HOW TO WRITE A REQUEST FOR PROPOSAL FOCUSING ON A VALUE-BASED MODEL

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1 HOW TO WRITE A REQUEST FOR PROPOSAL FOCUSING ON A VALUE-BASED MODEL

2 A well-designed proposal can be the difference between an accurate and clear view of a reference laboratory partner and a lengthy document that provides a cloudy, inconclusive perspective. WHAT YOU SAY AND HOW YOU SAY IT MAKE A DIFFERENCE More importantly, a well-designed request for proposal (RFP) is the only way to ensure you are evaluating value, not the lowest price. Rather than focusing exclusively on price, it is critical your laboratory and organization assess which reference laboratory can help you transition between the fee-for-service model to value-based medicine. With that said, we know that writing a good proposal can seem daunting. Based on conversations with community-based laboratories around the country, we have developed this document, which details some basic tips and common questions to consider when writing your next proposal. 2

3 MAKING A TEST LIST AND CHECKING IT TWICE As you consider issuing a request for proposal, prepare yourself for a number of roadblocks and detours that you will likely face. As a first step, you will need to submit your laboratory s test utilization on which reference laboratories will bid test by test. Complete, accurate data and lists are essential for an honest assessment of a reference laboratory partner. Some key aspects you should study closely and questions you should ask are listed on the following pages. 3

4 DO Compile a complete test list from every laboratory to which you refer certain tests. Many times the RFP process will only address a primary laboratory (or laboratories) due to more routine testing and higher volumes. Make sure your list includes all tests sent to niche or boutique laboratories as these tests represent the highest priced tests in your laboratory s budget. Leverage multiple sources of information to formulate a complete list of all tests that you refer out to other laboratories. There is no single source of information that can offer a complete view of your laboratory test list. Sources should include your laboratory information system, manual ordering processes, and send-outs to each reference laboratory, big or small. Also, make sure that all send-outs, including the low volumes, are accounted for in your final list. Validate the utilization report from all your incumbent laboratories. Using utilization reports may not capture tests that have been brought inhouse. Remove custom profiles and obsolete tests or tests that will remain local (e.g., state newborn screening, blood bank testing). Make sure that any testing that is currently third-party billed is removed, as it will distort the response. Also, make sure that the entire test panel is captured not just initial screens. Provide the data in a format that replicates your ordering practices. Many times laboratory RFPs list all the tests, components, reflexes, etc. in numerical or alphabetical order. This can hinder your evaluation efforts, as it makes it more difficult to accurately analyze the data. Provide the reference laboratory orderable test codes, Current Procedural Terminology (CPT) codes, testing location, and methodologies for each of your tests. Request that participating laboratories provide this same information when they return their proposals. This will aid you in identifying how your tests have been matched and allow you to review and decide if the proposed test from the reference laboratory is acceptable for your physicians. Ask who will be do the matching at the participating laboratory to make sure a trained medical professional is providing the most clinically appropriate match. Be aware that many participating laboratories rely on non-clinical reviewers or black box databases. As a result, these approaches tend to focus on providing the lowest per-test price as opposed to the most clinically appropriate match. Make sure that you, with your medical staff, evaluate all test matches to assure that participating laboratories meet your patient-care needs. 4

5 DON T Do not use standard supply chain, procurement, or third-party consultant RFP templates. These templates have been designed for commodity-focused services and products, and they do not lend themselves to clinical services. These templates also do not provide the ability to evaluate value or clinical outcomes, which will be required in our changing health care environment. Do not rely on a 12-month utilization report exclusively, as these reports are poor at predicting future utilization. According to an analysis of our historical bid data, 50% of an average laboratory s reference laboratory test mix and volumes can change throughout 12 months. A more accurate predictor of future reference laboratory testing is to compare your 12-month utilization report to an annualize list using the last three months of referrals prior to the proposal. However, make sure to account for any seasonal testing trends. Do not base utilization purely on CPT codes. These billing codes do not provide enough information to accurately distinguish among tests. Do not limit your test list to your highest volume testing or depend on hot lists that only show the top tests ordered. These are highvolume tests that will likely be insourced into your laboratory. Some of your most expensive tests (e.g., genetics and pathology consultations) will be at the lower volume spectrum of your utilization. Do not use only utilization reports from reference laboratories. These reports are typically billing reports and will not reflect ordering practices or account for third-party billing. As a result, these reports will not provide the data needed in a value-based environment. Research has shown that the bottom 20% of volume can represent up to 50% of a laboratory s total send-out costs. Do not provide test names only. Test names without orderable codes, CPT codes, or methods will allow the participating laboratories to interpret your request. If you are not specific with this information, some reference laboratories will match the test with the lowest-cost equivalent, which may be performed using a different platform, methodology, and performing site. 5

6 COMPANY INFORMATION 1 What is your business model? 2 Are you part of an integrated medical system or affiliated with another organization? Make sure you get to know the reference laboratories you are considering. By asking for detailed information, you can obtain valuable insight about reference laboratory partners and objectively assess how they may align with your model of care and institutional goals. Some key points to consider might be: History, stability, mission, and goals. Distinguishing characteristics that make the laboratory unique. Capacity to fulfill your current and future laboratory-testing needs (e.g., research and development of clinically relevant and validated tests) Who are your primary clients (e.g., physician offices, nursing homes, hospitals)? What are your business goals in these markets? Please describe how your company distinguishes itself from competitors. Do you enable physicians to bypass the hospital laboratory and order directly from your company? 6

7 QUALITY Quality cannot be assumed and must be proven. As a trusted provider of patient care, a reference laboratory must show that quality is its overriding feature. A reference laboratory should: Achieve applicable licensure and accreditation standards. Meet or exceed your expectations in areas such as turnaround time, privacy standards, and accuracy of results. Track and monitor quality and performance metrics Describe in detail your quality-management program, in particular, monitoring and documenting accuracy and reliability of results as well as continuous qualityimprovement processes. List all the client-service metrics tracked and utilized by your company to monitor quality and performance. Include examples of reports. Describe your licensure and accreditations. Provide a copy of policies on protecting confidential patient information (e.g., HIPAA). What is your procedure for assuring clinical utility of current tests as well as any new tests introduced in the future? 7

8 CUSTOMER SERVICE, CONSULTATION, AND SUPPORT A reference laboratory relationship must be more than test results. For a strong laboratory partnership to take shape, there should be ample opportunities for consultation and information sharing. Important characteristics of a supportive reference laboratory include: Operating a responsive call center 24/7. Providing a dedicated contact and technical support, including dedicated regional manager and service support. Delivering consultative support from M.D.s and Ph.D.s around the clock What dedicated reference laboratory support will be assigned to our facility? (Areas of support should include resolution of problems, dedicated on-site technical and operational support, and regular updates about test methodology and results interpretation.) What is your escalation process for complicated inquiries? Describe your customer service process, including services provided and service hours. How are inquiries handled (automated system or a live person answering the phone)? What percent of the time is your customer service staff able to service without transferring? Do you have physicians available on staff to consult directly with the referring-site physicians? Describe the available consultative services and the procedure for accessing those services. 5 What level of access to topic experts will be available to address any questions regarding laboratory results, methodologies, appropriateness, or interpretation? 8

9 CONNECTIVITY Efficient and accurate test ordering and results reporting are essential to timely patient care. A reference laboratory s ongoing investment in and support of robust information technology solutions is critical. A reference laboratory should: 1 2 Do you have a secure web-based mechanism for ordering tests, reporting results, and managing information? Fully describe your network protocol and connectivity requirements. Describe your connectivity solution between local physician offices and the hospital laboratory. Assist in selecting the best connectivity solution to ensure a smooth transition and best long-term fit. Dedicate resources and support to ensure successful information system implementation. Maintain a secure, HIPAA-compliant method of data encryption for security of information. Provide a straightforward method for ordering tests and receiving results that is also easy to navigate and use Describe the implementation process of a new interface and include a sample timeline. Describe the financial assistance you will provide to build the required laboratory information system (LIS) interfaces. Does your company provide training regarding your services? Identify the available assistance during the transition to your reference laboratory. Please provide an explanation of backup reporting procedures in the event of equipment failure. 6 Provide a detailed overview of your conversion support process along with proposed timelines. 9

10 TRANSPORTATION 1 Detail the specimen pickup and transport services, including costs. Every specimen represents a patient. Ensuring that every specimen arrives safely and quickly to a reference laboratory should be the highest priority. A reference laboratory should: Ship specimens in accordance with federal, state, and international regulations. Work collaboratively with both international and local ground couriers and air carriers to ensure your shipping preferences are met in the most expedient, efficient, and safe manner possible. Provide the necessary technology, supplies, collection materials, and shipping containers. Facilitate training about the latest shipping regulations and packaging procedures. Ensure each specimen is stored at the correct temperature during transport and tracked to the testing site Outline your special handling procedures and contingency plans. What systems have you put into place to ensure the safe shipment and arrival of specimens at the testing laboratory? What technology does your organization use to communicate, monitor driver performance, and track items in transit? Identify the collection and transportation supplies you provide to your clients. What metrics does your organization monitor to maintain service levels? What reporting tools can your organization provide to clients to demonstrate service levels? Please provide examples (or demos if via a web portal). 6 Is there an expedited or stat process? 10

11 UTILIZATION MANAGEMENT The hospital laboratory has an important role in a value-based environment impacting the total cost of care. Your reference laboratory partner should support the transition from fee-for-service to a valuebased environment. A reference laboratory should: Have a clearly defined strategy for its clients that ensures appropriate reference laboratory and pathology testing and high-quality, cost-effective patient care. Facilitate the development of test-utilization strategies to ensure: Correct tests are ordered for the correct patients. Best test methodologies are used. Accuracy and quality remain high, ensuring the best medical care for each patient How will you prepare our laboratory for the transition from fee-for-service to value-based? As our reference laboratory partner, how can you help to keep testing within our system and drive down sendout costs? What experience or insights can you share in your ability to decrease our test-per-discharge? What models or experience are you able to share with us in developing a laboratory test formulary? How has your clinical practice implemented algorithms to ensure the most appropriate test is preformed? How can you support our transfusion medicine and surgical departments to reduce the usage of blood products? 11

12 OUTREACH Many laboratories hope to increase their ability to serve their communities through laboratory outreach. For those laboratories looking to explore outreach, a reference laboratory should: Complement your outreach program and not compete with it. Exemplify closely aligned business objectives and a coordinated approach to test-menu development and coordination, as well as providing value-adds for the community such as outreach education, physician office connectivity, test-ordering consultation, and results interpretation support. Support outreach through dedicated personnel with a long-term history of successful consultation and program assistance Describe your ability and commitment to assist our laboratory in developing or expanding a laboratory outreach program. Include any associated fees for outreach support. Please provide references. Is your outreach support conducted with internal resources or contracted out? Please indicate any outsourced companies and their credentials. How many clients do you support in outreach? Please indicate your proposed timeline for completion of the project. Please describe any additional outreach support upon completion of the project. Will this be at our laboratory site or virtual? Are there any associated fees for additional support? Outline the assistance your organization will provide in marketing services to our clients, including any associated fees. 12

13 NETWORKS To effectively serve your communities and counteract restrictive health care contracts, many laboratories are forming regional networks. A reference laboratory should: Bring together non-affiliated, community-based hospital laboratories to secure access to managed-care contracts. Advise members in the development and implementation of an integrated laboratory testing menu within the community. This ensures a single voice to payers. Demonstrate the ability to support the development, implementation, and maintenance of laboratory networks across the country Outline your experience with regional and/or national hospital laboratory payer networks. Describe your network support team. List any costs associated with forming, implementing, and maintaining a laboratory payer network. Illustrate your networks successes with payer contracting for outreach laboratory testing. Provide references from at least three laboratory networks that you support. 13

14 EDUCATION Health care and laboratory medicine are constantly evolving and becoming more sophisticated. Continuing education for your physicians and other health care professionals is an important offering, and your reference laboratory should: Deliver a variety of continuing-education formats such as conferences, visiting faculty programs, and online formats. Offer qualifying programs that offer education credits based on accreditation. Some accreditations may include AMA PRA Category 1 Credit and the ASCLS P.A.C.E Describe any continuing-education programs and opportunities, publications, and other education materials (and associated costs) that your company offers. What is available on site, locally, regionally, and nationally? Are your staff and medical consultants available to present lectures at local, regional, and national meetings, grand rounds, and workshops? Can you provide access to teleconference/ webinar programs and to an online archived library of programs? Please describe. Is your organization accredited by the ACCME to provide continuing medical education for physicians and an ASCLS P.A.C.E. -approved provider for clinical laboratory professionals? 14

15 75 OTHER QUESTIONS Throughout this document, we have defined the important characteristics of a reference laboratory and highlighted the top questions we receive in each category. However, we realize you may wish to ask additional questions in each area. This section includes an expanded list of additional questions we are commonly asked. 15

16 COMPANY INFORMATION How many years has your company been in operation? How many laboratory testing centers do you utilize, and where are they located? Provide as an attachment (Word, Excel, etc.) your organization s sales structure. Are you privately or publicly held? If privately held, what is your corporate structure? What are your hours of service? Provide a history of the company, including past and pending mergers and acquisitions and a complete set of last fiscal year s financial statements. Provide a summary of information related to product categories in this RFP. List your technical specialties. Please provide your overall business strategy, including target industries and niches. Describe how your reference laboratory is positioned to complement our financial model. Have you acquired other laboratories, and is their revenue reflected in the group purchasing organization (GPO) administration fee? Is the testing ordered through your patient service centers reflected in the GPO administration fee? Has your laboratory engaged in any joint venture activity, or have you recently purchased hospital laboratories or outreach programs? QUALITY What metrics are you currently using to provide evidence of your laboratory s effectiveness? Describe in detail your continuous quality-improvement process. Describe in detail your internal audit process to ensure the client s satisfaction (weekly/monthly audits, walk-throughs, satisfaction surveys, etc.). Outline your proficiency-testing program. Please indicate the extent of your proficiency testing and to which agencies and organizations you subscribe. If reference ranges or methods change, can you provide assistance in comparing patients who are being followed with a specific test by running parallel testing of old and new methods? List any examples of recent, measurable improvement in your quality/performance metrics. Provide proof of regulatory licensure and all procedure manuals as prescribed by Clinical Laboratory Improvement Amendment (CLIA) 88 and/or other regulatory agencies with respect to referral testing. Procedure manuals should be in a format consistent with the College of American Pathologists/CLIA guidelines. What CLIA subspecialties do you offer? In which national or international standards committees do you participate? 16

17 CUSTOMER SERVICE, CONSULTATION, AND SUPPORT How many sales representatives does your company currently employ? Describe their training and experience in interacting with all levels of health care professionals. Attach a document with the number of sales representatives and the geographical area each one covers in the United States. Do you have technical field service representatives? How many? Describe the local/headquarters support team we would be assigned, including names, locations, and roles/responsibilities. Describe the assistance you provide on an ongoing basis. Are testing personnel and supervisors available for consultation? Describe your customer service process and hours of availability, including weekends, off-hours coverage, and emergency response. Provide statistics regarding service response time (e.g., call-wait and response times). Does a live person answer the phone, or is there a phone tree menu? How many people are in your call-answering department? Explain how your laboratory would handle a complex issue that requires research and follow-up. Describe your training and development policies for staff. Describe the consultative services that are available, the areas of specialty for M.D. and Ph.D. consultants, and the procedure for consultations. What days and hours are they available? Is there a fee for these services? Please list the total number of employees your company employs: (e.g., medical technologists/clinical lab science, medical laboratory technicians, clinical lab assistants, Ph.D.s, cytotechs, histotechs, M.D.s, pathologists, and scientists). CONNECTIVITY Fully describe your network protocol and connectivity requirements. What options do you offer your clients for ordering tests? Detail ability for us to securely access results and view reports from any web-enabled PC. Do you have an electronic catalog? Please describe in detail what assistance you offer for the testing of the interface at the client s site. Describe the online inquiry capabilities that are currently available. Does your interface support generic or miscellaneous orders? Do you have a designated project manager? What is his/her name, and how many hospital interfaces has he/she conducted? Identify role of dedicated IS team, including installation of interfaces, work with LIS vendor and our facility to help solve communication problems or other issues during the interface implementation phase, financial assistance to build the database required to implement an LIS-to-LIS interface, baseline and parallel testing, training, etc. With which LIS vendors have you interfaced? What type of connections do you support between your system and other LISs? Is there a cost? What is the average duration of an interface project? Can custom panels be made for the purpose of industrial wellness programs and outreach at the request of industries? What type of interface protocols do you support? How is a physician s office connectivity supported? 17

18 TRANSPORTATION Describe your expectations of our laboratory staff to process samples to make them ready for transportation to your performing laboratory. Describe the training and continuing education for couriers contracted by your company. Is there a fee for this training? Please describe measures you would take to ensure the performing laboratories would continue to receive specimens during a regional or national disaster or other unforeseen disruption in transportation or operations. UTILIZATION MANAGEMENT Can you provide an analysis of test-ordering patterns that will assist us in reducing costs by highlighting more appropriate and cost-effective patterns? Explain. Describe your process to reduce costs on a continual basis throughout the length of the contract and the process used to report and log these savings, including all ideas on standardization techniques. Describe your process to evaluate a customer s send-out test menus and ability to support and work with the customer on increasing in-house testing capabilities while decreasing the utilization of unnecessary tests through standardization. Describe any benchmarking or value-analysis support offered. 18 How will pathologists assist with test utilization and appropriateness? Are rates of positivity monitored? Are the ordering practices of individual physicians monitored? How are instances of inappropriate testing brought to the attention of your customers? How will you help drive efficiencies as it relates to consolidation and utilization? Provider should state its ability/offering to assist with optimization of sendout/in-house performance of testing. Can you provide an analysis of test-ordering patterns that will assist us in our disease-management process by highlighting more appropriate and costeffective test-ordering patterns? Explain. What models or experience are you able to share with us in developing a laboratory test formulary? How has your clinical practice implemented algorithms to ensure the most appropriate test is performed? How can you support our transfusion medicine departments and surgical departments to reduce the usage of blood products? What transfusion medicine processes have you implemented to help reduce costs and improve patient care in your clinical practice? What results have you yielded within your practice through your testutilization efforts? As our reference laboratory partner, how can you help to keep testing within our system and drive down send-out costs? How will you control utilization-management processes to ensure laboratory costs are in control and predictable? What programs do you have to help guide physicians to prevent ordering unnecessary tests?

19 OUTREACH Do you have a formal program to assist with outreach program development for our facility? If so, provide a complete description and supporting information. How many programs have you assisted with that are currently in place? Explain how you work with the hospital laboratory to bring in testing from send-out to in-house. Describe your organization s support for a client s outreach program. How does your laboratory partner with a client to assist in an outreach program s growth? Describe your educational, consultative, and marketassessment services that could help our hospitals reduce operational costs, grow revenues, and increase market share in our region. Please delineate activities that are free versus those that require a fee. Do you have designated outreach-support project managers on staff? EDUCATION How are continuing-education programs accessed? Provide a list of your continuing medical-education offerings for the past year. Include any costs. What continuing professional- and medical-education support activities and opportunities may be provided at our facility? Include associated fees for all. In addition to meeting our needs for esoteric testing, how can your reference laboratory complement our well-care efforts? Regarding your own practice inpatient diagnosis-related group and employee population, what experience or insights can you share in decreasing your test-per-discharge? Can our members/physicians bypass the hospital laboratory and order testing directly to your laboratory? As our reference laboratory partner, how will you support our e-health program? As our reference laboratory partner, how will you help in analyzing and stratifying your population to understand risk? How are you planning to leverage your laboratory as you adapt to the changing health care environment? 19

20 mayomedicallaboratories.com news.mayomedicallaboratories.com 4/30/2015

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