Tips for Department Improvements and Maximizing Revenue

1. Tips for Department Improvements and Maximizing Revenue • West, Midwest & Canada Regional APC/PDAS Meeting HBP Services 11 Research Drive , Suite 2 Woodbridge, CT 06525 203 397-8000 rtessier@hbpworld.com www.hbpworld.com October 21-24, 2014 Robert H. Tessier Senior Reimbursement Consultant

2. Third Party Strategy • Review all contracts with reimbursements based on historically high technical/global payments for 88305 and other major codes such as 88342. This assumes that the best payers allow 2x Medicare, for example: 88305-26 88305-TC 88305 (Global) $60 + $80 = $140 • Re-negotiate the rates at the earliest opportunity. Don’t wait for current term to end. • Lock in these rates and offer a modest adjustment over a multi-year time frame. While a one year/ 3%+ increase might have been acceptable in the past, our mantra is “Go Long”.

3. Third Party Strategy • Many payors are willing to write multi-year contracts if the adjustments are favorable to them. • Depending on the level of activity billed globally (vs PC only), your Practice proposal might include: Year 1 +3% Year 2 +2.5% Year 3 +2% Year 4/5 +1.5% This approach protects the critical baseline reimbursementfor technical services.

4. Third Party Strategy • Present favorable rates paid by other payors as blinded data. • Also suggest selective codes for “carve-out” . Request ten codes, settle for five. Accept area-wide usual and customary for other codes when calculations indicate this as the best strategy. • Consider current “Run Rate”, if different from CY 2013. Use to Practice advantage

5. Set up a Department Fund to seed innovative programs Fund income Pathologists make charitable contributions to this Fund at their discretion Performance Based Part A – % of “dividend reinvestment” into the Department Hospital should match the Performance Based Part A, up to an agreed level Other sources - Seek outside donors such as charitable organizations, corporate donors and individuals prepare a list and rationale for specific improvements in the Department. Department Fund –Dividend Re-investment 5

6. Department Fund – Income Contributions 6

7. Seed new Department initiatives Strategic planning for Programmatic Expansion - Molecular Department promotion, including public relations sophisticated Annual Report Website development and improvement of contents Enhanced learning and education tools (Department Library) Outreach promotion Marketing collateral Department Fund - Expenses 7

8. Non-funded clinicalresearch Training opportunities for Lab Staff Travel to explore best practices at other sites Consulting services to provide objective guidance Electronic Medical Records (EMR) Connectivity and Training Distinguished Lecture Series Supporting the Hospital Cancer Center Department Fund - Expenses 8

9. Department Fund - Other Considerations “Other purposes”, as the Department Chairman may designate All expenses will be submitted by the Chairman Each expense requires Administrative approval, which will not be unreasonably withheld, as long as they are within the stated purposes of the Fund. A report showing all activity will be prepared by Hospital/Medical School Finance on a monthly basis. An Annual Report should be prepared by the Chair and submitted to Administration. 9

10. Dividend Re-Investment • “Dividend” re-investment by the Pathologists is critical Administration and Finance complain that Hospital-based physicians (not only Pathologists) have exclusive arrangements that earn income for inpatient/outpatient work but they don’t give anything back to their Departments/Hospitals • Even modest contributions are respected • These can be in the form of Expertise (if carefully documented) as well as Financial Support • A contribution, should be considered • This can be a tax exempt charitable contribution to a Department Fund from each of the Pathologists 10

11. Dividend Re-Investment- Pathologist Talent • Another “dividend” is the Pathologists’ expertise that extends beyond Department requirements AND IS NOT PAID AS PART A • Serve on a Hospital wide group for IT initiatives • Work on committees, such as credentialing, IRB and fund raising • Become an Officer of the Medical Staff • Join the Board of the local PHO • State Path Society Leadership This time needs to be quantified and presented. 11

12. Dividend Re-investment • There are many other ways this can be presented but it must be measured: • Free Services Clinic or Indigent patients • Deep Discounts Mandated by Hospital contract requirements • One approach to this investment would be to base it on the Pathology FTEs 12

13. PCCP Billing Professional Component of Clinical Pathology (PCCP) billing has a wide range of acceptance throughout the US. (none-30%+) Whenever possible, we recommend the following elements to maximize income: • Set up a separate entity to bill for these services. • An LLC is usually the best structure. • With a separate tax ID it is possible to bill for these services as “non-par” Participation status is typical when billing for anatomic pathology . • As a non participating provider there is less of a requirement to submit bills to patients for deductibles and co-pays. • Avoid billing patients and the negative PR consequence.

14. PCCP Billing • Don’t be shy about the level of professional fees. • Recent analysis of many groups billing payers as both “par” and “non par” reveals that Practice charges are often discounted automatically by 20/30% then payment is made at 70/80% of the reduced amount. • If this is true, an adjustment in fees may lead to an automatic increase in reimbursement. • While this is not always the case, average fees in the range of $18-$20, when increased to $25+ have resulted in a significant increase in payment.

15. Part B Reporting Focus • Hospitals and Medical Schools utilize accrual accounting. • Most billing system reports provide data on charges processed and cash posted. • For a busy Chair /PDAS the best focus is on reports that puts everything in focus by month of service. • This should start with the Hospital Division accessions showing those that are billed as professional only. • The ReferredDivision, assuming services are billed globally, should always be kept separate.

16. Part B Reporting Focus • The best report format will display processing in columns showing each month of service. • Keep these in quarterly blocks for ease of reading and focus. • The Power of the Pyramids allows the Chair to track activity and see problems at a glance. • Your Billing Manager should expand this report to also focus on adjustments: Contractual discounts Collection agency write offs Timely filing denials Charge reversals for coding errors • This is not recommended for a high level overview.