Category: Industry News

Know Your Payer Requirements.

When it comes to preauthorization, it is important to know what your payers require. Some prior authorization programs may require test registration and/or genetic counseling and may limit or discontinue retro-authorization options. The latest payers to adopt such programs are Anthem Blue Cross and UnitedHealthcare.

Define Your Lab’s Financial Goals.

Before you can determine the best strategy for managing pre-test authorization, you need to define your lab’s financial goals and establish your lab’s identity, including the willingness to trade reimbursement for market share and volume. Start by analyzing your historic revenue data. Analytics will help you understand and anticipate what the new pre-test requirements will cost your lab. A good revenue cycle system can help you identify which of your tests, patient populations, providers, and payers perform best financially and which do not. Investigate under-performing product-market segments. Is it a volume issue, a cost issue, or both? Are the right tests being ordered and performed? Engage in a low-cost, high-impact educational campaign targeting providers and patients as well as your own sales team and back-office support.

To Test or Not To Test – Things to Consider.

When you are sure the right tests are being properly ordered, you need to decide whether or not your lab should perform the tests. Delivering rapid turnaround in the midst of rigorous payer pre-test requirements adds complexity and cost to your lab’s operations. What level of calculated risk to reimbursement is your lab willing to accept in order to maintain market share and deliver rapid turnaround? Here are some things to consider during your decision-making process.

• With certain exceptions, Medicare defines Date of Service (DOS) as the date the specimen is collected, making it virtually impossible for the laboratory to obtain prior authorization after the specimen has been received. Some commercial and Medicare Advantage plans may allow the DOS to be the date the test report is signed. It is in the lab’s best interest to have all pre-test requirements before starting the test. Pre-test requirements include not only payer prior authorization, but also basic coverage determination. In the event the test is not a covered benefit, the payer may require patient consent through the use of an Advance Beneficiary Notice (ABN) form in order to bill for the test. How will the need for prior authorization and ABN impact your accession process? Consider deploying a client-facing ordering portal that will include the payer pre-test requirements so that the ordering physician has the necessary information at the time of ordering.
•  Another strategy is to revisit your payer contracts. If during payer negotiations your lab cannot eliminate a payer’s requirement for prior authorization, then you may want to attempt to negotiate the terms. Some labs have been successful in negotiating a 2-week window from specimen collection in which to secure pre-test requirements. If granted, it would be the lab’s decision whether or not to go to testing during this time, tailoring accession operations based on product-market segment performance. Specimens from high-performing segments would move to testing immediately, while specimens from other segments could be held until all pre-testing requirements are met.
• Consider the demands of proper specimen handling. Many biological specimens (blood, urine, bone marrow) do not have long viability. Define your lab’s specimen handling requirements to ensure the integrity of your test results. Identify these procedures and protocols in your negotiations with payers stating the adverse effects of testing delays. Plan for these operations in your accession workflow strategies.

Choose Your Next Move.

The choices you make for how your lab moves forward in the midst of today’s rigorous pre-testing requirements depends on your lab’s ability to optimize its revenue cycle while delivering quality test results. Achieve operational success and maximize reimbursement efforts by understanding the payer’s requirements and then deploying an optimized, prioritized workflow.

In less than three short years (2014-2017), narrow and ultra-narrow networks have increased from 48% to 53% of all networks. With their majority influence, these networks are reshaping the healthcare industry. To survive, labs of all kinds will need to understand the implications of narrow healthcare networks on their ability to access patients and collect reimbursement.

To begin, it is important for laboratory managers and pathologists to understand the reasons behind insurers’ creation of narrow networks and their perceived value by consumers and employers.

How do plans with limited networks provide cost savings for health insurers and health consumers?

The goal is to deliver increased patient volume (and revenue) to the provider in return for lower costs to the insurer (and ultimately the patient) achieved through reduced rates. Insurers limit the number of doctors, hospitals, and other providers a patient can visit in order to negotiate a lower cost for services with networked providers in return for a higher volume of patients. Insurers also promote to consumers that narrow networks allow insurers to influence the delivery of coordinated healthcare by offering targeted in-network solutions to help physicians and providers give patients more personalized care.

Looking for value, consumers prefer health plans with lower premiums over higher-priced health plans that offer access to more providers—22% and 19% respectively. Similarly, employers prefer the benefit of lower health plan premiums with 56% of employers considering narrow networks as a way to reduce medical costs. The level of savings could be a very good deal for consumers and employers, but whether these health plans can deliver value depends on whether or not the insurer’s selected network can provide adequate care.

With limited accessibility and availability, can narrow networks provide adequate care?

While narrow network plans might save money for insurers, consumers, and employers, they could make it harder for patients to get the care they need, where and when they need it. The plans may not include enough nearby providers and the providers they do include may be too busy to take new patients in a timely fashion. This could be problematic if a patient is unable to obtain the timely healthcare they need within their network. It can be further compounded if the plan provides limited or no out-of-network benefits.

Network Adequacy Standards

Federal and state regulations qualitatively state that networks should provide for reasonable access, without unreasonable travel or delay. Regulation of health plan provider networks often includes quantitative standards that may review the number of providers, provider-to-enrollee ratios, the mix of provider types, and the distribution/location of providers from whom enrollees may reasonably be expected to obtain services. Encouraging network transparency, regulation may also require that provider directories are updated at least once each month. The key to any successful regulation is compliance and enforcement. Without means to measure and enforce Network Adequacy Standards proactively, federal and state regulators are limited to respond after-the-fact to patient complaints regarding network compliance.

Implications laboratory providers may want to consider

Whether your laboratory pursues an in-network or out-of-network strategy, it is important to consider the effect narrow provider networks will have on your lab’s ability to access patients and collect reimbursement.

• If your lab is seeking to be an in-network provider in a limited network plan, it may be helpful to learn about the network’s size, mix, and distribution/location as well as any governing Network Adequacy Standards that may be in effect. This information can help you communicate how your lab will fit within and add value to the network’s model. Also, be prepared to discuss price. It may be helpful to approach the topic of price from a value-based perspective. Payers will be interested to learn how your lab testing services can contribute to improve patient outcomes and reduce the cost per episode of care. You may want to demonstrate your lab’s value by sharing relevant statistics. For additional network negotiation strategies, reference Developing Clinical Laboratory Strategies to Gain Network Access.
• If your lab remains an out-of-network provider, your lab will need to balance offering a low price through the narrow health network with preparing for patients to be responsible for paying the entire cost of the test. Be aware that out-of-network providers face new constraints on their ability to balance bill members of government-funded and commercial plans, while commercial payers are continuing to sue out-of-network providers to stop improper referrals and cost-sharing waivers.

Regardless of your network strategy, it is important to know the implications of narrow healthcare networks on your lab’s business model and to have available your lab’s performance statistics so you can negotiate value and drive efficiency and cost containment measures. Learn how Quadax can help; visit Reveal Opportunities. Analyze Impact. Deliver Results.