The Protecting Access to Medicare Act of 2014 (PAMA) is a new ruling which allows CMS Medicare officials the ability to create a market-based payment system. There are many provisions to the law, but there are two of main interest to clinical labs nationwide. As you might have guessed, the only way a market-based payment system can exist is if payment rates for tests are known. Under this new law, laboratories will be required to report their rates starting in 2016. Besides the sheer amount of tests that will need to be divulged, the many details behind these tests will also need to be provided. Still, many clinical labs are unable to get complete access to their information, and therefore, are ill prepared for this upcoming burden.
Once collected, CMS will reset the price of each test based on the weighted median of the payment rates for private payers. The potential for disruption includes a reduction as much as 75% in prices between 2017 to 2022. They are only allowed to reduce the price of a single test by ~10-15% per year, but without insights into how these annual cuts will affect the organizations in the long run, clinical labs may be caught off-guard and unable to adapt to the unstable fiscal landscape.
The key to overcoming the legislative disruption will be dependent upon the organization’s ability to prepare themselves. First, laboratories will need to decrease costs. Viewics offers users an easy way to obtain data-driven process improvements to reduce costs by using Viewics. Viewics provides insights into key profits and cost drivers and allows organizations to get smarter about what elements to cut and how it will impact their business.
Secondly, laboratories will need the right tools to share this information effectively with CMS. Without requiring substantial resources and manpower to collect information, Viewics allows organizations to mine levels of granularity within their existing data, including the required details that the CMS will ask for – such as the volume of tests and the prices paid by every payer for every type of test.
Finally, it will be critical to monitor and react in a timely fashion to these price shifts. Access to complete data and preparedness means organizations can adapt more easily to the price shifts. Laboratories will be able to provide data-driven process improvements by fully understanding how test price changes will affect their clinical, financial, and operational goals.
Change is inevitable in our environment. Strengthen your organization’s adaptability before the new law overwhelms the healthcare environment. Viewics is a solution you can adopt today to prepare for future headaches.