The incorporation of new technology into the system is affected by how finely the unit is defined. Selection of the unit of payment should include consideration of administrative feasibility, efficiency, incentives for appropriate use of services, and adaptability to new technology. By determining the size of the covered groups, Medicare would effectively be deciding how many laboratories in each area (or nationwide) would get Medicare business, which in turn could have tremendous implications for the numbers and types of laboratories that survive in future years. One or more laboratories would be paid a capitated amount to provide required laboratory services to the covered group of beneficiaries. It would be necessary to determine an appropriate per-person capitation payment rate. This approach would require Medicare to contract selectively with certain laboratories to provide services to identifiable subgroups of beneficiaries, possibly on the basis of geography. 4 The latter approach is rarely used.Ĭapitated payments for laboratory services under fee-for-service Medicare are conceivable, although the committee is not aware of this method being used. Two basic approaches are used to capitate laboratories: (1) a managed care organization pays the laboratory an agreed-upon amount per member per month to provide all, or a defined list of, ordered laboratory services or (2) the managed care organization includes laboratory services in the capitated payment to the physician. Increasingly, private health plans that receive capitation payments from Medicare under Medicare+Choice or from private purchasers, use capitation payments to buy laboratory services. The use of capitation in the health sector grew during the 1990s. Grouped or panel tests could be a component of a system using payment per test or service, but could not be a separate option, because bundling is not appropriate for all tests.Ĭapitation. Relatively few tests are included in panel fees, but they tend to be among those most frequently ordered. The appropriate use of panel payments is complicated, in part, because the definitions of panels as well as the rules governing their payment have changed frequently over the years. The payment for automated chemistry panels should be less than the sum of payments for individual tests in the panel because of economies of scale. If the test can be done on a multichannel analyzer, the laboratory’s cost savings from performing all of the tests at once should be reflected in the payment. For tests that are routinely and frequently ordered together, bundling them and using panel-level payments can create administrative savings to physicians and the program.
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