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Management of Pathology Practices
Revised: 21 May 2013
Copyright: (c) 2004-2013, PathologyOutlines.com, Inc.
See also Laboratory Administration chapter
The articles below have been written or adapted exclusively for PathologyOutlines.com. They reflect the views of the authors, and not necessarily those of PathologyOutlines.com. Contributors have paid a fee to appear on this page. The Management chapter below is a compilation of information from various sources, including those listed under Primary References.
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Commercial Insurance Plans following the Technical Component (TC) Grandfather Changes, by Mick Raich, Vachette Pathology, posted 21 May 2013
We have found that some independent labs are now seeing commercial payers applying the TC (technical component) Grandfather Clause and the non-payment of the technical component of hospital inpatients and outpatient to these labs. The payers are now using the exact same reasoning as Medicare which presumes the payment for the TC is paid via a DRG, therefore the payer does not need to pay the technical component portion of this global bill. Rest of article
State Guidance Limits EHR Donations, by Leigh Polk, McKesson Revenue Management Solutions, posted 21 May 2013
In an effort designed specifically to promote the development, implementation and utilization of electronic health record (EHR) systems, in 2006 the Centers for Medicare & Medicaid (CMS) and the Office of Inspector General (OIG) announced the creation of new Stark exceptions and anti-kickback safe harbors, permitting certain "suppliers" (including laboratories) to donate information technology used predominantly to create, maintain, transmit or receive EHR. Rest of article
Could This Be the End of Insourced Pathology Billing? by Mick Raich, Vachette Pathology, posted 25 February 2013
The cost for billing your anatomic pathology work just went up. As payments for services decrease, the cost for billing has to decrease equally or the percentage allocated for billing will increase. Look at the facts: Rest of article
A Managed Care Contracting Plan for Independent / Outreach Labs, Or How to stay profitable even if Medicare cuts your rates - Part One, by Mick Raich, Vachette Pathology, posted 15 January 2013
This is a two part series to review the concept of renegotiating or negotiating managed care contracts for independent and outreach labs. Part One will cover the strategy and preparation of this process. Part two will cover implementation and completion of this process. Rest of article
Locum Tenens - Applying it Correctly, by John R. Outlaw, CHC, CHBME, PSA, LLC, posted 12 December 2012
There are two important concepts to understand about locum tenens to understand how to apply it. The first is that the term itself means a "place holder" or someone who fills a role in the absence of someone else. The Latin term actually means "lieutenant" - not as a military rank but in the broader sense of doing the work of someone else or "in lieu of" someone else when the other person is not available to do it himself. Rest of article
Missing Accession Audit Process, by Diana Brooks, PSA, LLC, posted 14 November 2012
A crucial step to optimize collections and avoid leaving money on the table is to verify that all cases performed are submitted for reimbursement. A detailed accession or patient encounter audit process ensures that every case is received and filed with the insurance carrier. This process gives the practice or billing company the ability to track, report, analyze and monitor cases to certify that all claims are billed. The process works on a system of checks and balances- much like a bank account. Rest of article
Coding questions
thyroid FNA / 88172, 88177
sentinel node biopsy / 88311, 88387-88388
Archive of all articles
Billing
Auditing your billing
Stories That Will Curl Your Hair… Or Close To It!, by Michelle Miller, Vachette Pathology, posted 15 March 2011
The Basics of Auditing Your Pathology Billing (III), by Mick Raich, Vachette Pathology, posted 5May05
The Basics of Auditing Your Pathology Billing (II), by Mick Raich, Vachette Pathology, posted 5Jan05
The Basics of Auditing Your Pathology Billing (I), by Mick Raich, Vachette Pathology, posted 20Oct04
Billing-general
Commercial Insurance Plans following the Technical Component (TC) Grandfather Changes, by Mick Raich, Vachette Pathology, posted 21 May 2013
Could This Be the End of Insourced Pathology Billing? by Mick Raich, Vachette Pathology, posted 25 February 2013
A Managed Care Contracting Plan for Independent / Outreach Labs, Or How to stay profitable even if Medicare cuts your rates - Part One, by Mick Raich, Vachette Pathology, posted 15 January 2013
Locum Tenens - Applying it Correctly, by John R. Outlaw, CHC, CHBME, PSA, LLC, posted 12 December 2012
Changes in the Anatomic Pathology Billing World, by Mick Raich, President, Vachette Pathology, posted 14 November 2012
Missing Accession Audit Process, by Diana Brooks, PSA, LLC, posted 14 November 2012
Medicare Changes Enrollment Guidelines From 30 days to 60 days, by Leigh Polk, PSA, LLC, posted 28 July 2012
Thoughts for the New Year (2012), by Mick Raich, Vachette Pathology, posted 26 January 2012
How to Gain a Better Managed Care Contract
for your Independent Laboratory, by Mick Raich, Vachette Pathology, posted 9 September 2011
1993 Medicaid Reform Comes to Florida, by Mick Raich, Vachette Pathology, posted 1 April 2011
10 Questions to Ask Your Prospective Billing Company, by by Diana R. Brooks, PSA, posted 22 November 2010
Revenue as a By-Product of Investment: 6 Factors to Consider When Researching Billing Companies, by Diana R. Brooks, PSA, posted 12 November 2010
Changing Billing Services, by Mick Raich, Vachette Pathology, posted 28Aug10
Pathology Practices: Are Your Payers Paying You Correctly? Are You Sure? Can You Prove It?, by Al H. Sirmon and Stephanie Denham, PSA, posted 3Jun10
How to Utilize Your Billing Reports to Maintain and Grow Market Share. by Leigh Polk, PSA LLC, posted 24Apr10
Another Pay Cut for Pathology Practices and Laboratories, by Mick Raich, Vachette Pathology, posted 15Feb10
Payor Relationship Management Strategies and Trends: A Revenue Cycle Management Perspective, by Leigh Polk, PSA, LLC, posted 31Jan10
Underpayment of Pathology Technical Component, by Mick Raich, Vachette Pathology, posted 20Jan10
How the New Anti-Markup Rules May Change Your Practice, by Michelle Miller and Mick Raich, Vachette Pathology, posted 15May09
Billing Contracts verses Managed Care Contracts, by Mick Raich, Vachette Pathology, posted 20Apr09
The New Year Offerings, by Mick Raich, Vachette Pathology, posted 9Mar09
The Tangled Web of Claim Payments - How Managed Care Contracts Kill Your Revenue, by Mick Raich, Vachette Pathology, posted 4Nov08
Pathology takes another pay cut, by Mick Raich, Vachette Pathology, posted 24Oct08
Collaborative Labs and the Underlying Cost to Pathologists, by Mick Raich, Vachette Pathology, posted 3Sep08
Congress Delays Fee Schedule Cuts 6 Months - Or Not?, by John R. Outlaw, PSA, LLC, posted 1Apr08
Pathology Practice Management Issues for 2008, by Mick Raich, Vachette Pathology, posted 13Jan08
Pricing for Pathology Billing (part 2), by Mick Raich, Vachette Pathology, posted 19Apr07
Pricing for Pathology Billing (part 1), by Mick Raich, Vachette Pathology, posted 5Feb07
A Case Study in Increasing Practice Revenue through Managed Care Negotiations, by Mick Raich, Vachette Pathology, posted 24Jul06
Considerations for Outsourcing Billing Operations, by Pathology Service Associates, LLC, posted 31May06
Critical Strategies for Negotiating Contracts, by Mark S. Daniels, Audit Quality Inc., posted 4May06
Managed Care Payment Shopping, by Mick Raich, Vachette Pathology, posted 23Mar06
What Two Factors Are Critical to Maximizing Revenue?, by Mark S. Daniels and Ken Brodeur, Audit Quality Inc., posted 14Dec05
Are You Using Your Monthly Billing And Collection Reports Effectively? by Al Sirmon, CPA, CEO, Pathology Service Associates, LLC, posted 3Nov04
Coding
2012 ICD-9 Code Changes Bring Significant Changes for Pathology / Lab Coding, by Laura Edgeworth, PSA, LLC, posted 17 October 2011
5010 Billing and ICD10 Coding Conversion, by By Leigh Polk, PSA, LLC, posted 30 June 2011
Coding
Prostate Saturation Biopsies, by Laura Edgeworth, PSA, LLC, posted 27Apr09
Costly Coding and Documentation Errors, by Chappy Manning, RN, CPC, Pathology Service Associates, LLC, posted 5Sep07
Compliance
State Guidance Limits EHR Donations, by Leigh Polk, McKesson Revenue Management Solutions, posted 21 May 2013
Five Simple Steps to Help You Avoid Audit Headaches, by Chappy Manning, PSA, LLC, posted 25 February 2011
FTC "Red Flags" Rule Compliance, by John R. Outlaw, PSA, LLC, posted 15May09
The Case for Compliance: Why You Need an Effective Compliance Program, by John R. Outlaw, CHC, Chief Compliance Officer, PSA, posted 13Feb07
Direct billing / POD labs
Déjà vu all Over Again, by Mick Raich, Vachette Pathology, posted 16 March 2011
CMS Continues
to Tinker with Anti-Markup Rule, POD Labs and In-Office Histology Labs in the
Cross-Hairs, by John Outlaw, PSA, LLC, posted 15Apr09
9.30.2005 - AP Day of Infamy, by Bernie Ness, B J Ness Consulting Group, LLC, posted 17Oct05
The Paradigm Shift in Pathology, by Bernie Ness, B J Ness Consulting Group, LLC, posted 10Mar05
To Bill or Not to Bill, That is The Question (Direct Billing), by Bernie Ness, B J Ness Consulting Group, LLC, posted 26Oct04
Other
Management - general
ACO's, Practice Buy-outs and Déjà vu All over Again, by Mick Raich, Vachette Pathology, posted 9 July 2012
Staying in the Game: Operating Your Practice as a HealthCare Business, by Randal Sanderson, PSA, LLC – A MED3OOO Company, posted 17Dec08
Hospital Outreach Laboratory For Sale. Who’s Buying Now? by Mick Raich, Vachette Pathology, posted 30Nov08
Marketing
Strategies for Growing the Independent Pathology Practice, by Lisa A. Gryscavage, Vachette Pathology Services, posted 29Aug05
The Proactive Patient, by Leigh Polk, Pathology Services Associates, LLC, posted 19Apr05
We Don’t Need Any Sales Representation, Do We? by Bernie Ness, B J Ness Consulting Group, LLC, posted 13Dec04
Pathologist salaries
Pathology Salaries and the Big Picture, by Mick Raich, Vachette Pathology, posted 6 December 2010
Quality improvement
Dissecting the Physician Quality Reporting Initiative (PQRI), by Laura Edgeworth, PSA, LLC, posted 1Apr08
Anatomic Pathology Practices
See also Computer Systems-AP
Future scheduled topics are employment contracts, laboratory operations, malpractice and quality assurance
Table of contents for Management Chapter
Billing terminology: compliance, CPT codes, ICD9, Medicare-Part A, Professional component billing, RBRVS
References: Archives 2004;128:59 (training program for residents)
Billing terminology
Ensuring that testing and billing is in accordance with applicable law
Medicare has two compliance rules for teaching physicians – the CPT code must have a specific modifier for Medicare claims, and physicians must indicate in every medical report that the teaching physician compliance rules were met
References: University of Texas Southwestern
Current procedural terminology (CPT codes)
Five digit codes and descriptive terms for medical services and procedures that physicians perform for payment
CPT codes are owned by the AMA
References: American Medical Association
International Classification of Diseases, 9th revision, Clinical Modification (ICD-9)
Based on the official version of the World Health Organization’s international classification of diseases
Required by law for Medicare, and for all practical purposes, by all medical insurance companies for payment of a claim
Clinician provides a code, as does the pathologist; they may be different (example: clinician-hematuria, pathologist-urothelial carcinoma)
References: list of codes #1; #2
Payments for clinical pathology services rendered by pathologists for services generally, not related to a specific patient specimen
Includes oversight of laboratory, supervising laboratory personnel, reviewing abnormal results, discussion with clinicians
Paid to hospitals by Medicare; hospitals are supposed to pay “reasonable compensation” to pathologists
Professional component billing
Billing a patient for each clinical pathology test/procedure performed for that patient, regardless of whether pathologist performs or reviews the test
Theory is that pathologist does oversight of the laboratory (see Medicare Part A services above), and is entitled to bill patient for these efforts
Resource-based relative value scale (RBRVS)
Standardized physician payment schedule implemented by Medicare in 1992
Payment for a procedure code is calculated as the relative value unit (RVU) multiplied by the conversion factor
The RVU is calculated based on physician work, physician practice expense and the professional liability cost for that procedure code, and each component is adjusted by geographic practice costs
All figures are computed by the federal government
Allows clinicians to charge for pathologist’s services, pay pathologists a discount and keep the difference
Appears to violate Medicare regulations and AMA policy, but still is embraced by many clinicians
Unclear if “pod labs” or other schemes by non-pathologist to bill for pathology services are legal
Marketing your pathology practice
May not appear obvious for pathology practices, but considered necessary by many to (a) keep current clients from switching to other groups, (b) get new clients, either for expansion, or to replace clients that go out of business, get smaller or switch to other groups
References: Archives 1995;119:655
End of Management chapter