expand your capability and throughput, and look at those increased reimbursement-type procedures.

Mick Raich (Vachette): On the billing side, the pathology group side, or the laboratory side, it’s going to be a simple rule of business: The one who is most effective and works hardest will win.

Tom Scheanwald (APS Medical): We have to be involved at the state and national levels and in efforts that change our pay. We have to get more involved with Congress and in the legislative process in every area.

There’s the situation, for example, with the Merit-based Incentive Payment System. It’s become so difficult to work effectively around that programming—to get a bonus—that it’s become a big burden to a lot of groups.

From a revenue cycle management side, we have to make sure we are taking care of our house. We have to bill and document for everything we do and make sure we get paid at the rates we should.

Dr. Lui (Innovative Pathology): The pharmacies sprang up as the closest thing we have to a public health system, in terms of giving vaccines. They’re able to communicate with each other. For example, you can’t go to a pharmacy to get your medications filled in large quantities and then go to one down the street and have that repeated because they know nationally what prescriptions you’ve filled. So the pharmacy has popped up as a substitute, maybe a poor substitute, for the public health system. That’s been recognized by the pharmacy chains that are beginning to purchase and put in primary care practices and laboratories. Installing clinical laboratories in pharmacies is not a completely new concept, since this was one of the major ambitions of Theranos.

Pharmacies and telemedicine will play a bigger role in primary care. In this environment and in this new kind of system, pathologists and laboratories would do well to think about whether there are roles for them.