Meeting the challenges of PAMA in 2019: Five Survival Strategies for Stressed Lab Managers

Meeting the challenges of PAMA in 2019: Five Survival Strategies for Stressed Lab Managers

Does your lab have to report PAMA Private Payer data this year?

Whether you operate a commercial lab, in-house hospital lab, or network-sponsored facility, if you use CMS 1450 14X to bill for Medicare Part B clinical laboratory tests, you will likely be considered an “applicable lab” for the purposes of 2019 PAMA reporting.

CMS says PAMA is going to save Medicare almost $4 billion in the next ten years. For anyone wondering where that “savings” is coming from, the short answer is: your budget.

The bad news (a review):

  • CMS reimbursements will be cut by 10% again in 2019
  • Reporting requirements are more rigorous than ever through June.
  • Penalties for filing lapses or errors is steep. ($10,000/day)

With lab fees in the crosshairs of CMS cost-cutters, already tight reimbursements and oversight will be amplified. So, short of getting out of the lab business altogether, what can you do to help offset the pressure of diminishing budgets and increasing test volumes?

Having seen a wide spectrum of strategies from all types of labs across the country for the past two decades, S&P Consultants would like to offer you some tips for weathering this next season of cost-cutting.

As you’ll see, the basic strategies really haven’t changed for the past few years, but smart labs are finding ways of doing more in each of these areas:

  1. Reduce staff/salaries
    This means “doing more with less”—even in an environment where many labs are seeing increased volumes. The key to making this work is having systems in place that allow you to be ultra-efficient (see #3 below). But to get these systems to work in the real world, you can’t just rely on your LIS vendor. Successful labs are tapping third-party consultants to gain insight on process analysis and training at the intersection where technology meets people. If you’re forced to reduce staff (while keeping up with current, or growing, volumes) you’re going to need expert help.
  2. Streamline services
    Can you take another look at the tests you offer in-house? Would it be more economical to send some of the more exotic/expensive tests out? Analysis depends on being able to smartly get the data out of your LIS. Find a 3rd party that has the right combination of LIS, revenue, and clinical/lab expertise. e.g. Are there further ways to streamline specimen processes?
  3. Increase automation
    Can you implement more auto verification protocols? Studies show that 80% of routine lab tests come back with normal findings. If you can document and demonstrate a high level of confidence in your processes and systems, it makes it easier to allow normal results to “flow through” without additional tech verifications. Find a partner or consultant that can help you document and present this evidence to your leadership to support your efforts.
  4. Scrutinize the balance sheet
    Step one is to tighten your belt (yet again!) Are you over-paying for reagents or other supplies? What do your overtime costs look like and how can you reduce those expenses? The second step is to look at additional revenue streams such as more consistently capturing reflex testing opportunities or offering services to outside customers.
  5. Plan ahead for LIS upgrades
    Vendors like Cerner and Soft have big version upgrades coming up. To make sure you’re ready and can get the most benefit, work with a 3rd-party consultant to help with scoping, project management, training, and reporting. Don’t get caught short when demand will sweep the industry. While there may be no substantive relief in sight for busy labs, there are still actions you can take to make your life easier and maintain quality patient care.

For more information about PAMA filing requirements you can check out some of these resources:

Dark Daily’s reporting on PAMA penalties

CMS’s website with the latest regulations

To support the American Society for Clinical Laboratory Science’s call for a freeze on PAMA cuts

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