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Management of Pathology Practices


Revised: 28 February 2014

Copyright: (c) 2004-2014, 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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The Health Insurance Marketplace and What The Health Exchange Plans Mean for Your Practice, by Ann Lambrix and Mick Raich, Vachette Practice Management / Stark Medical Auditing, posted 28 February 2014
The new Insurance Exchange is up and running, and many practices are wondering how this will affect their bottom line. There are several issues to review when thinking about these Exchanges. In the past, many practices have remained out-of-network with carriers that have lower reimbursement rates due to the ability to obtain higher out-of-network payments. Unfortunately, this will not be the case with the Exchange Plans. Rest of article

Sample Impact Analysis for the 88342 / G0461 changes, by Mick Raich, Vachette Pathology, posted 8 January 2014
The new CMS fee schedule poses some unique challenges for practices. In anticipation of this new fee schedule, we have prepared a sample impact analysis that takes into account both the changes in the 88342 charge and the anticipated 88343 pricing. Rest of article

Ten Ways to Improve Your Requisitions, by Leigh Polk, McKesson Revenue Management Solutions, posted 11 October 2013
In 2012, approximately 50% of calls answered by Patient Service Representatives were related to missing, inaccurate or illegible information from referring physician offices. This resulted in frustrated patients, delayed payments and an unproductive use of resources, which could cause a potential loss of business from referring physicians. Listed below are ten ways to enhance your requisition's effectiveness and capture complete, accurate and legible information, which can also help improve work-flow in your client offices. Rest of article

Thoughts on the Proposed Medicare Fee Schedule, by Mick Raich, Vachette Pathology, posted 2 August 2013
A new proposed Medicare fee schedule has been released and it brings more bad news for pathologists. Medicare is proposing an estimated impact of -5% for the specialty of pathology and a -26% for independent labs. The only other specialty taking a hit this large is radiology. This dire proposal is driven by a decrease on the technical component (TC) for many CPT codes. 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


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
Sample Impact Analysis for the 88342 / G0461 changes by Mick Raich, Vachette Pathology, posted 8 January 2014
Ten Ways to Improve Your Requisitions, by Leigh Polk, McKesson Revenue Management Solutions, posted 11 October 2013
Thoughts on the Proposed Medicare Fee Schedule, by Mick Raich, Vachette Pathology, posted 2 August 2013>
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
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


Compliance
Five Simple Steps to Help You Avoid Audit Headaches, by Chappy Manning, PSA, LLC, posted 25 February 2011

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
Affordable Care Act (Obamacare)
The Health Insurance Marketplace and What The Health Exchange Plans Mean for Your Practice, by Ann Lambrix and Mick Raich, Vachette Practice Management / Stark Medical Auditing, posted 28 February 2014

Management - general
ACO's, Practice Buy-outs and Déjà vu All over Again, by Mick Raich, Vachette Pathology, posted 9 July 2012

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

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


Management chapter
Anatomic Pathology Practices

See also Computer Systems-AP/LIS

Table of contents for Management Chapter

Management-general

Billing terminology: compliance, CPT codes, ICD9, Medicare-Part A, Professional component billing, RBRVS

Client billing, marketing


Management – general

top

References: Archives 2004;128:59 (training program for residents)

 

Billing terminology

top

Compliance

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

 

Current procedural terminology (CPT codes)

top

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)

top

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

 

Medicare - Part A

top

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

top

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)

top

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

 

Client billing

top

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

top

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