Contracting with the "Big labs"

[caffeinegirl]

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So I just found out that a few private groups in the area have AP service contracts with Quest. Huh? How does that work? Have any of you heard of such arrangements? Does the commercial lab do the TC and give a cut of the PC to the pathology group? Or does the pathology group do the PC and TC for a reduced rate for Quest?
It seems like an arrangement made out of desperation to keep local business....

Would be interested to hear if any of you have had experience with this.

 

[LADoc00]

So I just found out that a few private groups in the area have AP service contracts with Quest. Huh? How does that work? Have any of you heard of such arrangements? Does the commercial lab do the TC and give a cut of the PC to the pathology group? Or does the pathology group do the PC and TC for a reduced rate for Quest?
It seems like an arrangement made out of desperation to keep local business....

Would be interested to hear if any of you have had experience with this.

Yes. it is common.

Works a variety of ways:
1.) Quest does the TC and the group reads the slides, often for about 100% Medicare sometimes less or more, the group then either bills the client directly or bills Quest the contracted rate
2.) Quest sends the work to the group for a global read
3.) Quest actually employees someone in the group and for X amount of each week, they work on Quest cases

Be careful about over generalizing as the some of people I have seen do this reap very sizable financial rewards. For example, lets say Dr. Wong is a Pathologist at Methodist General. He has a traditional TC/PC split with the hospital and is a sole practitioner (although has PT relief for vacations etc). Quest comes along and offers him some overflow work from his area. Work he doesnt get for a variety of reasons (perhaps the Hospital's TC isnt contracted etc). He agrees and bills Quest directly. Perhaps he is in a state where Quest can just hand him cash directly, not California but they could in Texas. Perhaps its a good amount of cash because Dr. Wong has the ability to send other tests to Quest, flow, mol path etc.

The extra $ can end up stacking quite nicely.

 

[caffeinegirl]

Thanks for the info LADoc00. Yeah, if outside of California then I can see how that can be a very lucrative deal.
But here in California I don't know how these practices would make par of what they would if billing these clients globally directly without Quest. I guess it's lost business without Quest? That brings up my next question...are these contracts stable? How can this be financially lucrative for the big commercial lab compared to if they funnel everything to their employed pathologists (in settings #1 and #2 of LADoc's post). What's preventing the big commercial lab from gobbling up the business entirely? You can imagine that seeing their presence around here definitely made me a little jittery...

 

[Torsed]

Just watch out because if you are the low man on the totem pole in labs like this when slash and burn time comes, you could be left without a job. Quest yanked outta some of their New Orleans lab and the low guy pathologists (or rather least favorites) were left scrambling for a job.

Like Rambo says: I'm expendable.

YOU NO EXPENDABLE RAMBO!

 

[LADoc00]

Thanks for the info LADoc00. Yeah, if outside of California then I can see how that can be a very lucrative deal.
But here in California I don't know how these practices would make par of what they would if billing these clients globally directly without Quest. I guess it's lost business without Quest? That brings up my next question...are these contracts stable? How can this be financially lucrative for the big commercial lab compared to if they funnel everything to their employed pathologists (in settings #1 and #2 of LADoc's post). What's preventing the big commercial lab from gobbling up the business entirely? You can imagine that seeing their presence around here definitely made me a little jittery...

Big labs like Quest make their margins in high throughput automated lab operations not reading glass. They get biopsies as pull through but I have honestly not seen them go after Anatomic business with any real zeal, they leave that to smaller fish. And there are plenty of these smaller fish with very sharp teeth...me being one.

 

[WEBB PINKERTON]

Quest does own Ameripath......They go after AP with zeal where I am at.

 

[pathstudent]

Quest does own Ameripath......They go after AP with zeal where I am at.

Right.

The scenarios ladoc talks about are what the old timers in my group talk about doing back in The 80s back when the refernece lab was called national health Every market I have been in quest owned the pathologist via ameripath or employed them directly. Same with labcorp.

If given the offer to sign out outpatient cases for pc only, i would gladly take it, but It is always best if you can get the tissue yourself, process it yourself (or subcontract it), and then bill the global.

 

[WEBB PINKERTON]

Right.

The scenarios ladoc talks about are what the old timers in my group talk about doing back in The 80s back when the refernece lab was called national health Every market I have been in quest owned the pathologist via ameripath or employed them directly. Same with labcorp.

If given the offer to sign out outpatient cases for pc only, i would gladly take it, but It is always best if you can get the tissue yourself, process it yourself (or subcontract it), and then bill the global.

I haven't seen the big boys offer anyone the PC only where I live. My market is like yours...You are either "owned" by ameripath or employed directly. Its hard for me to be against in-office labs because the current situation sucks so bad. Let's see, let Ameripath "own" me or some specialist. What difference does it make?

 

[pathstudent]

I haven't seen the big boys offer anyone the PC only where I live. My market is like yours...You are either "owned" by ameripath or employed directly. Its hard for me to be against in-office labs because the current situation sucks so bad. Let's see, let Ameripath "own" me or some specialist. What difference does it make?

Well I would take being a hosptialist based pathologist working for ameripath over being a pod lab pathologists or working in a cubicle for any corporate lab any day just because the work would be more stimulating (for me). However it would be tough knowing that you are making only 50% what you would make if you were a partner in a small group.

 

[LADoc00]

Quest does own Ameripath......They go after AP with zeal where I am at.

Ah that is right, there is no Ameripath really left where I am, forgot about that.

Regardless I doubt Ameripath is much compared to the Clin Lab side of the Quest Business.

 

[WEBB PINKERTON]

I wasnt sure if Ameripath was big out there or not. I do business with one Quest owned lab in California, Specialty labs. Quest bought Specialty sometime in the last 5 or 6 years.

What ever happened to Westcliff labs in California? They were pretty big before they ran into money trouble. Labcorp bought them out after they went bankrupt it seems like. I always wondered how that worked out for them.

 

[LADoc00]

I wasnt sure if Ameripath was big out there or not. I do business with one Quest owned lab in California, Specialty labs. Quest bought Specialty sometime in the last 5 or 6 years.

What ever happened to Westcliff labs in California? They were pretty big before they ran into money trouble. Labcorp bought them out after they went bankrupt it seems like. I always wondered how that worked out for them.

Quest was a big competitor for me in outpat clin labs so I went with a long term contract with Speciality. Even though Speciality knew I hated Quest, they hid the fact they were in process of a buyout until after I signed and they installed the EMR interface.

Often when a company acts shady it is because they are trying to book the value of deals ahead of time to make their numbers look good to a suitor. So if all the sudden you engage a ref. lab with a "hurry up" mentality be wary of a dark figure in the background lurky around Dol Guldur.

 

[WEBB PINKERTON]

Speciality was independent when I started doing business with them back in early 2000s. I figured they would sell out at some point so I wasnt shocked. When they did sell, I made a little money since I had some Specialty stock that I bought low. I havent noticed any change in service since the change. Seems like Westcliff and Specialty were involved in some legal case after Quest came in.

 

[caffeinegirl]

Just a follow up..heard through the grapevine that a dermpath was reading out slides for Labcorp for PC only (he was part of a private group) and then stopped because the Labcorp reps were going to his private clinicians and telling them send to Labcorp since he read for them. So there are cases of big labs going for the little fish....better grow some sharp teeth soon!!