Management of Pathology Practices
Last revised 1 April 2008
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The articles below have been written or adapted exclusively for www.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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Congress Delays Fee Schedule Cuts 6 Months - Or Not?, by John R. Outlaw, PSA, LLC, posted 1 April 2008
For the sixth year in a row, Congress has stepped in at the last minute to avert schedule reductions in the Medicare Physician Fee Schedule (MPFS), but unlike the previous five 5 times, the Medicare, Medicaid and SCHIP Extension Act of 2007 only provides for a six-month delay of what had been projected by Medicare as a 10.1% decrease in the 2008 MPFS Conversion Factor. Rest of article
Dissecting the Physician Quality Reporting Initiative (PQRI), by Laura Edgeworth, PSA, LLC, posted 1 April 2008
The pathology industry became eligible for participation in the newest phase of the Centers for Medicare and Medicaid Services (CMS) Physician Quality Reporting Initiative (PQRI) as of January 1, 2008. The overall goal of the program is . . . Rest of article
Pathology Practice Management Issues for 2008, by Mick Raich, Vachette Pathology, posted 13 January 2008
What are the challenges facing pathology practices in 2008? How will your group respond and what will be the outcome? Below are several major issues that need to be reviewed. Rest of article
Archive of past articles
Billing
Auditing your billing
The Basics of Auditing Your Pathology Billing (I), by Mick Raich, Vachette Pathology, posted 20Oct04
The Basics of Auditing Your Pathology Billing (II), by Mick Raich, Vachette Pathology, posted 5Jan05
The Basics of Auditing Your Pathology Billing (III), by Mick Raich, Vachette Pathology, posted 5May05
Billing-general
Are You Using Your Monthly Billing And Collection Reports Effectively? by Al Sirmon, CPA, CEO, Pathology Service Associates, LLC, posted 3Nov04
What Two Factors Are Critical to Maximizing Revenue?, by Mark S. Daniels and Ken Brodeur, Audit Quality Inc., posted 14Dec05
Managed Care Payment Shopping, by Mick Raich, Vachette Pathology, posted 23Mar06
Critical Strategies for Negotiating Contracts, by Mark S. Daniels, Audit Quality Inc., posted 4May 2006
Considerations for Outsourcing Billing Operations, by Pathology Service Associates, LLC, posted 31May06
A Case Study in Increasing Practice Revenue through Managed Care Negotiations, by Mick Raich, Vachette Pathology, posted 24July06
Pricing for Pathology Billing (part 1), by Mick Raich, Vachette Pathology, posted 5 February 2007
Pricing for Pathology Billing (part 2), by Mick Raich, Vachette Pathology, posted 19 April 2007
Costly Coding and Documentation Errors, by Chappy Manning, RN, CPC, Pathology Service Associates, LLC, posted 5 September 2007
Compliance
The Case for Compliance: Why You Need an Effective Compliance Program, by John R. Outlaw, CHC, Chief Compliance Officer, PSA, posted 13 February 2007
Direct billing
To Bill or Not to Bill, That is The Question (Direct Billing), by Bernie Ness, B J Ness Consulting Group, LLC, posted 26Oct04
Marketing
We Don’t Need Any Sales Representation, Do We? by Bernie Ness, B J Ness Consulting Group, LLC, posted 13Dec04
The Paradigm Shift in Pathology, by Bernie Ness, B J Ness Consulting Group, LLC, posted 10Mar05
The Proactive Patient, by Leigh Polk, Pathology Services Associates, LLC, posted 19Apr05
Strategies for Growing the Independent Pathology Practice, by Lisa A. Gryscavage, Vachette Pathology Services, posted 29Aug05
9.30.2005 - AP Day of Infamy, by Bernie Ness, B J Ness Consulting Group, LLC, posted 17Oct05
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
Primary references, management-general
Billing terminology: compliance, CPT codes, ICD9, Medicare-Part A, Professional component billing, RBRVS
Archives of Pathology and Laboratory Medicine (Archives), January 1995 to September 2005
Journal search terms: billing, management, marketing
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, University of Florida
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