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'Other health care' no longer forgotten.

'Other Health Care' No Longer Forgotten

In the Eighties, the health care focus of government and of insurers was on inpatient utilization of hospitals. The use of outpatient diagnosis and treatment was encouraged and promoted. Payment mechanisms developed for outpatient care were part of the reason for the success that was achieved in changing hospital utilization patterns. [1] The challenge of the nineties will be analysis of and development of accountability for what is called in the Consumer Price Index and in other economic indexes "other health care"--x-rays, laboratory work, drugs, therapies, nuclear medicine, neurodiagnostic and cardiodiagnostic procedures, etc. The issue will be the constraining the use of these "other health care" services.

Utilization and cost trends in the "other health care" category have exploded in recent years. Expenses for these services have increased in excess of 18 percent annually in most markets and now exceed the cost of physician services and approach or exceed the total cost of inpatient hospital care.

Little is known about normative utilization rates for these services. Even aggregate bigures are not published frequently. In addition, changes in medical practice can create a sudden demand for a particular test. For example, the use of MRI for orthopedic knee and back procedures has become an unpublished standard of practice, and the use of CT scans for the pre-surgery diagnosis of facial and sinus conditions has increased fourfold in the past 12 months.

Fortunately, many new technologies have improved diagnostic capabilities on behalf of the individual patient. These procedures can often be accomplished at less risk or discomfort for the patient. Utilization of the techniques then increases as the procedure or test is better accepted by the patient population. Subspecialization and the interests of radiologists, neurologists, cardiologists, and other specialties have led to promotion of new technologies both to the public and to other health care professionals. Joint venture arrangements with primary physicians, referring physicians, and institutions also have promoted the use of technology. The financial strength of the ventures has led to an increase in marketing efforts and further utilization.

The physician executive's role in the analysis of technologica trends is crucial. For example, the determination of whether screening mammograms are reaching the "at-risk" population is not a simple analysis. Multiple CPT codes are assigned to x-rays of the breast, and the code for screening mammograms (76092) has just been assigned in the 1990 CPT Book. The casemix of the population studied is important. The issue of insurance coverage copayments, and deductibles will have an impact on utilization of screening mammograms. Public and professional uncertainty about the risk/benefit ratio for the procedure will vary depending on location, specialty, adn social climate. The perceived malpractice risk in providers' minds will vary. The payment mechanisms and risk arrangements for providers may actually drive up utilization. for example, capitated providers may feel a particular risk of malpractice for underutilization of mammograms that would not be felt by the fee-for-service provider.

The physician executive has to be a lead player in this arena because of the complexity of the utilization patterns and because the issues involved--quality, risk management, and provider practice patterns--are not well understood by non-medical management. The sheer number of CPT codes and the interlinking of the various diagnostic and treatment scenarios is infinitely more complex than traditional utilization measures--hospital days per thousand etc.

Although some computerization of the process is possible, most of the design of data collection and analysis rests with medical leadership. It's hard to get excited, or started, in this area, because of the complexity of the task and the uncertainty of affecting positive change. Just the presentation of the results is difficult because of their sheer volume and intricacy.

Improvements in efficiency are best obtained by applying Deming's principles [2] in selecting providers and working with them on a long-term basis to ensure high quality, accessibility, and accountability.

Specialist involvement in educating and helping the primary physician select the proper tests and sequence of testing is important. Primary and referring physicians can often come to joint conclusions that provide a consensus approach to diagnosis and treatment plans.

It is essential that the industry develop individual physician profiles so that providers can be informed of the cost and the availability of various provider options. The bottom line is that the credentialing process must attract providers who have favorable practice patterns and eliminate lroviders who insist on inefficient over-utilization.


[1] Saalwaechter, J. "Outpatient Care from the Payer's Perspective." Physician Executive 16(3): 29-30, May-June 1990.

[2] Deming, W. Out of the Crisis. Cambridge, Mass.: MIT, 1986.

John J. Saalwaechter, MD, MBAM, is Medical Director, Prudential Plus of Indiana, Indianapolis. He is Chair of the College's Society on Insurance and an associate member of its Society on Managed Health Care Organization, Forum on Computers and Information Technology, adn Forum on Quality health Care.

@ 090100247 0843ILT047PNST POLs Now Subject to Federal Standards

With the enactment of CLIA, virtually every site where laboratory tests are performed on human specimens for health assessment or for obtaining information for diagnosis, treatment, or prevention of any disease or impairment will be subject to federal regulation. On May 21, 1990, the Health Care Financing Administration (HCFA) issued proposed regulations designed to implement CLIA. Under HCFA's scheme, categories of laboratory tests have been created and standards for certification will be based on the tests that a specific laboratory site performs. The public comment period for the proposed regulations ended on August 15, 1990. HCFA will now issue regulations in final form, but the regulations as already stated will probably largely survive.


With the exception of certain National Institutes of Drug Abuse drug screening tests, CLIA does not provide exemptions to its certification requirements. Many laboratory sites that were previously excluded from federal oversight will now be subject to varying degrees of federal scrutiny, depending on the specific tests the laboratory wishes to perform. HCFA has classified tests into three categories: Level I, Level II, and tests that qualify for a "Certificate of Waiver." The Certificate of Waiver will be granted on the basis of HCFA's assessment of the complexity of the tests the laboratory intends to perform. Whether a Physician's Office Laboratory (POL) will be able to qualify for a Certificate of Waiver depends entirely on how HCFA has classified the test that the physician wishes to perform.

Test Classifications

The main factors HCFA considered in determining how a laboratory test would be classified are the degree of risk of harm to the patient if the test is performed incorrectly, the complexity of the method required to perform and/or interpret the test, and the likelihood of erroneous results. Tests that are eligible for a Certificate of Waiver are those for which HCFA has determined that:

* There is no reasonable risk of harm to the patient if the test is performed incorrectly--tests that are used to detect nonpathologic conditions, that are not used as the only indication of underlying disease, or that are used in situations that do not usually require immediate clinical intervention and are generally followed up with more specific testing or medical evaluation.

* The likelihood of erroneous results is negligible.

* Testing does not usually involve complicated instrumentation, calibration, extensive quality control, reagent preparation, multiple steps, or environmental control. In addition, testing is characterized by stable test systems that have minimal or no calculations; require inimal independent judgment and interpretation; involve minimal or no patient and sample preparation; and require minimal training and experience.

* Thee may be home methods available.

Tests that require Level I certification are those for whic HCFA has determined that:

* There may be a reasonable risk of harm to the patient if the test is performed incorrectly.

* The risk of erroneous results is present but is minimized because testing methodologies are not complex and are characterized by fes steps; previously prepared or minimal reagent preparations; equipment that requires few operational steps (minimal interaction between operator and equipment) and is easy to maintain and troubleshoot; minimal calibraton reuirements (testing systems are often self-calibrated); quality control material that are readily available; and limited analyst interpretation.

* Test performance involves the exercise of some independent judgment and a basic knowledge of method, instrumentation, and interpretation of data, but decision-making is less complex because options for action steps are few and are well defined.

*Interpretation of test results requires knowledge of a limited number of factors that can influence test results.

Tests that require Level II certification are those for which HCFA has determined that:

* There is reasonable risk of harm to the patient if the test is performed incorrectly and for some tests the risk is substantial.

* The risk of erroneous results is substantial because testing methodologies are often complex, usually involve multiple steps, adn are characterized by complicated or special reagent preparation, equipment that requires multiple operational steps (maximum operator-equipment interaction), complicated/extensive maintenance and troubleshooting, extensive calibration needs, and quality control that may require special materials and interpretation.

* Test performance involves the exercise of independent judgment and decisions may require a comprehensive understanding of the method, instrumentation, physiology, and clinical significance of the results.

* Interpretation of the test results requires knowledge of the myriad factors that can influence test results, including preanalytic, analytic, and postanalytic variables.

* More extensive procedure-specific training, including training in all aspects of the testing process, is required.

The certificate a laboratory receives will list the exact tests in each category that the laboratory is certified to perform. The degree of oversight involved will be determined by the level of tests that a laboratory performs.

Certification Requirements

The methods that HCFA will use to assess and control the quality of laboratory performance include:

* Federal, state, and local laws.

* Patient test management requirements.

* Quality control programs.

* Quality assurance programs.

* Computer system requirements.

* Proficiency testing programs.

* Personnel training and/or experience requirements.

* Unannounced on-site inspections.

Level I and II laboratories will be regulated in all of the above areas. For a laboratory that only performs tests in the Certificate of Waiver category, oversight is minimal.

Although most of CLIA's provisions were effective january 1, 1990, until July 1, 1991, HHS is without authority to inspect laboratories for compliance with most CLIA standards. Therefore, HHS has provided bor provisional certification that will be valid for two years or until HHS has completed a compliance inspection, whichever occurs first. The provisional certification will be extended until the first inspection has been completed.

Once the on-site inspection is conducted, if HHS determines that a laboratory is not in compliance with the applicable standards, the laboratory will receive a statement of teh basis of the noncompliance determination. HHS also will suspend or deny payments under Medicare and initiate action to revoke, suspend, or limit the laboratory's certification. Before the laboratory's certidication can be revoked, suspended, or limited, it is entitled to a hearing. Unless HHS has made a finding that conditions pose an "imminent and serious risk to human health," the laboratory's provisional certification will be extended until a hearing decision is issued.

Certificate of Waiver

Certificate of Waiver laboratories will only be required to file an application, pay a fee, and consent to random inspection. Ordinarily, the random inspections will be for the sole purpose of determining whether the laboratory is complying with its Certificate of Waiver by performing only the test for which the laboratory ahs obtained the certificate. however, HCFA is also empowered to conduct a random inspection when it has substantive reason to believe that testing is being performed in a hazardous manner or when it has received complaints from the public.

Level I Certification

Laboratories that perform Level I tests will be required to be in compliance with all federal, state, and local laws, including the fire and safety standards of the National Fire Protection Association. They will be required to meet "Patient Test Management" requirements, which primarily govern procedures for submission of the specimen, what must be included on the laboratory requisition, how records for specimen identification must be maintained, how records of test results must be maintained, and standards governing the referral of specimens.

Level I laboratories will be required to meet certain "Quality Control Standards," shich will focus on the facility's quality control procedures; the frequency of performance and reporting of quality control measures; requirements for the construction, maintenance, arrangement, and temperature of the physical facility; adequacy of the testing methods and equipment; equipment maintenance and function checks; procedure manuals; labeling of testing supplies; and validation of testing methods.

The "Quality Assurance Standards" for Level I require that laboratories establish and follow procedures for an ongoing quality assurance programs. The standards that HCFA has proposed are designed to monitor and evaluate quality; identify and correct problems; ensure accurate, reliable, and prompt reporting of test results; and ensure the adequacy and competence of the staff.

The "Computer Standards" are designed for laboratories performing Level I tests that use a computer system for any aspect of specimen testing and/or reporting. Laboratories that fit in this category will be required to employ and maintain procedures that ensure accurate and reliable reporting of patient results--ventilation, humidity, and temperature controls; maintenance requirements and schedules; security requirements; and specific requirements for the capacity of the computer, data entry and retrieval, and data fields.

Level I laboratories are also required to participate in a "Proficiency Testing Program" that meets HHS standards for each specialty or subspecialty in which is seeks certification. The specimens recieved through the Proficiency Testing Program must be tested with the laboratory's regular patient work load and handled by the same personnel and in the same manner as any routine patient specimen. Proficiency testing must be conducted with the same frequency that the laboratory routinely tests patient samples. There are also recordkeeping requirements.

Laboratories performing Level I tests must have a director who is a doctor of medicine or Osteopathy licensed in the state where the laboratory is located or who is a PhD in a specified science certified by a specified national accrediting board with four or more years of full-time training or experience. There is also a provision for an individual who has already met certain HHS requirements to qualify as a laboratory director. The regulation specifies the responsibilities the director must perform.

In addition to a director, Level I laboratories must have a technical supervisor and a general supervisor. while the director can qualify to serve in both supervisory capacities, if the director does not or cannot do so, there are licensing, educational, and experience criteria an individual must meet to qualify for a supervisory position.

Level I testing personnel are required to have a high school diploma, training, and licenses if the state where the laboratory is located requires licensing of technicians.

Level I laboratories will be subject to #Ujannounced Inspections" at least biennially. As part of the inspection, the laboratory could be required to allow HHS to interview its employees; permit employees to be observed performing tests, data analysis, and reporting procedures; perform procedures including test samples; and provide copies of any records or data that HHS requests. Failure to allow inspection has certain penalties, including suspension of Medicare payments, termination of Medicare participation, and action to revoke CLIA certification.

Level II Certification

For laboratories performing Level II tests, the Patient Management; Quality Control; Quality assurance; Computer System requirements; compliance with federal, state, and local laws; Proficiency Testing; and Inspection requirements are the same as those for laboratories performing Level I tests. The personnel requirements, however, are more strigent.

The Level II physician director must be certified in anatomical or clinical pathology and have four years' experience, including two years in a subspecialty subsequent to graduation. A Level II PhD director must either be certified by an appropriate board in a laboratory specialty or subsequent to graduation have had four years or more full-time training and experience, two years of which were spent in one of the laboratory specialties. There are also provisions for an individual who has been qualified as a director under certain state and federal provisions to qualify bor CLIA purposes.

Level II laboratories must have a technical supervisor qualified under CLIA to supervise each specialty or subspecialty. Although the supervisor's qualifications vary according to the specialty or subspecialty, the minimal qualifications are the equivalent of those required for a Level II director.

Level II laboratories are also required to have one or more general supervisors whose minimum qualifications are based on various combinations of education and experience.

A technologist who performs Level II tests must have a license as a laboratory technician in the state where the laboratory is located, a bachelor's degree in medical technology from an accredited college or university, and at least 12 months in an accredited school of medical technology, or possess other combinations of education and experience that HCFA has set forth.

Impact on Physician Office


The classification scheme that HCFA has proposed will result in the inability of many POLs to provide all of the laboratory tests that they have routinely provided in the past. This is primarily because the standards are tied to specific laboratory tests as opposed to being location specific. There is concern about HHS's classification of tests and the certification standards that those classifications call into play.

As presently prosed, the regulations provide Waiver Certification for only 17 tests, and only 11 tests have been classified as Level I. All other tests have been placed in Level II, which has led some experts in the laboratory industry to conclude that HCFA's classifications are not reflective of the criteria HCFA claims to have applied. In addition, it appears that HCFA has failed to consider the technology available to POLs.

Many POLs are presently performing laboratory tests that fall into all three categories. although a HCFA spokesperson has denied that HCFA has any statistics that reflect the number of POLs that perform Level I and Level II tests, the spokesperson did state that many of the tests physicians jos perform are probably Level II tests. More important, many of the tests in Level I and II are performed in POLs on a fairly routine basis. If a physician wishes to continue to perform one or more of the tests that are listed in Level II, the POL will be required to meet the same stringent standards that a hospital or commercial laboratory must meet. Clearly, the personnel requirements associated with Level II tests would be almost impossible for POLs to comply with.

HCFA must have anticipated the possibility that the new amendments could have an effect on the number of tests a physician will be able to perform in an office laboratory. It included in its proposed regulations a request for comments regarding whether there should be a mechanism that would allow physicians to perform tests that are not included in their certification when the test is essential to emergency patient care. although such a mechanism may be useful, it fails to address the greater concern that physicians will forced to abandon the more routine laboratory testing they now perform.

Although the full impact of CLIA on health care will likely not be experienced for several years, it is clear that the intent of Congress with CLIA was to ensure that the public has access to high-quality laboratory service. The question is whether the regulations proposed by HCFA will further that goal or will instead serve as yet another regulatory barrier to health care access.

Juanita Petty-Hankins, Esq., is an Associate in the Washington, D.C., offices of Epstein Becker & Green.
COPYRIGHT 1990 American College of Physician Executives
No portion of this article can be reproduced without the express written permission from the copyright holder.
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Title Annotation:insurance company attitudes toward various diagnostic procedures
Author:Saalwaechter, John J.
Publication:Physician Executive
Date:Sep 1, 1990
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