Using FOIA to bolster Medicare Part A negotiations

January 20, 2020

When the time comes for hospital-based pathologists to negotiate their compensation rates for Medicare Part A payments received by their hospital, many are left scrambling for hard data while trying to determine a fair price for their oversight.

And while there are formulas that attempt to provide strong estimates of a pathologist’s contributions to their hospital’s Part A compensation, the exact breakdown can also be obtained from your Medicare Administrative Contractor (MAC) by utilizing a Freedom of Information Act (FOIA) request.

As a refresher, Medicare Part A covers clinical pathology services that a pathologist performs for the benefit of Medicare patients (and other carriers who do not recognize the professional component of pathology), as opposed to hands-on services required for a specific patient specimen. Part A services include ensuring that the laboratory equipment is properly calibrated, supervising the laboratory personnel who operate the equipment, reviewing results that either fall outside ranges of normalcy that have been established by the pathologist or are otherwise unexpected, and being available to discuss with clinicians the diagnostic or therapeutic significance of results that are difficult to evaluate or that seem inconsistent with other findings.

However, these payments go directly to the hospital, which can make determining the amount owed to the pathology department somewhat of a guessing game.

“When you’re doing a hospital negotiation, it’s often difficult to carve out and say, ‘this is how much, specifically, the hospital was paid due to my work,’” said Ann Lambrix, Vice President of Client Services for Vachette Pathology. “Sometimes you work with administration that’s very well aware of how Medicare reimburses that professional component of clinical pathology. But more often than not, they’re not very in tune with how exactly that breaks down.”

That’s where the FOIA process comes into play. The FOIA law allows citizens to request previously unreleased information and documents controlled by the government. Because CMS is a government-run entity, you may request a hospital’s cost reports from the applicable MAC. In these reports, the hospital must breakdown by line item how much is paid to them for the professional provider component of Part A.

Lambrix said this process eliminates much of the guesswork involved in a pathologist attempting to determine these totals on their own.

“When you go that route, the hospital can always come back and say their calculations and numbers are different,” Lambrix pointed out. “The cost report data is much more reliable.”

And in addition to offering a firm negotiating point, requesting this information also allows groups to avoid wasting time pulling their payer mix and comparing it against their volume and hours.

While there is a cost to obtain these reports, FOIA law requires that it can only equal the cost of producing the report, which is generally low. For example, the last time we pulled this data for a client the report cost roughly $80.

Next time you’re facing a Part A negotiation, consider the use of a partner like Vachette who can assist you and intelligently articulate your position. Remember, the key is not to have an antagonistic relationship with your business partner, but rather a symbiotic one where everyone understands that fair compensation accompanied by shared risks for both sides leads to better outcomes for everyone involved.

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