In billing, No Surprises and other complexities

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Kurt, do you see any movement among your clients and the people they’re working with toward a better resolution?
Kurt Matthes (Telcor): Absolutely. From procedure to procedure, lab to lab, payer to payer, it’s a nonstandard process. Automating it can be difficult because of the variability across scenarios. Anyone who tells you they’ve solved the problem is not aware of the reality of the process labs deal with. That doesn’t mean there aren’t opportunities to improve the process. You can provide visibility to what’s required and integration options and make workflow easier to respond to situations requiring authorization. There still exists labor for labs and authorization vendors to call a payer or access a website. True automation and a true resolution are yet to be seen. I’ve heard that pharmacy solved this a long time ago. With laboratory, our industry is not there yet.

Pathology practices are consolidating and getting bigger, and systems are employing pathologists to a greater extent than we’ve seen before. Tom, is there a silver lining in the sense that once a large health system has integrated pathology, the system can then help with billing and collection problems? Or is that a pipe dream?
Tom Scheanwald (APS Medical): I don’t see how pulling it in and having a health system perform billing and collection functions will solve the problem. All of this gets lost in a big health system.

There’s consolidation because pathologists in smaller practices are retiring and practices can’t find replacements. There’s a shortage of pathologists, particularly in areas of the country where it may not be popular to live. Digital pathology and telehealth will come in big with pathology and change what we do today. Everyone has clients who are working a lot of hours because they don’t have enough staff. I don’t see it getting better in the short term.

We see it at pathology meetings—people who went every year now say they can’t get away, or 90 percent of a department would go to the USCAP meeting and now a significant number stay back to meet the service commitments of the department.
Tom Scheanwald (APS Medical): That’s why I believe the industry will go through fundamental changes over the coming years. The traditional physician who sits at the scope reviewing slides at a desk will change. It will be a model in which telehealth and digital pathology come into play and a group will cover an even broader area.

Matt Zaborski (APS Medical): That model is successful in teleradiology. The groundwork is there.

Harley, have you seen any positive effects of the new CPT codes for digital pathology?
Harley Ross (XiFin): We have not seen the traction. It is being viewed only from a data collection perspective rather than a reimbursement perspective until they get to the point of allowing it to occur. I’m in Tom’s camp; the industry will have to change and there needs to be a macro event. We might be there—interest rates, inflation, workforce readiness, and the aging-out issue might be the driving forces that get us across the finish line. Until they start materially reimbursing for digital pathology, we’re seeing a little adoption but not enough to move the needle.

Zaborski

Tom, what’s your opinion?
Tom Scheanwald (APS Medical): How fast it goes will be a function of supply and demand, and that will fall primarily on the number of pathologists available. At the same time, revenues will continue to decrease because of how the fee schedules are set up and the way commercial carriers follow Medicare’s fee schedule. The Medicare fee schedule has seen consistent downward pressure for years. PAMA cuts have been put off, but they can be enacted at any time. The physician fee schedule continues to go down, so revenues will continue to decline. There’s no permanent solution to any of this.

Matt Zaborski (APS Medical): We’re seeing a snowball effect, like we did with the sustainable growth rate. Year after year it hung over everybody’s head and eventually they had to repeal and replace it. It’s kind of where we are with the conversion factor; we’re heading down the same road.

Kurt, as you listen to this, what advice would you give to your clients at the moment?
Kurt Matthes (Telcor): A lot of our clients are looking at growing their business through acquisition. The digital pathology landscape is still a question mark in my opinion. I agree with the comments about the pressure from an aging population and downward reimbursement—at some point something will push digital pathology toward wider adoption. Is that five, 10, 20 years? It’s hard to say. Groups are watching and waiting for the trends to present themselves.

Suren, what are your thoughts on this?
Suren Avunjian (LigoLab): Pathologist burnout is another variable to consider. With over 1,000 pathologist job openings on the market and only 500 or so entering the workforce each year, practicing pathologists are overburdened with case volumes, and the burnout rate is among the highest in the medical field. More than 35 percent of pathologists have reported burnout. Simplifying pathologists’ daily work as much as possible and adding automation to remove the redundant steps and clicks can make a significant impact on productivity and job satisfaction. AI and digitalization of the slides and workflow will help relieve the staffing shortages.

In the past few months, most of our new clients have been implementing a digital pathology system up front. From demos to implementation, the topic has heated up. About 80 percent of the pathology labs we partner with require digital pathology integration. Three years ago it would have been a surprise to hear about digital pathology integrations in the prospecting stage; the entire concept was on the periphery. Now it has flipped. It’s something to watch for—we can see the adoption picking up.

The field has a lot of players who don’t have a central point of contact or even advocacy. Billing vendors work with individual pathology practices and labs. Those practices and labs don’t necessarily coalesce, where all the participants—IT companies, billing companies, tech companies, and the labs themselves—get together. It strikes me that that’s a fundamental reason why we have oftentimes dire-seeming prospects for the future; there’s no unity as the field approaches payers or regulatory agencies. Would you agree with that, Harley?
Harley Ross (XiFin): I absolutely agree. One of the greatest challenges the lab market faces is becoming unified. The interesting part about this is the shifting paradigm in health care. Using the pandemic as an example, we saw more vaccinations and testing done within pharmacies. I think laboratories need to partner with other specialties, hospital associations, and pharmacies to help drive the next level. If we look at our acquisitions in pharmacy with some of the big retail players, you start to see the paradigm shift; it’s going into a distributed health care model. So laboratories need to partner with other verticals, other provider types.

Kurt, what’s your feeling about this direction of greater, stronger partnerships?
Kurt Matthes (Telcor): It’s needed. There are so many nonstandard hoops that labs have to jump through, and having a playing field that everyone can agree on and adhere to would be a huge benefit. From a vendor perspective, it’s one thing to be nimble with integration points and how you communicate and work with data exchange, but it’s another when you have to do that 20 different ways for 20 payers or 20 other vendors in the industry. It gets to the point of saying, Let’s stop this and come to the table, talk about it, and figure out how best to do this. But it doesn’t seem like everyone is ready to engage in that conversation.

Suren, it seems everyone is in the same boat. We have an aging population across the board. Hospital and health systems’ IT department vacancy rates are high. It’s hard to talk about partnership when people are too busy to do anything else. Do you see some of that?
Suren Avunjian (LigoLab): Yes. Before I co-founded LigoLab, I worked at a private laboratory, and we expanded our IT department out of necessity and essentially became a software company within the laboratory. This goes back about 22 years when end-to-end solutions didn’t exist and we had to build, license, and integrate many solutions. The lesson we learned is that the most successful laboratories have to transform into technology companies. We took the tough route and tried to build as much as we could in-house, but at some point the cost of development and scope of the implementation got exponentially more complex going from innovation to maintenance mode. These days there are information system partners who can help with this transformation. You have to choose your battles and select partners wisely because if you’re going to be a great lab, it will be hard to also be an exceptional software company at the same time.

Scheanwald

Tom and Matt, to some degree there needs to be greater cohesion, with more parties in agreement while marching in one direction. Do you agree?
Tom Scheanwald (APS Medical): I do. Partnerships are critical. Everyone has to work together to accomplish that goal. And I think everyone is trying to but, like you said, everyone’s plate is full. You can’t call someone and say, “I need you to drop everything you’re doing now and do this for me.” You can’t even do it in your own company because there are many priorities at the same time. I don’t know what the answer is, but partnerships and working together are critical.

Matt Zaborski (APS Medical): Everybody is competing for the same resources, on the payer and physician side. The more strategic partnerships, the greater the strength. I was at the Florida Society of Pathologists Conference in February and saw a pathologist medical and lab director who was on his way to Washington to do a little lobbying. He said there are 50 people for the payer standing there all day, every day, and he can get there only once a month. You have to work with people who see things the same way and have the same goals if you’re going to make progress.

We have a different economy in the United States than we did a year ago. Are the general business environment and higher interest rates affecting your business, Kurt?
Kurt Matthes (Telcor): It affects every business. It’s determining the right strategy for how you continue to engage with your customers and their needs to keep your relationship equitable and profitable. The pressure of goods and services being inflated makes that interaction more intricate. Customers and vendors are trying to find ways to be more efficient. The competition for human resources is real everywhere, not just in our industry. Even if inflation comes down, the other reimbursement pressures aren’t going away.

Harley, how is the economic environment affecting XiFin and its customers?
Harley Ross (XiFin): We’re not immune to this, and part of that is because you can’t get enough good people—it’s not just about retaining them. All these forces are coming together. It’s a hard business world to navigate at this moment. Laboratories already had other pressures, and now there’s larger macroeconomics they can’t control. You have to be savvy with your strategy, do more with less, and that’s not going away anytime soon.