June 1998

President's Message

By Susie Adams

My first responsibility as president of the Utah Chapter of CLMA was to attend the Council of
Chapter Presidents Leadership Training in Grapevine, Texas. This meeting reinforced the strength of
CLMA and the resources available to all of us at the national level. It consisted of two full days of
leadership training, strategic thinking, peer discussion groups and detailed break-out sessions. I
encourage any of you to participate in the session held as a pre-conference session, August 18th in
Philadelphia at the Annual CLMA meeting. I also learned how lucky I am to be president of the Utah
Chapter where the members step forward and participate to make this a viable

organization.

I would like to thank Khosrow Shotobani for the three years of time and energy he gave to the Utah
Chapter as President-elect, President and past-President. With his creative talent and enthusiasm, the
"Power Breakfast" format for education and networking began. It has gained national attention as
one of the most successful formats in place.

Chris Schumm and Joe Rainaldi also retired as board members. They both went above and beyond
the call of duty as the board diligently prepared to apply for Chapter of the Year. Chris tackled the
Strategic Plan while also creating, editing and distributing the Newsletter and Joe, the
Communications Section. They created such an effective model for our chapter, along with other
sections covered by the board, that we have decided to put it into action for a year before applying
for Chapter of the Year in 1999. Thanks for all of your dedication and hard work!

I'd like to welcome the new members of our board, Kathy Carlson, Paul Keoppel and Gloria Zuroff,
secretary. In addition, the board consists of Jackie Nice, past-President, Dave Young, President-elect,
Angie Remillard, Treasurer and Pat Martin, member at large. The board spent half a day in April
reviewing the by-laws, strategic plan, job descriptions and planning the year's calendar. Three areas
that I would like to see the chapter focus on this next year:

Retain and increase membership, to include diversifying membership;

Improve communication using a variety of methods (fax, e-mail, web-site, etc.);

Involve the membership through participation on committees.

Four committees are available for members' participation and input. Each has a liaison from the board:

Communication Committee

Distribution - Pat Martin

Print Media - Gloria Zuroff

Education Committee - Kathy Carlson

Health Care Policy - Paul Keoppel

Membership Committee - Ann Merkley

The purpose of the board is to handle the administration of the organization, but the organization
exists for the membership. Please get involved or at least communicate your needs and expectations
to any of the board members. I look forward to this year with the CLMA and hope the organization
can offer support and valuable information as the healthcare industry continues to change.

Reasons Why I Should Keep My Membership in CLMA Current (Why Me? Why You?)

By Ernie Sumsion

Consolidation, down sizing, burn-out, technology shifts, turnover, new owners any of these events,
or reasonable facsimiles of them, come to mind? No, this isn't a weak ploy to scare you into asking for
or coughing up the $100 or so it takes to renew your membership. Wouldn't even think about that
tactic. On the other hand, if your lab won't or can't sponsor your membership, what is a manager to
do?

The hundred bucks or so that it take to be a CLMA member may turn out to be a bargain both for you
and your laboratory. By joining and being active, you can't help but expand your network, and the
network will have some really creative and experienced managers in it. Would you rather pay a
consultant $500 a day or call a colleague that has been through the same problem for some help?
Pretty inexpensive membership.

Ever wonder where that new tech finds information so fast? Seems that it is right at his (or her) finger
tips. Actually, it is. It's called the Internet. Pay attention to the publications from CLMA they can help
you get started "surfing" the net in the best places without wasting a lot of time. Pretty inexpensive
membership.

Can't seem to overcome the objection that every other lab out there is paying "X" dollars per hour
more than your lab can? Information from national CLMA can help you show it isn't true to the
potential employee or that it is true to Human Resources. One way or the other, it can help you
resolve the problem so your lab is competitive in the labor market, and you can get on with the task of
staffing a quality lab. Pretty inexpensive membership.

Remember the Internet? You can place your open positions on the net and have a national audience
rather than a local one from which to attract qualified candidates. Or perhaps you prefer going
through recruiters (who use the internet themselves). CLMA can help you place your openings where
qualified job seekers can find them. Pretty inexpensive membership.

Having a wee bit of trouble keeping up on both technology and management issues. CLMA's
publications have an uncanny way of hitting the hot topics of the day in laboratory management.
How about cross functional department management? Anyone being affected? You can use your
network and the publications to help you succeed or cope. Pretty inexpensive membership.

Did you know that if you are a member of CLMA you can be a collaborative member of USCLS at a
very attractive and reduced rate? USCLS will keep you up to date technically and CLMA will focus
on your management responsibilities. Very nice combination pretty inexpensive memberships.

How do you know whether you and your lab are operating at a high level? Looking forward to the
next inspection? Attending CLMA chapter meetings will provide you a yardstick to help benchmark
your own performance before Administration does it for you. Now that's really inexpensive
membership.

And who knows, maybe you'll even get an opportunity to serve on one of the chapter's committees
and meet with people who really know what is happening at the front line and in the back office of
laboratory management. You just can't buy that kind of information any where. CLMA membership
is really pretty inexpensive. If your lab or department can't or won't foot the bill, may be you should
consider investing in your career and future, now.

And for you members with expired memberships, we know it is just an oversight. We are going to call
you anyway to find out what is important to you so we can focus resources on possible solutions.
Look forward to talking to you.

Utah CLMA Membership Committee

Compliance Corner

by Paul Keoppel

Hospital compliance plan

The Office of the Inspector General (OIG) issued the Compliance Program Guidance for Hospitals last

February. If you have not yet been able to read the document, it can be obtained on the Internet at

http://www.dhhs.gov/progorg/oig. There is a specific section of the plan that deals with the
laboratory. The hospital laboratory's written policies and procedures should require , at a minimum,
that:

The hospital bills for laboratory services only after they are performed.

The hospital bills only for medically necessary services.

The hospital bills only for those tests actually ordered by a physician and provided by the
hospital laboratory.

The CPT or HCPCS code used by the billing staff accurately describes the service that was
ordered by the physician and performed by the hospital laboratory.

The coding staff only submits diagnostic information obtained from qualified personnel and that
the coding staff contacts appropriate personnel to obtain diagnostic information in the event
that the ordering individual failed to provide such information.

Information that is obtained from a physician after the receipt of the specimen and request for
services is documented and maintained.

High Risk areas of the hospital plan

Claims submission should get the most attention in your compliance plan. This area is usually what
triggers aninvestigation. Among the high risk billing areas are:

Billing for items/services not actually furnished or not medically necessary

Upcoding, DRG creep

Outpatient services rendered in connection with hospital stays

Billing for physician and resident services in teaching hospitals

Duplicate billing

False or inflated cost reports

Unbundling services to maximize reimbursement

Billing for patient discharge in lieu of transfer

Curbing the patient's freedom of choice

Failure to refund credit balances

Incentives for physicians that violate anti-kickback law or physician referral restrictions

Financial arrangements between hospitals and hospital- based physicians

Failure to provide covered services or necessary care to HMO members

Patient dumping

Compliance Flashpoints

The Model Laboratory Compliance Plan from the OIG will be modified in the next couple of months. It
will look more like the hospital plan that was published in February. The word "Model" will be taken
out of the title. There will also be a change in the automated chemistry panel section because of the
new AMA CPT panels in use this year. The OIG will take your compliance plan seriously if: 1)
Resources are allocated to the compliance program; 2) The compliance program begins at the top of
the organization; 3) Any problems are followed up with disciplining of employees.

Compliance Plan Essential Elements

1. Standards of conduct

2. Training and education

3. Internal communications

4. Auditing and monitoring

5. Disciplinary guidelines

6. Responding to problems

Newsbites

By David A. Young

Association Name Change

Information form "Newsbyte" the Utah Association of HealthCare Providers News Letter"

The Utah Association of HealthCare Providers (UAHP) has changed their name to Utah Hospitals
and Health Systems Association (UHA). This change became effective June 1, 1998. This change
should better define who the Association represents, as well as provide a more memorable acronym.

University of Utah New Acquisition

The University of Utah Board of Trustees has approved the purchase of Talbert Medical Group from
MedPartners (NYSE: MDM), and Pacificare's five medical outpatient facilities operated by Talbert.
Total purchase price

approximately $35 million.

The five facilities operates in Weber, Salt Lake and Utah counties and combined with the 40 specialty
clinics located at University Hospital will provide more than 800,000 outpatient visits per year.

The Talbert Medical Group's 50-plus board-certified physicians will complement the University of
Utah health systems 700 board-certified Physicians. Final approval by State Board of Regents and
industry regulators is pending.

1998 Third Annual Executive War College Contemporary Issues in Laboratory And Pathology

Management

Utah was well represented at this meeting in May at New Orleans. Over 400 participants representing
Executives from

Commercial Laboratories, Administrative Laboratory Directors, Hospital Administrators, Pathologists,
and Consultants were at the meeting.

I requested written comments and impressions from a few of the Utah participants to share with you.

Khosrow Shotobani:

The focus of the meeting was to spotlight the trends, relationship and unique solutions that various
laboratories, hospital systems, and niche laboratories have done in order to deal with challenges of
Managed Care. Some of thechanges have occurred for the purpose of standardization and better
patient care by creating culture and a quality improvement process. (See Steve Miller's comments in
the next column). Others have done it purely for the business venture in partnership with commercial
labs or other entities, in an attempt to sustain their focus and strategic plans. In my observation one
thing was quite obvious --- most of the participants were there to gain only quick fixes that they

have been challenged with. In fact, the desperation for those fixes was so strong that various players
are willing to do any thing regardless of the logic and rational of the presented solutions. What is
ironic that the word patient, many times, did not even enter into the meetings dialogue. And finally,
one might draw the conclusion by asking, how many of these ventures and quick fixes will survive the
turbulence of the market place and demands of the medical community?? A message was echoing in
heads of those participants to "change, change, change", but then the voice

should echo "why and at what price". I suppose only time will tell!!

Victoria L. Anderson

This year the focus was on integration and disease management as the keys to cost containment and
providing quality healthcare. Pathology consolidation and the necessity of managed care
organizations (MCOs) to re-focus on the patient were also key topics.

Managed care as one of the major topics this year is telling us that quality health care must be
provided in a cost contained environment and that everyone keeps devising ways to do this by
controlling a piece of the market. But control is not what it is about--we need to truly partner on an
equal basis in order to improve service to customer. It was clear that even though managed care has
driven us to integration, most organizations, including MCOs, are not ready to integrate and utilize the
information produced by integrated organizations.

Summary: The messages conveyed at this War College:

1. Analyze your situation and develop a plan to cut your costs and provide quality healthcare
within a managed care environment.

2. Consolidating and focusing more on business aspects are becoming a necessary way of life for
Pathologists.

3. MCOs must be made aware of the importance of the laboratory in the disease management
process.

4. Laboratories must become more pro-active in the disease management process within an
integrated environment to become a part of the managed care process.

5. Let the Commercial labs service the MCOs that are only looking at labs as a commodity.

Steve Miller -

Excerpt from Steve Miller's presentation at Executive War College

As laboratorians we have challenges in keeping up with the ever-changing health care environment.
Regulatory issues, combined with demands to reduce costs, have made the role of managing and
supervising laboratory operations a challenging one. As a result, laboratory managers and
supervisors are always seeking ways of "doing more with less"without sacrificing quality. Through
much trial and error and by following concepts centered around Total Quality Management, staff
members within Intermountain Health Care (IHC) have discovered some helps in meeting a variety

of these challenges.

Through a team approach and the utilization of tools of process management, quality has been
maintained or improved and operational costs reduced. Within a managed care environment,
emphasis has been placed on managing the process of care rather than managing physicians, medical
technologists or nurses. IHC's vertical integration (i.e.bringing hospital operations together with
physician practices and health plans) has been instrumental in the standardization of clinical process
management. By using the total expertise of professionals within these three groups, there has been
improvement and benefit in total continuum of care; coordination of all healthcare needs; and
involvement of all players in making decisions relating to best practices.

The success of such coordination and integration was demonstrated recently in the treatment of chest
pains through cardiac marker testing. Cardiologists, working with ER physicians and clinical
pathologists, established a protocol for all IHC facilities. The treatment protocol defines specific
markers to be ordered, their frequency and the clinical interpretation of results. This makes possible
uniform patient treatment in any IHC facility providing a chest pain work-up.

Under the direction of IHC's Clinical Pathologists and Laboratory Services' Chemistry Guidance
Teams, standard cardiac marker methodology and uniform reference ranges were established for all 22
laboratories. Negotiations were coordinated by laboratory management for equipment and reagent
pricing, training, and test implementation. As a result of test standardization, 100% purchase
commitment and total system volumes were brought to the negotiation table. This resulted in
improved economies of scale and significant discounts and reduction in costs.

The outcome of the cardiac marker care process resulted in a uniform treatment protocol being
established by those with the expertise and fundamental knowledge throughout IHC's integrated
system. Their focus was to ensure the most complete and comprehensive cardiac marker testing
whether the patient was treated in a small rural hospital or a major trauma center. It is anticipated that
the cardiac marker testing protocol will provide uniform quality of treatment to all IHC patients as well
as significant cost savings through reduced length-of-stay for ER patients and lower number

of hospital admissions. The primary purpose of the standardization of the care process was not
focused on reducing costs, but on providing a better clinical outcome for the patient.

Health Care Policy

by Paul Keoppel

Balanced Budget Act

There has been much activity on the government front since our last newsletter. The laboratories and
hospitals are still feeling impact from the Balanced Budget Act (BBA) of last year. Many items in this
act do not go into effect until later this year, continuing into the year 2000. The BBA was the largest
change to Medicare ever. The Act will cut $100 billion out of Medicare spending.

Medicare Part C We've all worked with Medicare Part A and Part B, but now there is a Medicare Part
C. Part C is often referred to as Medicare+Choice. The Part C offers more choice of coverage for the
beneficiary. They can choose from an HMO, PPO and other plans for Medicare coverage.

Screening testing Congress wrote into the law an increase in screening procedures that Medicare will
pay for. There is expanded coverage of mammography and pap smears. Also now included are
colorectal screening and in the year 2000, PSA testing. This is money that previously would not have
been payed to the laboratories. The amount is estimated to be $4 billion.

Laboratory Fees

The national fee limitation has been lowered as of 1/1/98 to 74% of the median. There will, however, be
no more decreases in the fee schedule for the next five years. It will be frozen at the 1998 rate until
2002. A study was authorized to determine if the current 74% of the national fee schedule is adequate.
No one knows where the national fee schedule came from. Someone just made it up and Medicare has
been lowering the percent they pay off of it for the past decade. The study will look into a cost based
fee schedule.

Negotiated Rulemaking

This is a call for uniform national policies for the administration and payment of laboratory tests.
There is a provision

to divide the country into no more than five regions and to designate a single carrier to process the
laboratory claims for that region. HCFA published their intentions of this rulemaking process in the
June 3, 1998 Fededal Register, page 30166. The task of this negotiated rulemaking is to "provide that
these national polices must be designated to promote program integrity and national uniformity and
simplify administrative requirements with respect to laboratory tests."

There are several items on the discussion table.

1. Beneficiary information on claims (To make the HCFA 1500 and UB-52 more uniform to each
other)

2. Medical conditions for which a test is covered. (This is the limited coverage testing rule. Some
of the local

policies may become nationalized.)

3. Appropriate procedure codes for billing(CPT coding)

4. Medical documentation required with claim (Medical necessity and ICD9 coding)

5. Record keeping requirements

6. Electronic claim filing

7. Limitations of frequency of coverage

There are five items listed that will not be discussed in this round of rulemaking. Refer to the Federal
Register for details. CLMA is one of the parties that will be setting down with HCFA to discuss these
issues and together come up with acceptable rules and guidelines.

Diagnostic Information

The BBA made it a requirement for physicians to provide this information to providers when it is
required by Medicare for billing purposes. It also expanded the application to any diagnostic test,
which includes radiology, cardiopulmonary, etc. There was, however, no penalty attached for failure
to provide this information.

Health Care Claims Guidance Act

There has been a bill introduced in the House of Representatives, HR 3523 that would limit the
government actions under the False Claims Act as it applies to health care. The text of this bill can
most easily be obtained in the CLMA web site in the Health Care Policy section. Members are
encouraged to read this bill and send any comments to your

congressman.

CLIA Program Changes

HCFA published changes to the CLIA law in the May 14, 1998 edition of the Federal Register. No new
regulations were added. Three subparts of the law was simplified. Subpart E was modified to remove
duplicate information. Requirements are also made more clear as to the qualifications of any
organization wished to gain deemed authority for CLIA inspections. Subpart H has been rewritten to
emphasize that HCFA will use proficiency testing more for educational purposes rather than for
punitive action. Proficiency testing will not be used as the sole indicator for regulatory intervention.
Subpart Q covers the inspection process. The inspections will now be focused more on outcomes
rather than processes. Laboratories that have a good proficiency test record, good past inspections,
and have had no complaints lodged against them will be allowed to do a self survey every other
inspection cycle. This is similar to the CAP program except that the CLIA inspection cycle is two
years instead of one. Inspections are required to be announced inspections except for inspections
due to a complaint or follow-up of a poor inspection.

State Medical Technologist Registration

There was a legislative session presented by Senator Montgomery at the CLMA spring seminar.
There was discussion on how to introduce a bill to the legislature and how to get it passed. After this
session there seemed to be support for another effort for licensure of medical technologists to the
legislature. A lot things changed since this was first attempted several years ago. Medical
Technologists or Clinical Laboratory Scientists are the only professionals working in clinical hospital
setting in a position that requires a college degree that are not licensed by the State of Utah.

What are the thoughts of the membership?

What do think? What is your position? There would need to be a joint effort with the USCLS to be
successful. Bills are usually prefiled in the October/November time period in order to allow time to
legislative research. If this is something that CLMA members believe is worthwhile, now is the time to
start the process.

Call or write to a member of the Health Policy Committee to voice your opinion.

David Young 621-8136

E-mail young@inconnect.com

Paul Keoppel 442-4288

E-mail copkeopp@ihc.com

Spring Meeting Recap

By Jackie Nice

The USCLS/CLMA Spring Meeting at the Salt Palace was a success. The survey results show
excellent approval ratings for the breakout sessions. We had a total member attendance of 169 with 18
vendors represented. The forensic breakout session was the most popular, with an attendance of 39.
The second most popular was the "Spider Spider" breakout with 31 attending. Don Gayle from KSL
proved to be extremely entertaining, while Dr. Brent James gave us some of the latest and greatest on
clinical outcomes.

We thank you all for your support of the Spring Meeting. The next meeting is scheduled for March 8
and 9 (Monday and Tuesday) of 1999. The planning committee will be using your comments about
the food and parking for next year.

Your input is vital to making this an event worth attending. Hope to see you there next year!

June 1998 Newsletter

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