General Flashcards
Productivity
[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.
Reagent rental/lease
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.
Semi-variable cost
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
Variable costs
Vary directly and proportionally with the volume of samples analyzed
e.g. reagent rentals
Fixed costs
Do not vary over time and do not change with sample volume
e.g. new laboratory equipment, hospital overhead/admin
Employee turnover rate
[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
Cost of new test
All costs, fixed and variable, need to be included (indirect costs (such as overhead), labor costs, material costs)
Total turnaround time
Sum of the pre-analytical, analytical and post-analytical intervals (therefore: order to physician notification time)
Largest expense in clinical lab
Salaries (60-80% of total)
Billing for panels (e.g. BMP)
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
CPT code
Identifies lab test.
Both CPT & ICD-9 must be submitted for billing.
ICD-9 code
Identifies medical condition; therefore establishing medical necessity for a test. Will only be reimbursed if justified.
Lab directorship eligibility requirements
One year experience directing or supervising a non-waived laboratory AND 20 CME credits in lab practice
What labs require a lab director?
Those that perform moderately complex testing
Lab director responsibilities
- Overall management of the lab
- Analytical performance of all assays
- Determining the qualifications of individuals performing & reporting test results
Capital expense
Item must last longer > 1 year + cost a certain minimum amount + either replace existing equipment OR be bought to support new products or services
Cost of PT
Indirect cost + fixed cost + operating expense
Break even volume
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.
DRG (diagnosis-related group)
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
Direct cost
Integral part of producing, easily traceable and economically traceable
e.g. reagents and supplies, equipment maintenance, tech salaries
Indirect costs
Benefit more than one product e.g. building rent, admin, security, transporters, telephone services, janitors…
difficult to trace (not economically feasible)
HHRGs (home health resource groups)
Used by CMMS for home health aide
RUG-III (resource utilization groups)
Used by CMMS for skilled nursing facilities
CMGs (case-mix groups)
Used by CMMS for inpatient rehab hospital
When do majority of errors occur?
Preanalytical phase (60%)
Then postanalytical (20%) then analytical (least frequent; 15%)
