I would like your commentary on my response to a threat to my hospital exclusivity contract.

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Torsed

Deo Vindice.
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Received this as a client bill heavy GI doc wants to send specimens out of our hospital facility where I have an exclusive contract. I've signed out thousands of peds GI cases, and the few that were difficult, expert opinion agreed with me. The obvious problems are there. I wonder if it would be a Stark violation. Basically I take it as jump in the lake we don't want you to read our path. My response is as nice as I could have put it.
Opinions? Critiques? I appreciate all of the insight the usual group has.

EMAIL TO ME:
Good afternoon, Dr. TORSED.

About a week ago, I discussed with the hospital CEO our decision to hire a GI trained pediatric pathologist. Though we feel that you are an outstanding physician, the specificity provided by this pathologist will best serve our patient population and provide continuity as we expand to other locations.

The CEO stated that your hospital has a contract with your group to provide all of their path work, but that I should speak with you regarding an exception for our patients. Our plan is to begin performing all of our procedures at your hospital, but in order to move forward with this, we would have to have access to our biopsies.

Please let me know if you are amenable to this arrangement, or if we need to discuss further. Of course, any arrangements that we make will remain completely confidential.

Again, thank you for all of your work on our patients’ behalf.

Sincerely,
XXXX, MD

MY RESPONSE:
Dear Dr. XXXX:

Thank you for the interesting e-mail. As I understand your e-mail, you wish to transport biopsies collected on site at my hospital to an off site location for processing and interpretation by a GI trained (but there is no board in GI pathology) pediatric pathologist (who rarely work outside of a large Children's type hospital or very large pathology group. This is a very peculiar arrangement.

I read from your email that you mention expanding to other locations, but then go on to say you will stay at our hospital, this is confusing.

I have an exclusive contract and will bill for the professional component for all anatomic pathology specimens and biopsies performed at our hospital. This is my livelihood, which I am sure you are aware. This is standard for all the hospital laboratories along the coast and in the nation as well as our radiology and anesthesia physician groups as well. I hope you can appreciate the gravity of the situation if every surgeon decided to send pathology to whoever they want because I made an exception, it would be a lord of the flies type of result and marked confusion. Thus the overall necessity of exclusive contracts.

Further, being the medical director of a high complexity laboratory I will not take the malpractice risk for myself nor this facility to have an off site, non privileged / credentialed pathologist to read the pathology work done that originates in my home hospital and is guaranteed by contract.

No other pathologists other than myself and Dr. YYYY have medical staff privileges at our hospital.

If there is any other options or discussion you would like to discuss that allows our facility to function as it should please feel free to communicate back.

TORSED

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Received this as a client bill heavy GI doc wants to send specimens out of our hospital facility where I have an exclusive contract. I've signed out thousands of peds GI cases, and the few that were difficult, expert opinion agreed with me. The obvious problems are there. I wonder if it would be a Stark violation. Basically I take it as jump in the lake we don't want you to read our path. My response is as nice as I could have put it.
Opinions? Critiques? I appreciate all of the insight the usual group has.

EMAIL TO ME:
Good afternoon, Dr. TORSED.

About a week ago, I discussed with the hospital CEO our decision to hire a GI trained pediatric pathologist. Though we feel that you are an outstanding physician, the specificity provided by this pathologist will best serve our patient population and provide continuity as we expand to other locations.

The CEO stated that your hospital has a contract with your group to provide all of their path work, but that I should speak with you regarding an exception for our patients. Our plan is to begin performing all of our procedures at your hospital, but in order to move forward with this, we would have to have access to our biopsies.

Please let me know if you are amenable to this arrangement, or if we need to discuss further. Of course, any arrangements that we make will remain completely confidential.

Again, thank you for all of your work on our patients’ behalf.

Sincerely,
XXXX, MD

MY RESPONSE:
Dear Dr. XXXX:

Thank you for the interesting e-mail. As I understand your e-mail, you wish to transport biopsies collected on site at my hospital to an off site location for processing and interpretation by a GI trained (but there is no board in GI pathology) pediatric pathologist (who rarely work outside of a large Children's type hospital or very large pathology group. This is a very peculiar arrangement.

I read from your email that you mention expanding to other locations, but then go on to say you will stay at our hospital, this is confusing.

I have an exclusive contract and will bill for the professional component for all anatomic pathology specimens and biopsies performed at our hospital. This is my livelihood, which I am sure you are aware. This is standard for all the hospital laboratories along the coast and in the nation as well as our radiology and anesthesia physician groups as well. I hope you can appreciate the gravity of the situation if every surgeon decided to send pathology to whoever they want because I made an exception, it would be a lord of the flies type of result and marked confusion. Thus the overall necessity of exclusive contracts.

Further, being the medical director of a high complexity laboratory I will not take the malpractice risk for myself nor this facility to have an off site, non privileged / credentialed pathologist to read the pathology work done that originates in my home hospital and is guaranteed by contract.

No other pathologists other than myself and Dr. YYYY have medical staff privileges at our hospital.

If there is any other options or discussion you would like to discuss that allows our facility to function as it should please feel free to communicate back.

TORSED

I think it is a good response. Does the admin have your back? ( probably not if this somehow makes them more money) Hardball is a “lawyer letter” explaining tortious interference with a contract.


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I think it is a good response. Does the admin have your back? ( probably not if this somehow makes them more money) Hardball is a “lawyer letter” explaining tortious interference with a contract.


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Thanks for the input. The CEO does support me (at least to my face). I do like the letter idea.
 
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I think it is a good response. Does the admin have your back? ( probably not if this somehow makes them more money) Hardball is a “lawyer letter” explaining tortious interference with a contract.


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Probably does not qualify as tortious, which usually requires deception or dishonesty. I would have not responded to the GI doc. I doubt the hospital cares enough about him to deviate from the contract. Torsed should be OK.
 
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Probably does not qualify as tortious, which usually requires deception or dishonesty. I would have not responded to the GI doc. I doubt the hospital cares enough about him to deviate from the contract. Torsed should be OK.

No deception or dishonesty required. The potential defendant just needs to know 1.there was a contract and 2.
intent to induce the admin to not adhere to the terms of the contract.


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Is the real reason behind this request the GI group looking to internalize pathology (TC, PC or both) and produce another revenue stream? Are they currently not doing all of their endoscopy within the hospital walls?
 
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They must want to internalize it without the hassle of building an endoscopy center. I had a couple urologists try this sh** and put a stop to it asap.


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Urologists are notorious for this crap. I've seen them want the specimens sent to THEIR in-office lab.

This looks like the GI docs are wanting to internalize pathology to me. Another reason to crap in a box and avoid these scum.
 
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This really sounds like they want to self-refer specimens to make extra bucks. Perhaps I missed something over the past 10 years of pathology exposure, but I don't think there's anything special about luminal GI peds biopsies. Unless this guy is going to be doing a lot of pediatric liver core biopsies for weird and rare stuff, I don't think his "we need a GI specialist" argument is valid. Also, you may want to explain to the CEO that specimens leaving his/her hospital means no TC reimbursement for the hospital, especially if this guy is going to do a lot of outpatient biopsies there.

My take on it is just one exception will allow the floodgates to open for everybody's exceptions, and then you'll be left with nothing.
 
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This really sounds like they want to self-refer specimens to make extra bucks. Perhaps I missed something over the past 10 years of pathology exposure, but I don't think there's anything special about luminal GI peds biopsies. Unless this guy is going to be doing a lot of pediatric liver core biopsies for weird and rare stuff, I don't think his "we need a GI specialist" argument is valid. Also, you may want to explain to the CEO that specimens leaving his/her hospital means no TC reimbursement for the hospital, especially if this guy is going to do a lot of outpatient biopsies there.

My take on it is just one exception will allow the floodgates to open for everybody's exceptions, and then you'll be left with nothing.

I did explain TC loss to the CEO.

Also, I think the surgery center the peds GI group was associated with had a falling out and they are looking for another lily pad. They usually take 5 biopsies of every EGD as standard. 90 percent are unremarkable.
 
I did explain TC loss to the CEO.

Also, I think the surgery center the peds GI group was associated with had a falling out and they are looking for another lily pad. They usually take 5 biopsies of every EGD as standard. 90 percent are unremarkable.

So in reading the letters again, I'm a bit confused...what's new. Is this GI doc wanting to have the specimen globally handled offsite by his lab/pathologist or do the TC at the hospital and have a pathologist not affiliated with your group come in and read them? The specimen leaving the hospital is a non starter for sure. But the second option can be hilariously manipulated to your advantage.

Me to the GI doc and CEO: Sure, we can have a GI Peds pathologist here to soley read your specimens. Said pathologist would have to be credentialed at this hospital and ALL professional services rendered by this pathologist would have to be contractually billed through my group and would be reimbursed to this pathologist at no more than 50%. We have a deal?

That's a passive income stream that even LADOC would be jealous of.
 
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My take here (having gone through something similar)- this may warrant a phone call with other parties to make sure you really understand what they want. If the demand is that there is a GI-trained pathologist they want to hire because they feel it is important for patient care (what is implied from their email, regardless of whatever underlying malintent), you can use the information to better position your response.

You don't want to burn bridges or be put in a position where your contract is terminated and even if you win you have to deal with guys who try to undermine you to the hospital and administration.

There is a possible win/win in the scenario above. You can communicate that you understand their need and can try to accommodate, You can negotiate that they can find the GI-trained pathologist, but YOU will hire them and they work for YOU. All expenses incurred in the process will be paid by them (including liability) as this is part of your exclusive contract with the hospital. This prevents your fears (that they will push you out with their own path) while at the same time cutting out the patient care argument from them.

/Profit!
 
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I like GBW's response above; it will force them to be more explicit about their intent (which seems fairly clear in their insistence that they need "access to all our biopsies"). You can also say that it would improve patient care to have the new hire in your group for QA/QC of difficult cases between pathologists.
 
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Who is getting TC component?? The hospital or you?
 
Maybe one of the GI docs married a GI trained pediatric pathologist. That is another thing I have seen over the years. Using their power to try to force us to absorb the succubus.
 
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Maybe one of the GI docs married a GI trained pediatric pathologist. That is another thing I have seen over the years. Using their power to try to force us to absorb the succubus.

Those damned incubi !


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Received this as a client bill heavy GI doc wants to send specimens out of our hospital facility where I have an exclusive contract. I've signed out thousands of peds GI cases, and the few that were difficult, expert opinion agreed with me. The obvious problems are there. I wonder if it would be a Stark violation. Basically I take it as jump in the lake we don't want you to read our path. My response is as nice as I could have put it.
Opinions? Critiques? I appreciate all of the insight the usual group has.

EMAIL TO ME:
Good afternoon, Dr. TORSED.

About a week ago, I discussed with the hospital CEO our decision to hire a GI trained pediatric pathologist. Though we feel that you are an outstanding physician, the specificity provided by this pathologist will best serve our patient population and provide continuity as we expand to other locations.

The CEO stated that your hospital has a contract with your group to provide all of their path work, but that I should speak with you regarding an exception for our patients. Our plan is to begin performing all of our procedures at your hospital, but in order to move forward with this, we would have to have access to our biopsies.

Please let me know if you are amenable to this arrangement, or if we need to discuss further. Of course, any arrangements that we make will remain completely confidential.

Again, thank you for all of your work on our patients’ behalf.

Sincerely,
XXXX, MD

MY RESPONSE:
Dear Dr. XXXX:

Thank you for the interesting e-mail. As I understand your e-mail, you wish to transport biopsies collected on site at my hospital to an off site location for processing and interpretation by a GI trained (but there is no board in GI pathology) pediatric pathologist (who rarely work outside of a large Children's type hospital or very large pathology group. This is a very peculiar arrangement.

I read from your email that you mention expanding to other locations, but then go on to say you will stay at our hospital, this is confusing.

I have an exclusive contract and will bill for the professional component for all anatomic pathology specimens and biopsies performed at our hospital. This is my livelihood, which I am sure you are aware. This is standard for all the hospital laboratories along the coast and in the nation as well as our radiology and anesthesia physician groups as well. I hope you can appreciate the gravity of the situation if every surgeon decided to send pathology to whoever they want because I made an exception, it would be a lord of the flies type of result and marked confusion. Thus the overall necessity of exclusive contracts.

Further, being the medical director of a high complexity laboratory I will not take the malpractice risk for myself nor this facility to have an off site, non privileged / credentialed pathologist to read the pathology work done that originates in my home hospital and is guaranteed by contract.

No other pathologists other than myself and Dr. YYYY have medical staff privileges at our hospital.

If there is any other options or discussion you would like to discuss that allows our facility to function as it should please feel free to communicate back.

TORSED

Here my very ruff letter with some points. No spell check etc.

Dear Dr. XXXX:

Thank you for the interesting e-mail. I understand that you are concerned that our group may not have sufficent expertise in pediatric GI pathology.
However, I can assure you that the vast majority of pediatric GI pathology is well within our capability. We would be happy to consult with an outside subspecialty GI pathologist on difficult cases as we do with other types of specimens. There is no need to involve a separate GI pathology laboratory.

CMS and Joint commission allow for exclusive hospital services contracts to ensure hospitals can control quailty and ensure these services have adequate staffing. I have an exclusive contract and bill for the professional component for all anatomic pathology specimens and biopsies performed at our hospital. This is my livelihood, which I am sure you are aware. This is standard for all the hospital laboratories along the coast and in the nation as well as our radiology and anesthesia physician groups as well. I hope you can appreciate the gravity of the situation if every surgeon decided to send pathology to whoever they want because I made an exception, it would be a lord of the flies type of result and marked confusion. It would be impossible to service the hospital should this be allowed.

Assuming these are the hospital patients, the pathologists at outside laboratory will require hospital medical staff previlges.
No other pathologists other than myself and Dr. YYYY have medical staff privileges at our hospital.
The pathology departmart could not practically oversee the added pathologists quality for staff privileges as required by CMS.

Further, being the medical director of a high complexity laboratory I will not take the malpractice risk for myself nor this facility to have an off site, non privileged / credentialed pathologist to read the pathology work done that originates in my home hospital and is guaranteed by contract.

The administration should be concerned if sending out specimens appears to be a requirement for a new physician to work at our hospital. There is high potential for volations of the Stark and anti kickback statues on specimens sent to a third party labs. The hospital would have significant libility if this occurs. Finially, CMS TC pathology payments are bundled with the hospital payment. The hospital will have to pay the outside laboratory the TC component on the slides produced. This will require extra accounting and cost to be compliant.

If there is any other options or discussion you would like to discuss that allows our facility to function as it should please feel free to communicate back.

TORSED
 
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Regarding TC, what about Government cases/DRG? While the in-office pathology group can bill for the PC, they would have to client bill back the TC to the hospital, right? That would mean lost revenue for the hospital, putting their cost center further in the red. On the hospital side, you'll have to justify the number of histotech FTE with reduced volume.

This GI group just wants to pocket a lion share of the PC and also collect a good chunk of TC. It's another revenue stream for them and they will use the guise of "better patient care" in order to get that business out. Your response is appropriate in citing that there is no boarded GI fellowship and most of this work is bread and butter. On one hand, I do see a lot of quality issues with general pathologists looking at GI biopsies and missing microscopic colitis, IBD, etc. However, a lot of this stuff is really straightforward and there is no reason to outsource this kind of work. Liver biopsies are another consideration and I personally think that some of this stuff can get hairy and complicated.
 
Hospital. I don’t think the CEO understands and I explained it.

Some Hospitals may be more than willing to appease the GI docs and lose out on TC revenue just to keep the endoscopy procedures in house. If the GI group is strong, they may decide to pull all of their elective cases and go to another hospital. They may also decide to not take call if the business arrangements do not suit them. This can be a tortuous political stream to swim in. All of this depends on how much leverage the GI group has versus a solo pathology group. Sometimes you win and sometimes you lose your contract.
 
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I don't think I would reference lord of the flies. Other than that it sounds pretty good.
 
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Yep. I plan to crap in box and avoid the money greedy gastros completely with Cologuard testing when it comes time. Even if Cologuard is positive, I will have a general surgeon do my colonoscopy.

You have many options. Start small and escalate if you have to. The Pathology Blawg loved to post these vignettes and there were many of them.

You can:
  1. If the GI is raising quality concerns, require specifics (there won't be any)
  2. Hospital must bill for the TC of biopsies if this is a hospital endoscopy
  3. Agree with Mikesheree. If the GI doc somehow succeeds in inducing your hospital administration to allow a carve-out for peds GI biopsies to be sent out of the hospital in violation of your hospital contract without cause -- this is indeed tortious interference
  4. In addition, the GI doc is prohibited from referring medicaid biopsies to the same lab that offers client billing of commerically-insured patients. This is a violation of the false claims act (See Strata Dx versus US attorney for the commonwealth of Massachusetts 2015). The peds GI docs would have to send medicaid kiddo GI biopsies to one lab and commercially-insured kiddo GI biopsies to another lab to be compliant.
 
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Some Hospitals may be more than willing to appease the GI docs and lose out on TC revenue just to keep the endoscopy procedures in house. If the GI group is strong, they may decide to pull all of their elective cases and go to another hospital. They may also decide to not take call if the business arrangements do not suit them. This can be a tortuous political stream to swim in. All of this depends on how much leverage the GI group has versus a solo pathology group. Sometimes you win and sometimes you lose your contract.

That is a clear a kickback if they don't pay the TC to the lab.
The hospital would be pocketing the money based on the referral this GI makes.
If you loose you contract over this one.... lawyer up.
Not a valid reason to change path groups.
 
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Some Hospitals may be more than willing to appease the GI docs and lose out on TC revenue just to keep the endoscopy procedures in house. If the GI group is strong, they may decide to pull all of their elective cases and go to another hospital. They may also decide to not take call if the business arrangements do not suit them. This can be a tortuous political stream to swim in. All of this depends on how much leverage the GI group has versus a solo pathology group. Sometimes you win and sometimes you lose your contract.

It sounds like this group is problematic and if the surgery center they were previously at couldn't accommodate them, what makes anyone believe they would be happy with the hospital instead? This is simply a manipulative group of docs trying to game the system for their benefit at everyone else's expense. I would not in any way hire their pathologist, or any pathologist for them, because they've already shown they'll bolt as soon as a better deal in their eyes opens up. Except, I'll be left with a pathologist I had no intention of hiring still on my payroll and the loss of work to go with it. Too much hassle in my opinion to hire and then fire someone, even if you put a 30 day termination clause for any reason into a contract. If I were forced to do it, I would do it as a business arrangement where their pathologist can read out the work but must contractually bill through my practice, have their own separate malpractice, and be paid 1099 style after I take 50% of the proceeds for my expenses, etc.

I probably missed it in the discussion, but is this fabled GI peds pathologist someone already on their payroll, from another competing group, or just something they're inventing with no clear person in mind as a pretext to get some random pathologist to bill under their tax ID for their financial benefit?
 
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You must at independent owned hospital
The bigger hospital systems stay far away from these guys

we've had a big need for GI at our Hospital too

Our Hospitals have walked away from any offers that could get them in trouble with the feds
 
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That is a clear a kickback if they don't pay the TC to the lab.
The hospital would be pocketing the money based on the referral this GI makes.
If you loose you contract over this one.... lawyer up.
Not a valid reason to change path groups.

100% Agree!
 
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I wouldn't even consider hiring their GI pathologist. Why increase the overhead when it's not needed. Just stick to your guns and tell them to eff off.
 
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I wouldn't even consider hiring their GI pathologist. Why increase the overhead when it's not needed. Just stick to your guns and tell them to eff off.

I agree entirely. Too much conversation will lead to problems. Like Vito Corleone said to Salozzo "My no is final and I wish you success on your new venture, as long as your interests don't conflict with mine".
Trying to out smart or out maneuver these people is unnecessary and makes you look not confident.
 
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My take here (having gone through something similar)- this may warrant a phone call with other parties to make sure you really understand what they want. If the demand is that there is a GI-trained pathologist they want to hire because they feel it is important for patient care (what is implied from their email, regardless of whatever underlying malintent), you can use the information to better position your response.

You don't want to burn bridges or be put in a position where your contract is terminated and even if you win you have to deal with guys who try to undermine you to the hospital and administration.

There is a possible win/win in the scenario above. You can communicate that you understand their need and can try to accommodate, You can negotiate that they can find the GI-trained pathologist, but YOU will hire them and they work for YOU. All expenses incurred in the process will be paid by them (including liability) as this is part of your exclusive contract with the hospital. This prevents your fears (that they will push you out with their own path) while at the same time cutting out the patient care argument from them.

/Profit!

I like your optimism but my efforts to reach out to the GI doc both phone calls, text, and e-mail have been ignored. That is why I'm not even bothering with the idealistic scenario you propose. I've called the other hospital path groups in the area to discuss and they all agreed to jettison all this malarky as their systems would not allow it.

I think the most compelling for Admin is not only loss of TC income (which they collect) but also inability to comply with JHACO etc. with sending to offsite pathologist not credentialed.

This GI doc does not do hard liver biopsies in the young, only luminal biopsies. Usually 20 kids a day. A pure GI mill factory.
 
I like your optimism but my efforts to reach out to the GI doc both phone calls, text, and e-mail have been ignored. That is why I'm not even bothering with the idealistic scenario you propose. I've called the other hospital path groups in the area to discuss and they all agreed to jettison all this malarky as their systems would not allow it.

I think the most compelling for Admin is not only loss of TC income (which they collect) but also inability to comply with JHACO etc. with sending to offsite pathologist not credentialed.

This GI doc does not do hard liver biopsies in the young, only luminal biopsies. Usually 20 kids a day. A pure GI mill factory.

Eff them.
 
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I like your optimism but my efforts to reach out to the GI doc both phone calls, text, and e-mail have been ignored. That is why I'm not even bothering with the idealistic scenario you propose. I've called the other hospital path groups in the area to discuss and they all agreed to jettison all this malarky as their systems would not allow it.

I think the most compelling for Admin is not only loss of TC income (which they collect) but also inability to comply with JHACO etc. with sending to offsite pathologist not credentialed.

This GI doc does not do hard liver biopsies in the young, only luminal biopsies. Usually 20 kids a day. A pure GI mill factory.

The only way to handle this is to be firm.
The hospital is endangering it's own economic position if violates a variety of federal laws to obtain the work from a single physician.
You don't need to threaten them. They do have to realize they are swimming in shark infested waters.
If you are fairly certain the are moving in the wrong direction on this then,
you might consider a well timed letter from an expert healthcare lawyer that politely points out the pitfalls.
 
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Torsed

What percentage of your total workflow is constituted by these sort of biopsies?

sounds like they are trying to set up a classic “Pod” lab which is generally frowned upon these days.
 
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Torsed

What percentage of your total workflow is constituted by these sort of biopsies?

sounds like they are trying to set up a classic “Pod” lab which is generally frowned upon these days.

lol theyve been frowned upon for many years, unless you are the clinician of course. Who doesn’t want free money?
 
Torsed

What percentage of your total workflow is constituted by these sort of biopsies?

sounds like they are trying to set up a classic “Pod” lab which is generally frowned upon these days.

Probably 5 to 10 percent tops. :-/ I don't need it for my sanity. My purpose here is to help others by your and others' comments to combat this in the future. I appreciate all of you. Cheers!
 
Tell the greedy pediatric gastroenterologist POS to go to hell or you will report him for Stark law violations.
 
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The only way to handle this is to be firm.
The hospital is endangering it's own economic position if violates a variety of federal laws to obtain the work from a single physician.
You don't need to threaten them. They do have to realize they are swimming in shark infested waters.
If you are fairly certain the are moving in the wrong direction on this then,
you might consider a well timed letter from an expert healthcare lawyer that politely points out the pitfalls.

I've done the letter scenario in the past from McDonnell Hopkins for the tune of 800 an hour per Mr. Cooper. FYI for others in this predicament.
 
Some Hospitals may be more than willing to appease the GI docs and lose out on TC revenue just to keep the endoscopy procedures in house. If the GI group is strong, they may decide to pull all of their elective cases and go to another hospital. They may also decide to not take call if the business arrangements do not suit them. This can be a tortuous political stream to swim in. All of this depends on how much leverage the GI group has versus a solo pathology group. Sometimes you win and sometimes you lose your contract.

I am almost beyond it. The GI doc can do the BS frozens at 10 pm then and run the blood bank. Its all an example for younger pathologists to see and follow. Haven't heard a peep from the GI doc since the email. All the other paths in the area said they would tell them to jump in the lake too. :)
 
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