College of American Pathologists
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  For billing, 'one price doesn't fit all'






September 2007
Feature Story

Anne Paxton

For pathology practices in the '90s, managed care and capitation were major concerns, and PSA was set up to address that, says Al Sirmon, president of the firm based in Florence, SC.

"The competition from the national laboratories meant pathology practices needed to have marketing people out on the street developing and protecting their referral base," Sirmon says. PSA offered help with marketing, contract negotiation, purchasing, and billing and collections.

Today, capitated contracts for pathology services are rare. But discounted fee for service has pared pathologists' income from a different direction, Sirmon says. "In the '90s, many plans were still paying a high percentage of billed charges. Now you might have contracts with 25 or 30 carriers—all paying according to different fee schedules. If proper billing and reporting systems aren't in place to monitor reimbursement, it is an easy way to lose money," Sirmon says.

He agrees with other pathology leaders that the greatest threat to pathologists today is the in-sourcing of pathology by specialists. "It's a trend we're seeing throughout the country," he says. "Good reporting helps groups understand what's at stake and evaluate the options available to deal with an approach by a GI or urology group seeking to employ these strategies."

Monthly management information reports are critical as tools in understanding payer reimbursement trends, monitoring billing company performance, and understanding practice referral patterns. And those reports, Sirmon says, are more important now than ever.

"There are just so many more complex issues now, and many pathologists are finding that just being a good pathologist isn't enough to guarantee a successful practice."

When a practice weighs billing options, Sirmon says it must realize that "billing is not a commodity and one price doesn't fit all." Several factors determine the fee a billing company will charge—"volume and reimbursement rates are chief among them," he says. The Healthcare Billing and Management Association recently published national billing rate ranges, citing pathology rates between 7.75 percent and 10 percent with 8.75 percent being the average, Sirmon reports. "You can find rates all over the board, and you've got to know what's included and what's 'extra.' Look for a service provider with pathology experience, he advises, and always check references."

PSA, which has clients in 26 states, was acquired recently by Med3000, a Pittsburgh-based healthcare company. PSA will remain intact, with the same management team, and will continue to expand.

Anne Paxton is a writer in Seattle.


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