Government Healthcare Policy, Business and Technology

'Desperate' rural hospitals team with lab companies

Modern Healthcare: Lab billing company arrangements with hospitals, in which the lab tries to boost its reimbursement by using a hospital's insurance contracts, can take on several forms, according to Brian Bauer, an attorney with Hall Render in Detroit who has studied lab billing arrangements and advised hospitals considering them. He estimates he's seen 25 to 30 cases.

At one extreme, a company buys the struggling rural hospital and uses its favorable reimbursement contracts with commercial insurers to get better reimbursement for labs, even labs from patients who didn't visit that hospital. Other arrangements may involve companies partnering with hospitals to increase their lab revenue.

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