By Brittany Mullen, MLS (ASCP)CM
Understanding the intricacies of the fee-for-service payment system for lab tests is crucial for the success of clinical laboratories. This pressing issue takes center stage at this morning’s scientific session, titled “The fee-for-service payment system for lab tests: A challenge for labs, patients, physicians, and insurers.” Moderator Nikola Baumann, PhD, DABCC, from Mayo Clinic, and speaker Michael Astion, MD, PhD, from Seattle Children's Hospital, will bring their expertise to clarify this complex topic.
Fee-for-service is one of the most predominant payment models in the U.S. healthcare landscape. However, many laboratorians, including those in leadership positions, lack comprehensive knowledge about how tests get reimbursed. This session aims to bridge that knowledge gap, helping lab professionals enhance their financial wisdom and operational efficiency.
Baumann will kick off the session by clarifying the necessary considerations for determining the cost and list price of a lab test. She will delve into various contributing factors, such as testing materials, labor costs, and overhead. Furthermore, Baumann will discuss the broader implications of accurate pricing on the healthcare system, including accessibility, affordability, and resource allocation.
These insights are essential for ensuring that costs are balanced with quality and patient care, and for conveying the importance of transparent and ethical pricing. This knowledge helps healthcare providers, administrators, and policymakers to make informed decisions that can ultimately improve the efficiency and sustainability of healthcare pricing.
Astion will delve into the mechanics of the fee-for-service payment system, highlighting common errors, operational challenges, and the importance of lab stewardship. He will emphasize the critical need for knowledge and collaboration. “It's generally a bad idea to be ignorant of the payment system that we all depend upon. This ignorance directly leads to loss of power by laboratorians,” he says. “Understanding the payment system helps labs avoid unnecessary cost cutting and the loss of control to an outside entity. It empowers laboratorians to participate actively in the governance of their laboratories.”
The session will further explore the perspectives of patients, clinical laboratories, physicians, and insurers. Patients often face financial hurdles due to high out-of-pocket costs, while laboratories strive for operational sustainability. Physicians depend on timely and reliable lab results to ensure effective patient care, and insurers work to balance cost containment with the provision of medically necessary services.
A thorough understanding of how tests are reimbursed is crucial for both the operational and financial success of a lab. With a better grasp of how the fee-for-service model works, laboratorians can identify which testing areas are likely to be profitable and take the first steps toward enhancing the overall payment system for both labs and patients. A robust knowledge of the payment system empowers laboratorians to actively participate in the governance of the laboratory, rather than being passive recipients of decisions made by others.
