3 Strategies to Survive the Protecting Access to Medicare Act

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Position for success as independent labs face the Protecting Access to Medicare Act, one of the most taxing laws ever. 

The success of today’s healthcare providers comes down to one thing: actionable patient data. Given that laboratory data is estimated to comprise more than 80% of a patient’s health record, no other healthcare group has as much potential to deliver improvements through the power of actionable patient data than labs. Additionally, labs stand to demonstrate tremendous cost savings in the future—not by slashing testing costs, but by analyzing and creating a clear connection between the proactive use of appropriate testing and the improved management of patient populations resulting in successful outcomes.

To reach this pinnacle of lab value, you must first face PAMA.

Centers for Medicare & Medicaid Services (CMS) has picked up on the prevalence of lab testing and instituted a new set of government regulations. The Protecting Access to Medicare Act, or PAMA, is aimed at continuously monitoring payments for the growing mass of data produced by laboratories. Unfortunately, PAMA is one of the most taxing laws to ever be faced by independent labs.

According to Robert Michel, Editor-In-Chief of The Dark Report, PAMA “has the potential to trigger the most significant disruption to the clinical testing marketplace in four decades.”

Many labs simply are not prepared to meet the rigorous requirements imposed by this multi-year effort and, as a result, are likely to incur a fine of $10,000 per day for failing to produce the data mandated by the law.

What is PAMA?

In an effort to bring Medicare payments into closer alignment with private payer rates, PAMA requires laboratories with more than $12,500 in Medicare revenues and more than 50% of revenue from Medicare to submit private payer claims data to CMS for use in the revision of Medicare and Medicaid payment rates.

By Mar. 31, 2017, labs must report on all charges, payments, and volume for private payer claims that occurred between Jan. 1, 2016 and June 30, 2016 or face a $10,000 daily fine.

The goal of PAMA is to collect data around clinical diagnostic laboratory tests (CDLTs) and advanced diagnostic laboratory tests (ADLTs) to determine what level of payments will be provided for these tests.

The Consequences of PAMA

PAMA is expected to save CMS upwards of $5.14 billion over the next 10 years. This cost savings is largely attributed to lower reimbursement rates, including a sharp decrease in Medicare reimbursements for laboratory tests.

Laboratories that capture new, profitable revenue through sales pipeline visibility and live analytics are best positioned to withstand the hard-hitting effects of PAMA.

Unfortunately, this means that even if all labs meet these increased reporting demands, failing to offset the lost revenue caused by reduced CMS reimbursement rates puts unprepared labs at risk of going out of business.

In order to tackle PAMA head on, labs must take steps today that will drive increased revenue and improved efficiencies. While the task may feel daunting, powerful cloud technology solutions can integrate live data, automate performance reporting, and drive action to increase profitable revenue by facilitating proactive workflows.

How Can Labs Prepare to Succeed Under PAMA?

While the idea of preparing for a multi-year reporting mandate only to find your CMS revenue decrease may sound daunting, you can succeed with PAMA and position for future success through the effective use of modern, secure healthcare cloud technology.

Here are three proven strategies laboratories can use to prepare for PAMA:

  1. 1. Maximize and Retain Revenue: To maximize revenue, organizations must improve collaboration, visibility, and communication between all lab departments. Clearly understanding high value payers, CPT codes, ordering provider accounts and provider reimbursement rates will enable your lab to create a value-driven culture with maximum transparency leading to success with your customer relationships.

Retaining current clients—often the critical source of a lab’s incoming revenue—should be a top priority. Understanding the breakdown of high-value customers/prospects to low-value customers/prospects can help executives and managers make marketing and test-mix decisions to drive profitable growth.

To facilitate this, labs can benefit from a healthcare relationship management (HRM) platform, where an up-to-the-moment view of all client relationships—including both clinical and business activities for each provider—instantly pinpoints client status, ranging from at-risk and costly to satisfied and highly profitable.

  1. Monitor Live Lab Performance: Even without the demands of PAMA, laboratories are under pressure to improve quality and performance while reducing overall costs. In most cases, performance reports have been static spreadsheets that are outdated by the time stakeholders receive them.

Since labs must begin reporting on all charges, payments, and volume for private payer claims no later than March 31, 2017 or face a fine, the need for an Healthcare Relationship Management (HRM) solution that enables real-time performance metrics to be shared with CMS is acute. Beyond the CMS reporting mandate, monitoring laboratory performance in real-time provides a one-stop view into critical lab metrics, eliminating time-consuming manual processes and increasing efficiencies. A healthcare relationship management platform provides a comprehensive, real-time view of a lab’s activities, communications, and overall performance instantly via any smart phone, computer or tablet. Plus, action can be driven to address issues immediately before they snowball into catastrophic consequences.

  1. Capture New Revenue: Laboratories that capture new, profitable revenue through sales pipeline visibility and live analytics are best positioned to withstand the hard-hitting effects of PAMA. Prospects, opportunities, and leads should be tracked and monitored across reps and territories continuously. Managers and executives should use this data to understand where sales initiatives are succeeding and where strategies need to change.

Healthcare CRM, which is a key component of healthcare relationship management technology, can provide instant visibility into new opportunities, existing business, and up-sell activities enabling sales teams to spend their time in the right places to grow profitable revenue. Gathering leads, automating personalized marketing campaigns, and managing opportunities can be optimized through lab-specific healthcare CRM capabilities. Additionally, increasing existing business to capture new revenue is enabled by driving proactive, personalized service spanning all departments of your organization across the various stages of your provider relationships.

In summary, improved laboratory performance and reduced manual efforts are key to surviving PAMA regulations. Through effective planning and execution with a leading cloud HRM partner, your lab will be positioned to thrive in the years to come. Healthcare relationship management solutions help laboratory teams get a step ahead of PAMA by knowing where to focus in order to maximize the value of each client relationship.

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Brad Bostic
Brad Bostic

Brad Bostic is founder and CEO of hc1.com.

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