Out of Network in 2018

I work for a small (newer) lab in a niche market, currently only at roughly 5 million in net revenue. The only in-network contract is Medicare, but OON reimbursement for commercial payers looks great as of right now. They don’t balance bill patients. I have primarily worked with in-network labs in the past, so I know nothing about legality, other than “you have to make a reasonable attempt to collect.”

My questions:

-What is to come in 2018 with OON labs?
-How long can they keep current practices up before getting a lawsuit?
-What entity actually files suit a lawsuit?
-Will sales reps be held liable in the event of a lawsuit?
-What is the play for these types of labs? Just stow away some cash for the inevitable lawsuit and make millions in the meantime?

 

Lab industry is dead. They will get audited, and you will not get paid.

 

None of these questions are relevant. You're focusing on the wrong thing entirely.

The question you should be asking is "Can I get business this way?". The answer is almost assuredly "no" and here's way.

Private payors are far more organized than they were even 5 years ago. When they see OON claims come through for a lab they dont recognize, they react. Usually with a threat to the physician thay includes reduced reimbursements (directly or indirectly) should they continue to refer specimens out of network.

Secondly, physicians are being graded on how much they spend. Once they find out you are billing OON rates, it's over for you.

Either way you are going to cost the doctors money, and nobody is going to use a lab that does that. Period.

 

Right, I get that. I know it’s going to be a tough conversation and most aren’t going to risk it. But typically (in my territory at least), I’ve seen the smaller physician groups fly under the radar with private payers when it comes to OON insurances. Which would leave about 20%-30% of my territory as valid prospects for now.

I’m mainly just curious as to how long smaller labs like this can keep it up (I.e.- 50 million revenue?, 100 million revenue?, 500 million?, etc) before shutting down or needing to contract with insurance carriers.

Ya know, I’ll just be a piece of shit by contributing to our rising cost of healthcare for a little bit longer, make some cash and then get out.

 

One other thing not mentioned above is the high deductibles now in almost all insurances when a patient goes OON. The lowest deductible for OON lab claims i have seen is $9000 per year. This is a bigger issue for the lab because if they do not balance bill a patient they will not collect any money. As an in-network lab, my company has been getting about 3-4 call per day from doctors looking for an IN solution. The doctors state that at first their current OON lab did not bill patients, but had to as they had little revenue coming in because of OON deductibles. Be very careful as you will not get paid. What region are you in? My company may be able to help you out!

 

OON deductibles are a bigger issue than insurers threatening the doctor. They are as low as 9k and as high as 20k. This will kill your business more as your lab won't have revenue unless billing patients. If you bill the patients the doctors will leave. Stay with an IN lab and you will not have any worries. Otherwise you are taking a big risk of low commissions.

 

That’s the thing though. The main test is currently being reimbursed at $500-800 per test. Each test bills out at $1600-2000. Lab isn’t balance billing the patient or the doc. They’re just collecting that in-network Medicare reimbursement and the OON reimbursement from private payers, and writing off the rest. I’m assuming they’re putting money aside for any future legal matters. But until then, they’re just cashing fat checks. Like tox used to be. I just don’t know how long they can keep doing it

 

If I were you I would not get involved with this lab. By not balance billing on OON work, they are setting themselves up for a kickback violation, which is criminal. We are in a very tough audit environment and the DOJ is getting involved. They are going after labs, doctors and sales reps. Be careful with these shady companies!

 

Thanks for the advice!

Definitely shady billing practices. I’m curious as to what DOJ could charge a sales rep with. Because it doesn’t really seem like kickback, because doctor has no financial gain for sending to the lab. It just eats away most of the patients deductible.

 

I’m not the original poster, but the lab and the sales rep would be culpable. When you write off any business, say commercial, it can be seen as an action to secure the physician’s Medicare business. This is why, in a client-bill market, you can’t price tests under its cost of testing or under fair market value. You can’t provide an unprofitable service, if the only thing which would make it profitable is the Medicare specimens. Not an arm’s length transaction, but an inference to the anti-kickback statute.

It doesn’t matter if the physician has no financial gain. However, if the OIG got involved, you bet they would investigate the physician. What is this doc getting to stay with this lab – opposed to doing business with a lab that is in network?

 

http://www.mckesson.com/bps/blog/not-charging-out-of-network-patients-for-lab-tests-could-violate-anti-kickback-statute-oig-concludes/

 

You're giving private patients free labwork while billing Medicare.

How do you not understand how that looks to the feds?

 

Feels the OP just wants someone to reinforce the decision he's already made.

The out of network strategy is a bad one.

 

Total BS. If the lab doesn’t balance bill, they’re not going to be hauled off or shutdown. They’re not doing doctors any favors by not balance billing. Incorrect definition of the law.

 

This is silly. If the private lab is performing a test, let’s say T-Spot, and the big labs are performing Quantiferon, and the doc favors T-Spot, guess where the specimens are going? OIG can’t accuse a lab of klckbacks if the private lab has a hot female rep, while the big lab has an overweight guy, and the doc prefers working with the female.

 

Yes they are doing the doctor a favor. By not balance billing they are giving free work to the patients and getting the medicare work from the doctor. The doctor can now use only 1 lab and not have to deal with the patients complaints about bills from the lab. This was all outline in an OIG opinion in the link below:

https://oig.hhs.gov/fraud/docs/advisoryopinions/2015/AdvOpn15-04.pdf

 

Yes they are doing the doctor a favor. By not balance billing they are giving free work to the patients and getting the medicare work from the doctor. The doctor can now use only 1 lab and not have to deal with the patients complaints about bills from the lab. This was all outline in an OIG opinion in the link below:

https://oig.hhs.gov/fraud/docs/advisoryopinions/2015/AdvOpn15-04.pdf

 

This is a LabCorp or Quest employee speaking. This is a total lie. As if a lab eating a balance of bill of $75, for example, is a kickback scheme. Ridiculous. No one is gaining here.

 

More convoluted hogwash. This is the jaywalking of laws. And patient letter of financial destitute is sufficient to exclude a lab from any penalties.

Nice try, LabCorp/Quest rep.

 

I like how you think an OIG alert is hogwash. This is what is going on in the OON world. I am not a Quest of LC rep. I work for a small lab in the NE. I agree with you that it is BS, but this is what is happening now. My lab is IN for some insurance and OON. We balance bill everyone. A letter of fiancial destitute is not enough. You need proof in the form of Bankruptcy papers, bank statements, unemployment check stubs, etc. My company was audited on this last year by CMS's ZPIC contractor. They asked for private payer infoamtion and specifically for proof of co-pays and deductibles. Don't be fooled into thinking a letter is sufficient. It is not. Everyone needs to follow the rules because if one lab pulls illegal shit, the payers think all labs will.