This year at the DPA Pathology Visions- Digital Pathology Bringing the Future Into Focus conference I will be presenting a poster on effective TCPC programs and how they can increase revenue for labs. This discussion will be based off a XIFIN study that demonstrated the current TCPC revenue opportunities a lab should evaluate.
Our analysis team performed an assessment on the impact of proposed changes to Medicare fee schedules to advise labs on impacts and opportunities in the lab industry, for this presentation we will be focusing on TCPC impacts. We also looked at the success of a single client operating a robust TCPC program for the past six years.
Our analysis indicates that by sheer volume, laboratories billing the global or the technical component of the 88305 will be the largest contributor to any upside in revenue in 2019. The CMS 2019 proposal includes a significant revenue opportunity on the TC component of most major pathology codes. (Figure 1, Table 1) Overall, there are a significant number of CPT codes that will contribute to a lab's upside revenue in 2019 (Table 2).
Although there has been a steady decline in TC reimbursement rates since 2012(Table 3), this recent boost represents a significant revenue opportunity for labs that can successfully implement such TCPC programs.
Over the course of six years, the success of Pathline-Emerge’s TCPC program has reflected the volatility of CMS pricing fluctuations. Also evident is the competitive and transient nature of TCPC business (Figure 2). The decline in TCPC revenue in 2016 and 2017 are partially attributed to the loss of several Physician Office Labs. Revenue gains in 2018 are due to the opening of new POL’s. 2019 revenue is projected to increase with the CMS increase in pathology codes. Managing POL’s come at a significant cost and individual clients can represent a large percentage of overall revenue. To reduce this volatility, it is critical to establish a formal TCPC strategic plan that includes sales, marketing, customer service, information technology and lab operations that is reviewed annually to assess market changes. The lab must utilize analytics to determine profitability opportunities and facilitate sales initiatives. Even small percentage changes must be evaluated due to the large volumes of key pathology codes (e.g. 88305).
Labs partnered with the right technology partners can build a successful TCPC program that seamlessly facilitates the flow of technical data to their professional partners. It is critical to have an engaged sales and customer service team that can manage these TCPC relationships. Regularly assessing market data can assist in building and adapting a TCPC revenue strategy that can significantly add to the profitability of the Lab’s business.