9 Ancillary Services That Can Boost Practice Revenue

Leigh Page

Disclosures

August 07, 2014

In This Article

7. Laboratory Tests

Many practices already perform their own simple lab tests. These tests, known as "CLIA-waived tests," require very minimal oversight. ("CLIA" stands for "Clinical Laboratory Improvement Amendments.")

However, CLIA-waived tests involve only a small fraction of all the tests that practices need, said Andy Gill, CEO of HealthCare Technologies in Baton Rouge, Louisiana, which helps practices set up in-house laboratories.

Only 16 tests are CLIA-waived, and important labs for PCPs, such as complete blood counts, are not included, he said. Moreover, the disposable cartridges for many CLIA-waived machines tend to be more expensive than those used in more complex tests. By graduating to moderately complex tests, Gill said practices can capture a much greater test volume. But he would not specify what volume of tests could be covered, because he said such tests vary widely by practice and by machines used.

Oak Mill Medical Associates, the Illinois internal medicine group, took on moderately complex tests in 2006. Alessi also would not specify volume but said it was significant. She added that whereas the volume of many other new ancillary services has to be built up over time, you can immediately attain high volumes with lab tests because you were ordering them already.

"You know lab test volume significant, because the outside reference labs are making money on this," she said. She also would not quote revenues from these tests, saying it can vary from year to year, owing to fluctuating reimbursement rates.

To process these tests, Alessi said Oak Mill had to invest more than $50,000 in expensive machinery and comply with much stricter oversight. She said the device-maker Beckman Coulter supplied a prostate-specific antigen testing machine for free, anticipating that the practice would have to buy the company's reagents. However, Oak Mill spent $34,000 on a chemistry analyzer and a little over $18,000 on a complete blood count machine.

In addition, Alessi hired a lab technician with 4 years of training and had to pass strict requirements used by COLA, an accreditor for practice-based lab services. Accrediting personnel make an on-site inspection initially and every 2 years. They examine records on personnel, maintenance of equipment, and other quality controls, Gill said.

One key function of the accreditors is following a lab sample through the whole process, up to reporting the results; they then grade the process, he said. Gill adds that the lab must also regularly complete proficiency testing, in which a contracted company sends lab samples to the practice for testing, then reviews the results for accuracy. Labs are also expected to run 2 controls on their own equipment each day and keep a manual spelling out all oversight activities, he said.

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