Ask The Expert

Negotiating payment for lab tests from managed care plans

Q. In a prior Ask the Expert column, you mentioned writing managed care plans to get more reimbursement for in-house lab testing. Does this work? Do you have a sample of what such a letter should look like?
A. Yes, it works for practices that take the time to negotiate fair payment for their on-site testing program. As you know, some managed care plans require certain tests be sent out to a referral lab and maintain a short list of tests that they will pay for when performed in-house. More recently, we’ve seen some plans slash rates for some lab tests. It’s very possible to both get increased payments for tests performed in-house as well as adding the tests you perform to the list of ÒallowedÓ tests.

One phone call to the medical director or provider representative will do the trick, right? Wrong. To win this battle, you must state your case in a way that appeals to the managed care plan. And, depending on your relative bargaining power, you may need to be doggedly persistent and not expect to be successful on your first try.

Managed care plans may tell you that their contract terms are set in stone, and may go so far as saying Òtake it or leave itÓ, because until recently, many physician offices have signed contracts without question. As you know, if you’ve ever bought a car, nothing is set in stone!

Medical practices that succumb to this intimidation by agreeing to contract limitations that do their patients a disservice will watch their office lab testing programs erode in direct proportion to their managed care payer mix.

Put yourself in their shoes and assume that, as the managed health plan’s contract negotiator, you don’t know the difference between a CBC and a glucose test. If you were shown two fee schedules, one from a mega-lab bidding $2.00 and $1.00 respectively, and one from a physician office lab for $12.00 and $6.00, you would surely opt for the seemingly less expensive bid. Right?

So, to begin the negotiation process, write a letter stating what tests you want payment for and why. Be sure to emphasize how your office based testing contributes to better patient outcomes (which in the long run, saves money). Although the cost per test at the point of care is higher than for mega-labs, overall savings in the total cost per patient episode often far exceeds the initial expense. For example, due to prolonged turnaround time for lab results, some patients will receive inappropriate or delayed therapy which could cost the managed health plan additional dollars in the form of repeat visits or visits to other healthcare providers or emergency treatment facilities.

I provide a sample template you can use to construct a letter to managed health plans in the Quality America’s Resource Center at: http://www.quality-america.com/resource-center

You may be able to accomplish your objectives by writing a letter, but developing a personal relationship with MCO officials is more effective. Finally, to follow up on the letter that you write, arrange a meeting with the provider rep or the medical director (at your office, not theirs) to discuss the details for resolving the issue and to execute the contract changes.

Annual Safety Sharps Review
Q: We heard that one of the most cited OSHA violations is failure to document each year in the OSHA Manual that the most appropriate safety sharps are in use. Do we need to re-evaluate them every year? If not, what annual documentation does OSHA require?
A. You don’t need to re-evaluate safety needles each year, but you do need to ensure that you’re using the best product available to minimize or eliminate staff injuries. So, look at needlestick rates in your practice and ask frontline employees for feedback about the safety products you use. If there have been needlesticks or near-misses, or if employees dislike the current product, bring in a few boxes of an alternative product to evaluate.

One more thing: If you are still using non-safety devices in some areas, be sure to re-evaluate the reasons why (OSHA says expense isn’t a legitimate reason) and also determine whether or not new safety products could fit the bill. If you use the Quality America’s OSHA Safety Program Manual, you can document all of this on the Annual Checklist.

Validating new lot numbers of controls
Q. You mentioned last month about validating new lot numbers of controls. Does this apply to waived testing, such as the Accu-Chek cholesterol test? Wouldn’t this use up your whole box of reagent cartridges before being able to use them for patients?
A. This is not a requirement for CLIA-waived products. For these products, you only need to 'follow the manufacturer's instructions'. Validating new lot numbers of controls is only required for moderate and high complexity tests.

Also, it’s only required for new lot numbers of controls, so try to order as much QC material from the same lot number as possible. At this time, it’s anyone’s guess as to the number of QC samples that need to be tested to validate new lot numbers of control material. Although 20 is always the magic number in the lab industry, because it’s the lowest number from which you can derive decent statistics, I spoke to COLA about this new requirement and was told that they would accept 5 runs rather than 20. Some CLIA inspectors may accept this too, I think, since almost NOBODY is currently doing it for assayed controls, but it probably depends on the inspector.

I also can't believe that CLIA expects us to perform this exercise with cartridge-based moderately complex tests, but so far, they haven't commented on that.

In fact, CMS is not expected to issue citations for failing to validate new lot numbers of assayed controls in this inspection cycle. Instead, labs will receive a letter from CMS telling them to begin doing it and explaining that this validation will be mandatory in the next CLIA inspection cycle (2010). We expect for CMS to release new inspector's guidelines about this in '08 and I’ll keep you updated on that in this column.

Medicare payment for A1c
Q. Last year, a new CPT code, 83037QW, was issued for A1c tests are approved for home use. This new code reimburses $21.06 whereas the old code 83036QW reimbursed only $13.56. Does the new Medicare lab fee schedule for 2008 continue these codes and reimbursements?

A. The new clinical lab fee schedule continues to include both codes at the reimbursements you stated, but expect for Medicare to begin paying both codes at the same (lower) rate beginning April 1, 2008.

Mercury ban in healthcare facilities?
Q. My office manager just told me that as of Jan 1, 2008, mercury blood pressure units are now banned. Is this true? If so, is it a state or Federal regulation? Our practice is in Michigan.
A. A new Michigan law bans the sale and distribution of home thermostats containing mercury beginning January 1, 2009. Another provision bans the sale of blood pressure devices containing mercury beginning January 1, 2008, and their use altogether beginning January 1, 2009. Mercury-containing gastrointestinal devices are banned from being sold as of Jan 1, 2008 as well. These two items represent the largest use of mercury in medical facilities, with leaks and accidental spills exposing people to harmful mercury vapors.

In Michigan alone, there are currently more than five million mercury thermostats containing over 35,000 pounds of mercury. When products containing mercury are sent to a landfill, crushed in a garbage truck or demolition site, or burned in an incinerator, the mercury is released into the environment. Once in the air and soil, mercury makes its way into rivers and lakes where it works its way up the food chain, resulting in higher mercury concentrations in the fish we eat.

To safely dispose of your thermostats, blood pressure devices, and other products containing mercury, visit www.michigan.gov or call 1-800-662-9278 to find a collection site in your area of Michigan.

HbA1C for diabetes screening?
Q. One of our doctors suggested using A1c tests for ’screening’ patients for diabetes. My understanding is that the fasting plasma glucose test is used for screening, whereas the A1c test is for monitoring known diabetics. Am I missing something?
A. The latest Guidelines from the American Diabetes Association recommends fasting plasma glucose to screen for diabetes, but recent research suggests that A1c levels could be used in screening for and possibly diagnosing, diabetes. The researchers maintain that the fasting plasma glucose method is limited because most patients are seen during the day, after they have eaten. HbA1C measurements do not require fasting and can be measured at a routine office visit.

Researchers studied data from 4935 participants between 1999 and 2004. Based on fasting plasma glucose levels, 3280 were normal, 1485 had pre-diabetic levels (100-125 mg/dL) and 170 had previously undiagnosed diabetes (126 mg/dL or higher). An A1C level of 5.8% had a sensitivity of 86% and specificity of 92% in detecting diabetes, the team found. Patients with values less than 5.8% would be unlikely to have diabetes and those with 5.8% or above will be much more likely. And - only a minority of patients would have to return fasting for either a glucose measurement or a full oral glucose tolerance test. Check out the study in Diabetes Care 2007;30:2233-2235.