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Chapter 37 : Charges and Fees for Laboratory Services

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Charges and Fees for Laboratory Services, Page 1 of 2

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Abstract:

This chapter discusses the four key concepts related to payment for laboratory services. These concepts include: know your real test costs; set charges and accept fee schedules that guarantee a reasonable profit margin; set charges to be market competitive and provide services that are better than those of your competitors; and avoid any appearance of kickbacks. A number of general principles guide the process of setting a charge. One must consider the actual total costs and the expected reimbursement, so that one can exceed the break-even point. One must review the market situation and ensure that charges are comparable to those of competitors unless the service offered has a quantifiable value-added component. Counter to attempts to develop rational charges based on real costs and net income is the concept of payor-established fee schedules. Laboratory tests that have both a technical component and a physician interpretation component are priced on the Medicare Physician Fee Schedule (PFS). Payments on the PFS are updated according to a complex formula for both technical and professional components and include consideration of relative value units for physician, practice, and malpractice expense adjusted by a conversion factor based on the geographic practice cost indices. To determine if a proposed payment amount is acceptable, one must know (or project) the utilization rates for services, including rates of use of add-on and reflex tests. One should understand the patient mix according to diagnoses and/or medical subspecialty to help project utilization of specific, especially esoteric or niche, tests.

Citation: Baselski V, Weissfeld A, Sorrell F. 2014. Charges and Fees for Laboratory Services, p 646-653. In Garcia L (ed), Clinical Laboratory Management, Second Edition. ASM Press, Washington, DC. doi: 10.1128/9781555817282.ch37

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References

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Tables

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Table 37.1

Recommendations related to fee schedules

See reference .

Citation: Baselski V, Weissfeld A, Sorrell F. 2014. Charges and Fees for Laboratory Services, p 646-653. In Garcia L (ed), Clinical Laboratory Management, Second Edition. ASM Press, Washington, DC. doi: 10.1128/9781555817282.ch37
Generic image for table
Table 37.2

Key concepts related to successful reimbursement

Citation: Baselski V, Weissfeld A, Sorrell F. 2014. Charges and Fees for Laboratory Services, p 646-653. In Garcia L (ed), Clinical Laboratory Management, Second Edition. ASM Press, Washington, DC. doi: 10.1128/9781555817282.ch37

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