Revenue Cycle Management Services Help Pathology Group Restore Reimbursement Cuts
“I feel I can turn to Change Healthcare with just about any problem and know that they’ll quickly come up with a solution. We feel fortunate to have them as partners. In fact, I wouldn’t want to be in this business without them.”
- Robert C. Babkowski, M.D.
President
Stamford Pathology Group, PC
Customer
Stamford Pathology Group, PC
Stamford, Connecticut
Challenge
Sudden reimbursement interruptions, signifi cant revenue loss, pursuit of suitable contract terms, and optimizing claims and collections
Product
Revenue Cycle Management Services, Practice Management Services
Results
- Restoration of terminated Modifier 26 payments
- Restoration of interrupted CPT code payments
- Days in AR: 35
- AR greater than 120 days: 8-10%
- Net bad debt: 9%
The Customer:
Like many clinical laboratories, Stamford Pathology Group, PC (SPG) has worked hard in recent years to overcome rising costs, falling reimbursements, and volume declines triggered by medical practices taking their laboratory work in-house.
Fortunately, the group hasn’t had to battle this alone. Since 2006, Change Healthcare has provided SPG with a wide range of revenue cycle and practice management services.
Stamford, Connecticut-based SPG is a five physician group associated with Stamford Hospital, a community teaching hospital aligned with the Columbia University College of Physicians and Surgeons. The practice performs almost 300,000 clinical procedures and about 83,000 anatomical procedures annually.
The Challenge: How to Stay Competitive Against Rising Costs, Falling Reimbursements, and Volume Declines
In 2006, SPG took over the hospital pathology contract from another group. Change Healthcare was engaged to negotiate agreements with seven major payers and a handful of midsized-to-smaller payers. The company succeeded in obtaining reimbursement rates that were considered competitive in the prevailing market.
Thanks to Change Healthcare, SPG continues to secure equitable managed care agreements, despite decreased industry reimbursement. Change Healthcare also has played a vital role in helping SPG optimize collections through custom reporting, documentation assistance, accurate coding, and claims and denial management.
Just as important, Change Healthcare has assisted SPG through timely alerts about changes in Medicare and commercial payer policies. These early warnings recently proved critical by alerting SPG to unforeseen reimbursement cuts that affected the group.
The Solution: Revenue Cycle and Practice Management Services Help Secure Managed Care Agreements, Optimize Collections, and Stay Up- To-Date On Policy Changes
In the years since, Change Healthcare has been able to maintain consistently strong rates for the practice through successful renegotiations. SPG most recently averaged an 8.6% increase in rates across its commercial book of business.
Two recent events highlight the importance of closely monitoring payer performance after contracts are signed. In early 2014, one of the group’s major payers announced that it would stop reimbursing for Modifier 26, the code used for the professional component of clinical pathology.
Modifier 26 accounted for about 25% of SPG’s revenue and traditionally was paid to cover physician oversight and management responsibilities in the laboratory. The payer, however, reasoned that increased case study automation in the lab made oversight unnecessary. The fee, therefore, was no longer justified.
