Medicare Laboratory Payment Policy Now and in the Future (2000) / Chapter Skim
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5 The Current System: How Well Does It Work?
5 The Current System: How Well Does It Work?
Pages 100-115
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From page 100... ...
Much of it came from stakeholders and other parties involved with laboratory services. BENEFICIARY ACCESS The committee found no evidence that beneficiaries have difficulty obtaining outpatient clinical laboratory services.
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From page 101... ...
Between 1985 and 1995, the number of Medicare beneficiaries increased by less than 3 percent a year. The number of laboratory tests performed on beneficiaries grew an average of 17 percent annually (OIG, 1995~.
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From page 102... ...
The Medicare program imposes no financial barriers to outpatient clinical laboratory services for beneficiaries. r Unlike other Part B services and supplies, there are no financial barriers for the beneficiary.
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From page 103... ...
Editorial Panel has not supported the use of code modifiers to report the emergency nature of medical services generally. For laboratory tests, specifically, the American Medical Association (AMA)
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From page 104... ...
Over time, changes in medical practice affect the payment system. The recent negotiated rulemaking on coverage policies for laboratory tests is an attempt to move the payment system toward more evidenced-based coverage policies.
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From page 105... ...
The incorporation of new technology into the Medicare outpatient laboratory payment system is an important challenge for three reasons: (1) the current fee schedule is based on laboratory charges in 1983; (2)
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From page 106... ...
An extensive search found no comprehensive, representative, reliable data on current or historical costs for the production of laboratory tests. The committee also has no basis for judging whether the current relationship between the fees for individual tests and their costs of production creates financial disincentives for physicians to order medically appropriate tests.
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From page 107... ...
The OIG asserted that the inadequate controls used by contractors to detect and prevent inappropriate payments and the lack of any financial involvement and oversight by beneficiaries contributed to circumstances that have encouraged fraud and abuse. ADMINISTRATIVE SIMPLICITY AND EFFICIENCY The committee concluded that administration of the Medicare outpatient laboratory payment system, with its 56 separate fee schedules and 56 separate processes for coverage determination, is unnecessarily complex and inefficient, particularly in the way the system incorporates new technologies and determines whether or not a laboratory's claim should be paid.
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From page 108... ...
If some claims are paid after two or more submissions and others are never paid, there is substantial wasted effort on the part of the laboratory, physician, and contractor, compared with filing and processing the claim correctly the first time or knowing not to submit it at all. The requirements for documentation of medical necessity and processing of claims denials affect not only operational efficiency, but also the cost of providing laboratory services and aggregate Medicare payments to laboratories.
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From page 109... ...
Currently, HCFA's main method for determining the medical necessity of reasonable, covered outpatient clinical laboratory services is to have its contractors perform computerized, pre-payment screening of the laboratory service claim form for particular ICD-9 diagnosis and symptom codes that are considered by the contractor to provide an indication of the medical necessity of particular lab tests. Although such use is a well intended attempt to prevent waste and fraud and promote higher quality care, the committee finds that it has undesirable and unintended consequences.
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From page 110... ...
There is a fine line between such educational or administrative assistance and gaming the system. Because the contractors process claims for billions of laboratory tests, it seems administratively efficient to employ computerized screens for medical necessity.
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From page 111... ...
The 23 national medical review policies developed under the negotiated rulemaking may eliminate many inconsistent LMRPs. Also, consolidation of the outpatient laboratory claims-processing functions into four or five regional carriers may reduce the numbers of duplicative coverage policies developed for each test and, possibly, inconsistencies among carriers, depending on how that administrative function is designed.
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From page 112... ...
Improving the Quality and Appropriate Use of Laboratory Services To date, most quality control and quality improvement efforts in outpatient clinical laboratory testing have focused on the laboratory itself and the accuracy of its test results. There is evidence of excessive and inappropriate use of clinical laboratory tests in the hospital inpatient setting, but there are no comparable studies of the use of laboratory tests in outpatient clinics and physicians' offices (Axt-Adam et al., 1993, Hindmarsh and Lyon, 1996; van Walraven and Naylor, 1998~.
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From page 113... ...
Coding Process for Outpatient Laboratory Tests The clinical laboratory industry and manufacturers of laboratory tests and equipment testified that the current process for obtaining a CPT code is cumbersome and slow. The committee recognizes that obtaining a CPT code is only one piece of the complex and lengthy process required to identify and incorporate new technology into the Medicare program, but it is worthy of examination nonetheless.
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From page 114... ...
CONCLUSION The committee concludes that the current Medicare payment system provides adequate access for beneficiaries to outpatient clinical laboratory services, but has many problems that are likely to become more serious in the future. The system needs an appropriate, flexible mechanism for making changes in individual fees that are out of line.
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From page 115... ...
1993. Influencing behavior of physicians ordering laboratory tests: A literature study.
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