Persevere Through PAMA
Now more than ever, clinical laboratories need to be focused on implementing lean processes. Along with the challenge associated with finding qualified professionals, labs are now also tasked with surviving through the Protecting Access to Medicare Act (PAMA). PAMA dramatically changes the way in which the Centers for Medicare and Medicaid Services (CMS) determines its pay rates for specific lab tests. In the past, CMS pay rates were based on historical data and adjusted over time for inflation. Now, rates will be based on the weighted median of private payer rates, creating a market-based Clinical Laboratory Fee Schedule (CLFS). (1, 2) This is anticipated to result in significant reimbursement burdens for all labs – meaning it’s in our best interest to think ahead in order to minimize its projected impact. Following are several ways you can help your lab prepare.
Reduce or offset operational costs
Laboratories need to take a scrutinizing look at how much waste they’re creating, whether it is necessary, and how to minimize it. Since most labs are already operating as lean as possible in regards to staffing, different avenues to save money need to be explored. This first can be done by looking for opportunities to improve reagent and consumable usage. Consider any tests that are run in duplicate or that are set up for redundancy on an identical platform. How much money are you spending on calibration and QC materials to maintain these? Which of these redundant tests are absolutely necessary? Is there an opportunity to tighten down the list? This process may mean adjustments to an existing test menu or changing the availability or turn-around-time for some testing (batching). The laboratory should also strongly consider taking an active role in monitoring and changing test utilization in order to maximize the efficiency of their test menu (3).
An additional idea is to consider bringing in and marketing for more specialized testing. Under PAMA, there is a lower impact on reimbursement for tests placed in a new category called Advanced Diagnostic Laboratory Tests (ADLTs). These tests include the analysis of DNA, RNA, or proteins and must provide clinical information that is not obtainable through another method (4). For many small labs, this simply isn’t a realistic option, but larger labs may want to consider it as it may help offset other reimbursement cuts.
Make smart vendor investments
Relationships between vendors and the laboratory will be increasingly important moving forward. Be careful to make sure your lab is investing in quality equipment with competitive pricing that will work well for your level of staffing and ideally, automate as many processes as possible (5). Automating anything that doesn’t require the critical thinking skills and knowledge of a laboratory professional will allow them an opportunity to put their energy elsewhere and increase overall efficiency. Perhaps even more important, be mindful of vendor selection and really dig into what they are offering in terms of consultative services. Some vendors now offer workflow analysis and will provide ideas to streamline your lab prior to instrument implementation (or even, well after!). Look for a vendor that will take the time to help maximize your labs return on investment while providing a quality product.
Change inefficient processes
Labs everywhere will likely need to cut down on the time it takes them to perform everyday processes so there is more time to devote to lean strategies. A first step for getting a “bird’s eye view” of your general processes would be something as simple as a walk-through. Take notes on specific steps taken in each area and identify unnecessary or redundant work. Use a timer to evaluate potential time savings that could result from cutting out “extras”. Surprisingly, streamlining a workstation or moving the location of a printer can be all it takes to see a positive improvement! In the interest of saving time, it would also help to consider implementing an automated software solution for tasks such as scheduling or competency assessment so you can free up your supervisors to focus on other things. A smart solution such as StaffReady’s platform may just be the golden ticket!
In the end, it will likely take several years for the full impact of PAMA to be fully recognized in the laboratory. Labs must start reducing costs, improving vendor relationships, and changing inefficient processes now in order to stay in the game. Documenting your steps toward improvement and involving laboratory and hospital executives is always a great step.