CHARGES AND FEES

Introduction

  • Primary goal: Provide timely, quality, clinically relevant info to healthcare providers while ensuring financial viability.

  • Financial necessity for all laboratory types (for-profit and not-for-profit).

Calculating Costs and Charges

Setting Costs

  • Responsibility of laboratorian for cost analysis of procedures.

  • Key metric: "cost per reportable test" includes:

    • Direct Costs: Reagents, equipment, labor.

    • Indirect Costs: Overhead, support services.

    • Hidden Costs: Quality control, repeats, wastage.

Setting Charges

  • Aim: Exceed break-even point through strategic pricing.

  • Key considerations:

    • Cost Coverage: Avoid pricing below costs.

    • Federal Payer Compliance: Must charge within limits.

    • Market Competitiveness: Charges should match competitors unless offering unique value.

    • Strategic Pricing: Techniques like loss leaders, pull-through strategies, discounts for direct billing.

Determining Payment Amounts

Fee Schedules

  • Based on varying payor fee schedules, often set lower than actual charges.

Medicare CLFS

  • Reimbursements determined by: actual charge, contractor fee schedule amount, national fee cap.

Philippine Context

  • No direct equivalent to CLFS; regulatory laws manage licensing and fees.

    • Republic Act No. 4688 mandates market rates and transparency.

  • Universal Health Care Act provides coverage for laboratory tests but with negotiations on package rates.

New CPT Codes

  • Fee assignment methods: Cross-walking and gap filling.

  • Open meetings for stakeholder input on new fees.

Keys to Success in Reimbursement

Retrospective Payments

  • Essential actions:

    • Proper coding, secure patient diagnosis, strategic pricing.

Prospective Payments

  • Importance of accurate coding and understanding patient demographics.

    • Project utilization rates and negotiate terms favorably.

Summary and Key Concepts

  • Four essential concepts for navigating laboratory reimbursement:

    1. Understand real costs for procedures.

    2. Set charges to guarantee profit margins.

    3. Act competitively and provide additional value.

    4. Maintain compliance and avoid kickbacks.

Glossary of Key Terms

  • Actual charge: Amount charged for medical service.

  • Capitation: Fixed payment per enrolled person for specified health services.

  • Cross-walking: Assigning fees by comparing with existing codes.

  • Diagnosis code: Numerical code for the patient's clinical reason.

  • NLA: National limitation amount for reimbursement.

  • Stark and Anti-Kickback Laws: Regulations to prevent inducements in service provision.