General

Question 1

Productivity

Answer 1

[number of products produced] divided by [resources used to produce the product]

in lab; billable laboratory result ÷ technical FTE

Only BILLABLE tests count towards productivity. QC/PT does not.

Question 2

Reagent rental/lease

Answer 2

The lab is billed only for the reagents used. The price includes the lease costs/depreciation of the instruments. A the end of the rental period, the instrument still belongs to the manufacturer.

Question 3

Semi-variable cost

Answer 3

Expenses that vary with test volume, but not in direct proportion to the new volume
e.g. supervisory staffing > when volume increases, additional supervisors will be needed

Question 4

Variable costs

Answer 4

Vary directly and proportionally with the volume of samples analyzed
e.g. reagent rentals

Question 5

Fixed costs

Answer 5

Do not vary over time and do not change with sample volume

e.g. new laboratory equipment, hospital overhead/admin

Question 6

Employee turnover rate

Answer 6

[number of separations/terminations] divided by [total number of employees on staff at end of a given time period]

High turnover has a negative effect, as new staff are more likely to make mistakes

Question 7

Cost of new test

Answer 7

All costs, fixed and variable, need to be included (indirect costs (such as overhead), labor costs, material costs)

Question 8

Total turnaround time

Answer 8

Sum of the pre-analytical, analytical and post-analytical intervals (therefore: order to physician notification time)

Question 9

Largest expense in clinical lab

Answer 9

Salaries (60-80% of total)

Question 10

Billing for panels (e.g. BMP)

Answer 10

Bill for entire panel, not each individual analyte (that would be illegal). Using specific CPT code. “Unbundling” is fraudulent.

Rules apply equally for inpatients and outpatients

Reimbursement for panels is lower than for the sum total of reimbursements of its components

Question 11

CPT code

Answer 11

Identifies lab test.

Both CPT & ICD-9 must be submitted for billing.

Question 12

ICD-9 code

Answer 12

Identifies medical condition; therefore establishing medical necessity for a test. Will only be reimbursed if justified.

Question 13

Lab directorship eligibility requirements

Answer 13

One year experience directing or supervising a non-waived laboratory AND 20 CME credits in lab practice

Question 14

What labs require a lab director?

Answer 14

Those that perform moderately complex testing

Question 15

Lab director responsibilities

Answer 15

1. Overall management of the lab
2. Analytical performance of all assays
3. Determining the qualifications of individuals performing & reporting test results

Question 16

Capital expense

Answer 16

Item must last longer > 1 year + cost a certain minimum amount + either replace existing equipment OR be bought to support new products or services

Question 17

Cost of PT

Answer 17

Indirect cost + fixed cost + operating expense

Question 18

Break even volume

Answer 18

Fixed cost (e.g. monthly lease) divided by [reimbursement rate minus variable cost (e.g. reagents))]

Based on the assumption that the selling price is fixed, not variable.

Question 19

DRG (diagnosis-related group)

Answer 19

For Medicare inpatients (535 groups exist)

Each DRG is assigned a weight based on the severity of the diagnosis, type of procedures performed, and presence of comorbid conditions/complications

Hospitals reimbursed for each DRG a lump sum per patient, and no additional revenue is made form performing extra lab tests for that patient

Rate determined by hospital location, setting and type

Some adjustments may be made to the payment based on patient’s age, gender, secondary problems, treatment complexity

Question 20

Direct cost

Answer 20

Integral part of producing, easily traceable and economically traceable

e.g. reagents and supplies, equipment maintenance, tech salaries

Question 21

Indirect costs

Answer 21

Benefit more than one product e.g. building rent, admin, security, transporters, telephone services, janitors…

difficult to trace (not economically feasible)

Question 22

HHRGs (home health resource groups)

Answer 22

Used by CMMS for home health aide

Question 23

RUG-III (resource utilization groups)

Answer 23

Used by CMMS for skilled nursing facilities

Question 24

CMGs (case-mix groups)

Answer 24

Used by CMMS for inpatient rehab hospital

Question 25

When do majority of errors occur?

Answer 25

Preanalytical phase (60%)

Then postanalytical (20%) then analytical (least frequent; 15%)