Building a Profitable Lab Outreach Program

Transcription

1 Building a Profitable Lab Outreach Program FEATURED FACULTY: Paul Knoll, President, Ascent Guided Sales & Marketing Expeditions pknoll@ascentguidedsales.com Robert E. Mazer, O B E R K A L E R Attorneys at Law (410) remazer@ober.com Peter Francis, President, Clinical Laboratory Sales Training, LLC peter@clinlabsales.com

2 Speaker Bios Paul Knoll, President, Ascent Guided Sales & Marketing Expeditions Paul has over thirty years of finding unique and successful ways of planning and ascending challenging new sales pinnacles, affording him the opportunity to lead sales organizations on the adventure of a lifetime. He is an innovative, take-charge leader who has previously rejuvenated struggling sales organizations to accomplish growth and profitability in both the commercial laboratory and hospital diagnostic outreach industry. Within the past eight years has conducted market opportunity studies for twelve major healthcare systems and has successfully managed ten hospital outreach sales organizations to develop and exceed sales objectives within a highly competitive environment.5. Peter FrancisPresident, Clinical Laboratory Sales Training Robert E. Mazer, O B E R K A L E R Attorneys at Law Rob is a principal in Ober Kaler's Health Law Group. He represents hospitals, clinical laboratories and other diagnostic services providers, and physicians, particularly with respect to third-party payment, self-referral and fraud and abuse issues, and related business arrangements. Rob advises health care providers how to comply with reimbursement and regulatory requirements for diagnostic services while meeting their legitimate business objectives. He also assists providers facing government investigations and demands for the return of alleged overpayments made by government and private third-party payers. Peter Francis, President, Clinical Laboratory Sales Training, LLC Peter Francis has been involved with selling laboratory services for over 35 years. He has held sales and sales management positions with Upjohn Laboratory Procedures, SmithKline Beecham Clinical Labs, American Medical Laboratories and Quest Diagnostics. Mr. Francis has also had experience working with hospital outreach programs in sales management capacities. He is currently president of Clinical Laboratory Sales Training, LLC and is a member of the Washington G2 Advisory Board to which he has contributed several articles on selling lab services. He has also published seven articles in industry journals such as MLO, ADVANCE for Administrators of the Laboratory and Vantage Point. Mr. Francis received a BA degree from Hillsdale College, Hillsdale, Michigan and has attended numerous professional sales and management development courses during his career

3 **Certificates of attendance and CEUs, when available, must be requested through the online evaluation.** Evaluation for Live Event: We d like to hear what you thought about the audio conference. Please take a moment to fill in the survey located here: Please be advised that the links are case sensitive. Requests for continuing education credits and certificates of attendance must be submitted within 10 days of the live event. Evaluation for CD Recording: Please use the following link to submit your evaluation of the recorded event:

4 Building a Profitable Lab Outreach Program CCM Ensuring Lab Outreach Profitability Paul Knoll Lead Guide 1

5 Ensuring Lab Outreach Profitability The main thing, is to keep the main thing, the main thing Paul Knoll - Copyright ascent The Main Thing Profitability. First things first.. Market Opportunity Analysis Market Segments Reimbursement Costs to provide competitive services In-reach Affiliated practices Outreach Non-affiliated practices Paul Knoll - Copyright ascent 2

6 Market Opportunity Analysis Is there room in the market for your services? Who currently has market share? Commercial labs favorable Hospital outreach labs - limiting Do you understand the requirements to compete effectively? How do you know? Can you exceed what is currently being delivered? What does your gap analysis indicate that prevent you from competing effectively? - Operations - Managed Care - Information technology - Sales and Marketing - Leadership - Pricing Paul Knoll - Copyright ascent Financial Analysis Must have 3 to 5 Year Pro Forma Projected Revenue Base/Perk-up/Price Increases/Attrition New Sales & Marketing Expenses Operation Expenses Contribution Margin Expense per Test Capital Expenditures Cash Flow Statement Paul Knoll - Copyright ascent 3

7 Keys to Success More must haves. Executive management commitment Management reporting Revenue Operation dash-boards Sales Performance Paul Knoll - Copyright ascent Formula 4 Success Keep the main thing the main thing! Understanding your market and business + Managing your business = Higher net revenue + Lower costs = Profitability Paul Knoll - Copyright ascent 4

8 CCM Audio Conference Peter Francis President Clinical Laboratory Sales Training, LLC Hiring the right individual is critical for a successful outreach program: What type of individual will fit with your lab culture? What clinical and sales experience do you require/want? Who is going to make the hiring decision? Purposes Only 10 5

9 Many hospitals hire from within. Pros: Knows the hospital, culture, strengths, limitations, etc. If from the lab, knows the system, culture, lab medicine, transport supplies, etc. Cons: No formal training: sales, billing, compliance, connectivity If from outside of the lab, not familiar with lab lingo Purposes Only 11 Hire from outside the hospital (with sales experience) Pros: Field experience May have been trained in sales strategies and tactics Depending on past circumstances, may know the physician offices and has established relationships Con: If from a commercial setting, may struggle with differences between commercial vs. hospital policies, culture, capabilities, etc. Purposes Only 12 6

10 Initiative/self-starter Passion to learn Team-player Influencing ability Resilience Strong communication skills Strong interpersonal skills Professional in manner, dress, speech Purposes Only 13 Most hospitals do not have a sales manager Should look to outside help: With account strategizing Territory management Ride in the field and provide constructive feedback Review pre-established metrics Purposes Only 14 7

11 Do not underestimate the power and necessity of training your representative Multiple types of training: Clinical and technical training on tests/diseases Professional classroom sales training w/ role plays In-the-field coaching Compliance Billing/medical necessity Customer service Connectivity Purposes Only 15 Will vary depending on the market and geography The comp plan should be divided into two segments: Base salary (range = $42 - $65k) Variable portion (at target - min = $15k) Ratio for new rep = 65% base/35% variable (at target) Purposes Only 16 8

12 Based on new sales and upgrades New sales commissions typically last for up to 12 months Commissions should be based on net revenue Net revenue = actual collections or expected collections Must have a solid understanding of the disallowance rate if using expected collections ~25% - 40% of charges Purposes Only 17 Need to target large, profitable accounts Learn to qualify accounts and minimize or eliminate visibility with costly or lowvolume clients. Primary target examples: GP/IM Cardiology OB/Gyn Urology Endocrinology Gastroenterology Hematology/onc Rheumatology Purposes Only 18 9

13 Be aware of predominant payor and test mix Infectious disease clinic with high Medicaid/self-pay population coupled with large volume esoteric testing (HIV and hepatitis by PCR, genotyping, Lyme Ab w/ W. blot, CMV, EBV, CT/GC, etc). Drug treatment clinics with high Medicaid/self pay population (many drug screen confirmations required). STD clinics: Medicaid and self-pay Purposes Only 19 Evaluate costs associated with services: Nursing homes (phlebotomy, STATs, transportation, back-end billing) Out-of-the-way courier logistics for lowvolume clients Adding one test to the menu to satisfy one client s desire Purposes Only 20 10

14 Goal: to increase business from existing clients. Promote tests currently directed to a different lab Promote tests/methods not routinely ordered due to ignorance of availability Depending on hospital initiatives, may also include promoting other diagnostic services such as imaging. Requires cross-selling Purposes Only 21 Provide customer-care training to anyone who touches the client: Client services Couriers Sales Billing Technical staff Purposes Only 22 11

15 Instruct sales people to avoid over-promising any aspect of the lab service that is not routine. Share new sales data or start-date information with the appropriate staff. Sales people need to be vigilant of clients sending certain tests or limited work ( cherry picking ). If the sales rep is not working out to expectations, do not keep them in the job. Purposes Only 23 BUILDING A PROFITABLE LAB OUTREACH PROGRAM Legal and Compliance Issues Robert E. Mazer Ober Kaler 120 East Baltimore Street Baltimore, Maryland (410) remazer@ober.com 12

16 Overview of Presentation Fraud and abuse authorities Marketing issues Pricing issues Waiver of payments In-office phlebotomists Client entertainment Donations of electronic medical records software Federal Anti-Kickback Statute Prohibited Conduct Knowing & willful Solicitation or receipt or Offer or payment of Remuneration In return for referring a Program patient, or To induce the purchasing, leasing, or arranging for or recommending, purchasing or leasing items or services paid by Program 13

17 Federal Anti-Kickback Statute Penalties Criminal fines & imprisonment Civil money penalty of $50,000 plus 3X the amount of the remuneration Exclusion False Claims Act liability? Federal Anti-Kickback Statute Statutory Exceptions Regulatory Safe Harbors 14

18 Stark Self-Referral Prohibition Physician may not refer: Medicare (or Medicaid) patients To an entity with which the physician or an immediate family member has Financial relationship For designated health services including clinical lab services Stark Self-Referral Prohibition Financial relationship includes a compensation arrangement Compensation arrangement is arrangement involving remuneration between physician and entity 15

19 Stark Self-Referral Prohibition Remuneration excludes items, devices or supplies used solely to order or communicate results of tests or procedures Stark Exceptions In-office Ancillary Services Bona Fide Employment Rental of Office Space or Equipment Personal Service Arrangements Fair Market Value Compensation (created by regulation) 16

20 Payments Made by a Physician To a lab in exchange for clinical lab services; or To an entity as compensation for any other items or services furnished at a price that is consistent with fair market value and that are not specifically excepted under another provision Stark Self-Referral Prohibition Sanctions Denial of Payment Refund of Amounts Collected as a Result of Improper billing Civil Money Penalties of $15,000 per Item or Service Plus 2X the Amount Claimed Civil Money Penalties of $100,000 for Circumvention Schemes Exclusion False Claims Act Liability? 17

21 Marketing Issues OIG Compliance Program Guidance Required to take all reasonable steps to ensure not submitting claims for services not covered, reasonable and necessary Marketing should be honest, straight forward, fully informative and nondeceptive Marketing Issues OIG Compliance Program Guidance Requisitions forms promote conscious ordering of tests Requisitions advise that Medicare does not cover routine screening tests 18

22 Charges To Physicians For Clinical Laboratory Services Under Federal Anti-Kickback Statute Should reflect FMV, determined without regard to referrals covered under federal health care program Should exceed cost of testing, based on total costs and test volume (cost determination not limited to marginal or incremental costs) Letter dated April 26, 2000 from Kevin G. McAnaney, OIG Discounts to Referral Sources Discriminatory Billing Prohibition: OIG may exclude entity that has submitted or caused to be submitted [claims under Medicare/ Medicaid] containing charges... substantially in excess of... entity s usual charges... OIG: Discounted charges other than Medicare/Medicaid should remain substantially less than one-half of non- Medicare/non-Medicaid test volume Letter dated April 26, 2000 from Kevin G. McAnaney, OIG 19

23 Pricing Rules of the Road Never tie client pricing to referrals of Medicare/Medicaid work Ensure that client bill pricing is profitable on a stand-alone basis Be cognizant of pricing patterns across clients Waiver of Payments Waiver of Medicare/Medicaid Copayment or Deductible Specifically Prohibited Waiver of Payments Due From Patients For Services Covered By Private Third-Party Payors May violate Federal Anti-Kickback Statute if waiver benefits referring physician economically State laws addressing practice specifically or prohibiting submission of false or misleading insurance claim Contract issues 20

24 In-Office Phlebotomists Labs may provide IOPs at no cost, provided IOPs provide only specimen collection and processing services for the lab No services provided for physician s practice or in-office lab May labs pay rent to physician practices for space used by the IOP? Stark Space and Equipment Lease Exception Must be in writing Space/Equipment may not exceed what is reasonable and necessary and must be exclusively used by lessee Term must be at least one year Rental charges must be set in advance and may not account for referrals or other business generated Must be otherwise commercially reasonable 21

25 Client Entertainment No safe harbor Generally not considered problematic under the Anti-Kickback Statute if not excessive Stark non-monetary compensation exception Items or Services (Not Cash or Cash Equivalent) Annual aggregate limit of $338 ($355 for CY 2009) Does Not Take Into Account Volume or Value of Referrals or Other Business Generated Not Solicited By Physician Arrangement Does Not Violate Anti-Kickback Statute Stark Electronic Medical Record Exception Permits provision of software and related training Hardware not permitted Software must be interoperable No actions to restrict compatibility Electronic health records functionality must predominate Must include E-prescribe component May include patient administration, scheduling, billing, clinical support, etc. May not include human resources, payroll, etc. No staffing 22

26 Stark Electronic Medical Record Exception Selection criteria can include: Total number of prescriptions written by physician Size of physician s practice Number of hours physician practices Physician s overall use of automated technology Medical staff status Amount of uncompensated care provided Other reasonable and verifiable manner that does not take into account volume or value of referrals Stark Electronic Medical Record Exception Physician must pay at least 15% of cost No donor financing No dollar cap Signed written agreement Covers all items and services to be provided Sets forth Donor s cost and amount of physician s contribution Donor cannot have actual knowledge or act in reckless disregard or deliberate ignorance of fact that physician already has functionally equivalent items or services No restrictions based on payer status Cannot violate Federal Anti-Kickback Statute 23

27 Q & A Audience Q & A Ask questions via text box at lower left side of screen or your question to: questions@c4cm.com 24