March 2000 • Volume 6 • Number 3
Academy expresses concerns with POL payment methodology
Twenty years ago, when Paul Fischer, M.D., was wrapping up his textbook, The Office Laboratory, that topic was very different. You could run a quick test, then return with results a few minutes later. Made sense.
"There's nothing like walking into an office with results a few minutes after drawing blood," Fisher said recently from his Evans, Ga., home. "Nothing is quite as efficient as providing 'teachable moments' to a patient."
Now, all FPs know, the situation has changed for physician office laboratories. You want to do a simple blood test? Most likely you can't handle it in-office and might have to send the sample out to a reference laboratory. You'll wait a few days for results, call the patient to give the results and schedule another appointment, if needed.
Paul Fischer, M.D.:
"This used to be simple."Or you can post the results on a secure Web site, give the patient the URL and abandon hope of that "teachable moment."
"There's no advantage to testing like that," said Fischer, an AAFP nominee to the Health Care Financing Administration's Medicare Coverage Advisory Committee.
The Academy agrees and has voiced its concerns in a statement on the Medicare payment methodology for clinical laboratory services. The statement was sent Jan. 24 to an Institute of Medicine committee that is studying the issue.
The Academy statement said weaknesses include:
The charge-based current payment methodology "reflects the vagaries of how labs have historically set their charges rather than either the actual or relative costs of the services themselves."
Medicare pays on a geographically differentiated basis, even though service costs may not vary. The result: Some payments are below cost.
Payments for tests done manually are often equal to payments for the same tests done with the automated equipment often used in large reference labs, which "favors larger, better-equipped labs at the expense of POLs."
Medicare carrier policies often require physicians to reduce the number of tests or confine tests ordered to specific diagnoses, whether or not it makes sense in individual cases. The policies also add to the documentation requirements of physicians and discourage testing that may be medically appropriate.
Fischer used far fewer words. He called the situation "a nightmare."
"This used to be simple," he said. "Now, you've got to support all diagnoses, and everyone is changing the rules under which diagnoses can be supported. Nobody really knows what kinds of rules they're working with."
The Academy statement said a better payment methodology would meet guidelines spelled out in AAFP's policy on physician reimbursement. One option would be paying for clinical lab services under the resource-based relative value scale that Medicare uses for other physician services. Major reservations were expressed about another option: competitive bidding. It may be acceptable "if quality of care takes precedence and competing bidders are at an equivalent level," the Academy statement said. But it also noted that POLs and large reference labs could not bid on equal terms.
AAFP's statement also addressed the direction POLs might take given the constant introduction of new lab technology.
Fischer suggested national guidelines for reimbursement and a better range of common tests in evaluation and management coding as possible solutions. "Things like urinalysis make FPs jump through plenty of hoops," he said. "If they'd just incorporate that into E/M coding, we wouldn't have to do that anymore."
FP Report is published by the AAFP News Department.
Copyright © 2000 by American Academy of Family Physicians.
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