The “bundle” may have a goofy name, but this new system cannot be ignored. Starting in January 2011, the bundle will transform the way everything is being paid for in dialysis, including laboratory services. In what ways will the delivery of labs change and what strategies should clinics and lab companies implement to deal with the new payment paradigm? Three industry experts offer advice to Renal Business Today readers on this topic.
According to Mike Burney, CEO of RenaLab, lab operators will need to help their centers minimize lab costs as well as give them all information needed to fully take care of the patient, all within bundle guidelines. Communication is necessary. "This has enabled us to partner with our clients to understand and prepare for the challenges and opportunities that we see ahead with the new bundling environment," Burney said.
Quality of lab delivery will not be compromised, Burney predicts. "The quality delivery of lab results will continue and will not be affected by the bundling system," he said. "The only change that we have seen has been a positive one, in that it has enabled us the ability to interact with our centers more during this transition. This is the biggest change that our industry has seen in 30 years, and we are all approaching it and preparing together."
Paul Beyer, CEO of Satellite Laboratory Services, LLC, said he does not expect any changes at Satellite regarding delivery of timely, quality lab results. "Our clients depend on us to help them run efficiently, and their quality patient care depends upon our reliability as a laboratory," Beyer said. "Our turnaround time for most tests is 24 hours, and our clients map workflow around this. Planning for patients and having results back so that their own workflow is not impeded is critical for the efficiency of our clients’ operations."
Efficiency in every aspect of the laboratory and dialysis clinic business will be more critical post bundle than ever before. "Statistics show that the number of people in the United States on dialysis is approximately 400,000, and increasing every year. This translates to increased patient loads," Beyer said. "The cost pressures of bundling makes running an efficient dialysis clinic more important. Our efficiency directly relates to the efficiency of our clients."
The bundle isn't exactly a ball of fun, especially since dialysis patients using Medicare can expect to see a 1.2 percent increase in their co-insurance payments largely due to the inclusion of laboratory tests into the new end-stage renal disease payment bundle, according to an analysis by the Centers for Medicare & Medicaid Services.
“The patient’s share of costs is likely to increase for most everybody because the 20 percent coinsurance for the bundle compared to the composite rate they pay now is going to be more because there are more services in the bundle,” said Tonya Saffer, deputy director, Dialysis Patient Citizens, in a September 2010 article for Renal Business Today. “For patients, who have a higher than average utilization of previously separately billable items like ESAs, CMS has theorized that there is a chance that overall their coinsurance or co-pays could be lower.”
Under the current system, Medicare beneficiaries on dialysis pay 20 percent of the dialysis base payment plus 20 percent of ESRD-related separately billable drugs, such as Epogen, the article stated. However, patients currently do not pay co-insurance on separately billable lab tests.
The new ESRD Prospective Payment System, which was released in July 2010, bundles separately billable drugs, labs and the existing payments for dialysis services into one payment per treatment. CMS will pay for 80 percent of each treatment and patients will be responsible for the remaining 20 percent. That's the patient consequence. What about the clinics?
How Dialysis Providers Should Handle Labs
Bundling will require more work to track and bill labs, plain and simple. There will be more effort needed as any change brings added responsibility and the requirement to adapt, Burney said. "Dialysis providers will now have laboratory charges on their claims, and will now have some of the billing complexities that labs had in the past," he said. "But no matter what, their patients will still get the same quality of care."
Olivier Gindraux, CFO of Satellite Laboratory Services, LLC, theorizes that billing will be a major change for clients. "There will be more work for facilities to track, account for and bill for labs," Gindraux said. "For instance, effective Jan. 1, 2011, tests must be designated by the physician as ESRD-related or not, and this designation determines billing and payment flow. There will be an admin burden that did not exist pre-bundling that directly affects how labs are submitted for payment for Medicare/Medicaid patients as a result. And importantly, clinics will now receive payment from CMS for Medicare/Medicaid patients, not the laboroatory, so the flow of payments will be something that is new for them. In this sense, it is not enough to just handle billing. Revenue management is also required."
Satellite currently performs a significant number of tasks to facilitate billing, according to Gindraux. His team recognized the eventual potential administrative burden to clients and the need for revenue management, and has responded with three initiatives.
First, Satellite modified its billing software system to provide clients with information CMS requires in order to bill and substantiate to CMS and insurers. Second, the company established a Bundling Support Team to work directly with clients on billing and CMS-related questions. Lastly, to assist with revenue management, the team developed laboratory test cost, utilization and control tools called LabCheck Analytics and LabCheck Formulary. These tools are meant to serve as bundling calculators and remove worry from the new model. They allow clients to see their ordering patterns, assess them within the framework of the new bundled payment system, understand duplication and lock in test menus to control costs. Satellite reported "tremendous interest and uptake" in these resources.
