POL Business… Are You Leaving It On The Table?

Edition: May 2002 - Vol 10 Number 05
Article#: 1238
Author: Dr. Sheila Dunn

Office-based testing is as natural a part of primary care practice as the blood pressure cuff. And for many distributor salespeople, a significant chunk of their numbers comes from selling testing equipment and supplies. Why are lab sales so lucrative? Because once a test kit or piece of equipment is sold, the reagent stream keeps flowing and growing.


Yet, many distributor reps shy away from selling lab products, or avoid pursuing new lab business altogether. Some typical sentiments…”It's a tough sell”…”I used to sell lab a lot, but gave up when CLIA went into effect”…”The doctors say there's just no money in lab anymore.”


Could it be that distributors are intimidated by the scientific-techno jargon such as HDL, CBC, microalbumin and PSA (See box)? Or is it that they can't overcome the customer's most basic objections?


I think it's the latter. The remainder of this article, therefore, is designed to provide tools that can help you successfully meet these objections.


Obstacles and Opportunities
Two big factors have dealt a blow to the in-office testing market: CLIA'88 and declines in reimbursement.


By far, the biggest objection to lab testing is CLIA. Why? Some physicians perceived CLIA to be too costly and difficult to handle for people who are trained on-the-job (not to mention physicians' perceptions of federal CLIA agents bedecked in trenchcoats and packing Uzi's). Despite their initial fears, CLIA inspections have been educational instead of punitive, for the most part. In fact, only a handful of POLs nationwide have been sanctioned with closure or denial of Medicare payments because of shoddy quality practices. Moreover, CLIA fees are minimal, accounting for only a few pennies per test.


Despite physician trepidation about CLIA, the number of POL testing sites has steadily increased over time, although the growth is in the CLIA-waived sector. In fact, the latest statistics show that almost 100,000 POLs (Table 1) are registered in the CLIA program. This is a growth of more than 10,000 sites in the last five years. And these numbers don't include surgery centers, school clinics, HMO's and other assorted types of clinics. That's a lot of testers!


In addition, the number of CLIA-waived tests keeps growing.





SOME COMMON CLIA '88 – WAIVED TESTS         


















































































































































































































































































































































CPT CodeMedicare 2002 Fee Cap Test Name
81002$3.54Dipstick/Tablet Urinalysis
81002 & 82570QW$3.54 $7.15Dipstick Urinalysis plus Creatinine
81003QW$3.10Some Urine Strip Analyzers
82044QW$6.33Dipstick test for Albumin
81025$8.74Urine Pregnancy Test Kits, Qualitative
84703QW$10.38Urine Pregnancy Tests on Urinalysis Instrument
83518QW$11.72BTA Stat Test for Bladder Cancer Antigen
81007QW$3.55Uriscreen for Urinary Tract Infections
82055QW$14.93Saliva Alcohol Test
80101QW$19.03Nicotine Test Strips
82120QW$5.19Fem Exam Amines Test Card
85651$4.91Sedimentation Rate, Non-Automated
82270 or G0107$3.50Fecal Occult Blood, Diagnostic Fecal Occult Blood, Screening
82273QW$4.49Gastric Occult Blood Test
82985QW$20.83Fructosamine
82962$4.37Glucose Meters
83036QW$13.42Hemoglobin A1c
85014QW$3.27Hematocrit, Spun
85018QW$3.23A few Hemoglobin meters
82465QW$4.57Some Cholesterol Tests
80061QW 82947QW 84460QW$18.51 $5.42 $7.32Lipid Panel (Cholesterol, HDL, Triglycerides) Glucose ALT (SGPT)
87880QW$16.58Most Rapid Strep Test Kits
86318QW$17.89Several H. Pylori Rapid Test Kits
85610QW$5.43Prothrombin Time Instruments
86308QW$7.15Several Mononucleosis Test Kits
87804QW$16.58Some Rapid Tests for Influenza
86618QW$20.06One Rapid Test for Lyme Disease


This list omits waived tests that are typically not performed in physician office settings. For a complete listing of every waived test by brand name, go to http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfCLIA/search.cfm         





New Federal Oversight for Waived Labs
The Centers for Medicare & Medicaid Services, worried that waived testers don't necessarily have it all together when it comes to quality, will soon conduct on-site visits of these labs.


Ordinarily, waived labs aren't inspected, but CMS plans to give them extra scrutiny since recent studies uncovered a host of quality problems at some of the waived labs. In pilot surveys of waived labs in five states, CLIA inspectors were astonished to find that a huge chunk of waived physician offices didn't even have instructions for performing the tests…had reagents that were outdated (some were also moldy)…were storing kits at room temperature when they should have been refrigerated or vice versa…and a myriad of other infractions. This news was promptly presented to Congress, HCFA/CMS, CDC, the FDA and several national newspapers.


Because of this, CMS will visit two percent of all waived labs starting this year. Like inspections of higher complexity labs, CMS doesn't plan to throw the book at problematic waived labs. According to an internal letter (http://www.hcfa.gov/medicaid/letters/smd40102.pdf), CMS is adopting an “educational” approach to these inspections. If inspectors uncover quality problems, they'll “provide assistance to the laboratories to achieve accurate and reliable results.” If they find certification problems, they'll ensure that the labs operate under the correct certificate. Labs will be notified in advance of visits, and no fee will be charged.


Upgrading Customers to a Higher Complexity
The biggest objection that most physicians have about taking the plunge to moderate complexity testing is fear of government agents in their practice. The best way to overcome this is to reassure them that these inspections are educational in nature. Tell them about other customers of yours who can attest to this.


So, enough about CLIA already. To overcome customers' objections about regulatory requirements, explain that CLIA fees are negligible, CLIA quality requirements are minimal (virtually every manufacturer does a good job providing CLIA compliance materials), and inspections are a piece of cake for the majority of PO's.


The Real Reason for Testing
Also, keep in mind that most internal medicine physicians and virtually every hematology oncology physician must perform CBCs. Why? Because they can't practice medicine without this vital test! Once they're doing CBCs (classified as “moderately complex” under CLIA), the door is open for more diagnostic tools.


Which brings me to the most important point about selling lab testing to physician offices. Doctors will enthusiastically adopt new technology that helps them diagnose or monitor a disease state, or screen a high-risk population (i.e., tests that are clinically necessary). They'll also jump on the bandwagon for a test that may give them a competitive edge, even if it doesn't generate a lot of revenue. The key is for you to present these tests in such a fashion.


For instance, instead of saying, “Doctor, I'd like to show you a new test for Hemoglobin A1c” (ho-hum), consider saying something like this to the physician or the practice administrator:


“We just began carrying a new diagnostic tool that's made just for physician offices which stabilizes diabetic patients according to the new ADA recommendations, so they develop less complications. It's generating real excitement in the medical community, so I wanted to be the first to let you know it's available. Do you manage many diabetics? What tools do you use now?”


Here's another scenario:
“Have you heard of a new diagnostic tool for patients on Coumadin that can stabilize these patients in a few minutes during an office visit – for example, drastically reducing patient complications such as bleeding episodes? In fact, some internal medicine and cardiology practices are considering, or have set up, Coumadin clinics where they see large numbers of Coumadin patients. The patients really appreciate the convenience of rapid results and dosage adjustment while in the office.”


Work with manufacturer's reps to create the same type of lead-generating questions that will generate excitement about other “hot” tests like CBCs, PSAs, and the like. Once you've gotten the customer's interest sparked about the clinical reasons for testing, CLIA and reimbursement are secondary and easy-to-overcome objections.


The Last Big Concern: Reimbursement
Face it, nobody in his or her right mind is going to perform a test that doesn't reimburse at least double what it costs to perform, right?


Whether you're introducing the simplest waived test or a highly-complex immunoassay instrument, try to create excitement about how the test will make the doctor's life easier. Perhaps the benefit is in providing a better way to diagnose and treat patients. Or maybe the test will help in marketing the practice or in competing with the practice down the street.


The next time a doctor brings up how “reimbursement is going to hell in a handbasket,” ask him if he's heard of DRG. He'll say, “Of course, Diagnosis Related Groups is the payment system that has strangled hospitals since the early nineties.” Tell him it now stands for “Da Revenue's Gone” and once he's stopped laughing, you can explain that Medicare still reimburses fairly well for most tests.


Take for instance a CBC. Most CBC's can be run in a physician office setting for about $2. Add a quarter per test for CLIA costs, and there's still a hefty profit to be made with a Medicare reimbursement of $11.70. A $3 rapid strep test reimburses about $16. POL's enjoy a margin unheard-of in most businesses, especially ours! When was the last time you sold a $3 product for $16?


In the mid 1990s, Medicare discouraged physicians from ordering large panels of tests by paying less for big panels than for small groups of tests, or by denying payment altogether. Now, physician offices must show that a particular test (or group of tests) is medically necessary by pairing appropriate diagnosis codes (ICD-9s) with lab CPT codes. This hassle factor exists whether tests are performed in-office or at a referral lab.



Medicare will accept for the most common lab tests
.
Despite the hassle of having to prove medical necessity, Medicare payments for lab tests are still obscenely lucrative. Further, lab testing has real intangible benefits that, in the long run, contribute to a lower overall cost of doing business (and that's the name of the game for savvy business managers). So, if you want to not only grow your POL business but also help your accounts, an office-based lab will do just that.





A Final Note on Lab Nerds
Before you rip out your plastic pocket protector in defense of every lab person you know, take it from someone who knows these folks – me! I'm one and proud of it! Lab people are introverted, to say the least. Their personalities are diametrically unlike almost every salesperson. In order to interact with them most effectively, I've excerpted some gems from a recent survey of customers who are responsible for purchasing lab products in both inpatient and outpatient settings. Note that the reps that customers bought from overwhelmingly demonstrated that they care about the customer's needs.


I was in a doctor's office one day when I overheard a distributor rep presenting a product to a medical assistant who did the lab work. The rep kept referring to the many benefits that this product had for the “PLO.” It was easy to see that the medical assistant was wondering what she was missing (What do CBC's have to do with the PLO? Do these people have to be screened more often?). But she shyly and politely let it pass. I just didn't have the heart to steal the distributor rep's thunder! As it turns out, the rep actually made this sale (fortunately, he never mentioned the PLO to the doctor).


Incidentally, neither the doctor nor the medical assistant had ever heard of a POL!


Some Common POL Tests For
Which Medical Necessity Is Defined

•PSA
•HCG
•Hgb A1c
•Thyroids
•Glucose
•Urine Cultures
•Digoxin
•Lipids
•GGT
•Hepatitis Tests
•Fecal Occult Blood
•CBCs, Protimes, PTT
•HIV
•Iron





Here's what a sampling of lab managers had to say about salespeople:
Great Reps…
-Are willing to work through tough issues and assist me with problems.
-Are well-versed, and look you in the eye when speaking to you.
-Are excellent listeners who quickly follow-up. If a sales rep doesn't listen to you, he or she won't be able to provide you with what you need.
-Not only know their products, but also other products on the market, and discuss them knowledgeably and without insulting another company.
-Fit the product they are presenting into the overall goals of the practice, such as (1) Providing better patient care in some way (preferably tangible and quantifiable), (2) Enhancing laboratory/practice efficiency, (3) Improving the bottom line, (4) Increasing physician satisfaction and, (5) Cheaper than the competition (we all hope).
-Go above and beyond the call of duty by “after the sale” support. Lab techs as a rule do not change easily and require a lot of support in making major changes. This type of service goes a long way. It turned out that our staff spread the word among their peers and started several other sales for the rep!




Not So Great Reps…
-Appear to care more about their commission than my needs.
-Will not be clear about the facts. They will say “yes” to everything.
-Spend more time talking than listening.
-Don't return calls, are unavailable when the going gets rough, have information that is dated. The requests for information either go unheeded and unfilled, or wrong or incomplete material is used.
-Don't attempt to understand your particular situation and needs, but instead use a “one-size-fits-all” approach.
-Try the hard sell approach and slam dunk you into buying something you don't need. In general, they show no class or character in their quest for the commission.
-Insult a competitor. Nothing makes me madder— it is just incredibly bad manners.
-Want to negotiate a deal. I don't have time to waste negotiating. Simply meet with me to find out my needs and bring back your best proposal.”




–Reference: Vantage Point, April 8, 2002, Vol. 6, No. 7, pp. 1-3.




ABOUT THE AUTHOR:
Dr. Sheila Dunn
leads Quality America, Inc., an Asheville, NC-based consulting firm that publishes an OSHA Safety Manual, video and newsletter. Quality America's newest products are a ''Sharps Injury Reduction Program'' video and the HELP Book, an Emergency Action Guide. Quality America products are sold through distribution. For more information, call 800-946-9956, or visit Quality America's OnLine Resource Center @ www.quality-america.com