Sep 6, 2017 | Laboratory Management and Operations, Laboratory News, Laboratory Pathology, Managed Care Contracts & Payer Reimbursement, Management & Operations
Challenges getting paid likely to continue as high deductibles make patients responsible for paying much more of their healthcare bills
Rising out-of-pocket costs for healthcare consumers is translating into increasing amounts of red ink for hospitals and healthcare providers struggling to collect bills from patients with high-deductible health plans (HDHPs). Clinical laboratories and pathology groups are unlikely to be immune from these challenges, as increasing numbers of patients with smaller healthcare debts also are failing to pay their bills in full.
That’s according to a recent TransUnion Healthcare analysis of patient data from across the country. It revealed that 99% of hospital bills of $3,000 or more were not paid in full by the end 2016. For bills under $500, more than two-thirds of patients (68%) didn’t pay the full balance by year’s end (an increase from 53% in 2015 and 49% in 2014). The study also revealed that the percentage of patients that have made partial payments toward their hospital bills has fallen dramatically from nearly 90% in 2015 to 77% in 2016.
Increased Patient Responsibility Causing Decrease in Patient Payments
“The shift in healthcare payments has been taking place for well over a decade, but we are seeing more pronounced changes in how hospital bills are paid during just the last few years,” Jonathan Wilk, Principal for Healthcare Revenue Cycle Management at TransUnion (NYSE:TRU), said in a statement.
Millions of Americans are in high-deductible health plans. And, as the graphic above illustrates, that number has been increasing since the ACA was signed into law in 2010. (Graphic copyright: Reuters.)
While the Affordable Care Act (ACA) has increased the number of Americans receiving medical coverage through Medicaid or commercial insurance, TransUnion noted in its statement that hospitals still wrote off roughly $35.7 billion in bad debt in 2015. By 2020, TransUnion predicts that figure will continue to rise, with an estimated 95% of patients unable to pay their healthcare bills in full by the start of the next decade.
“Higher deductibles and the increase in patient responsibility are causing a decrease in patient payments to providers for patient care services rendered. While uncompensated care has declined, it appears to be primarily due to the increased number of individuals with Medicaid and commercial insurance coverage,” John Yount, Vice President for Healthcare Products at TransUnion, said in the TransUnion statement.
Collecting Patients’ Out-of-Pocket Costs Upfront
According to Reuters, hospitals in states that did not expand Medicaid under Obamacare have witnessed a more than 14% increase in unpaid bills as the number of people using health plans with high out-of-pocket costs increased. For hospitals in those states, HDHPs are impacting their bottom lines.
“It feels like a sucker punch,” declared Chief Executive Officer John Henderson of Childress Regional Medical Center, Texas Panhandle Region, in a Bloomberg Business article. “When someone has a really high deductible, effectively they’re still uninsured, and most people in Childress don’t have $5,000 lying around to pay their bills.”
A recent report from payment network InstaMed found that 72% of healthcare providers reported an increase in patient financial responsibility in 2016, a trend that coincides with a rise in the average deductible for a single worker to $1,478, more than double the $735 total in 2010.
In response to the increase in patient responsibility, hospitals and other providers are turning to new tactics for collecting money directly from patients, including estimating patients’ out-of-pocket payments and collecting those amounts upfront.
Hospital Systems Offer Patients Payment Options
Venanzio Arquilla is the Managing Director of the healthcare practice at The Claro Group, a financial management consultancy in Chicago. In an interview with Crain’s Chicago Business, he stated that hospitals are working overtime to get money from patients, particularly at the point of service.
“Hospitals have gotten much more aggressive in trying to collect at time of service, because their ability to collect on self-pay amounts decreases significantly when the patient leaves the building,” Arquilla noted. “You can’t say, ‘Give me your credit card’ to someone in the emergency room bleeding from a gunshot wound, but you can to someone going in for an elective procedure.”
Revenue loss due to unpaid medical bills among states that complied with Medicaid Expansion under the ACA has increase so dramatically, some hospitals are now offering patients prepayment discounts and no-interest loans to ensure payments. Clinical laboratories and anatomic pathology groups should develop strategies to respond to the increase collections from patients at the time of service. (Graphic copyright: Reuters.)
Richard Gundling, a Senior Vice President at the Healthcare Financial Management Association (HFMA), told Kaiser Health News that an estimated 75% of healthcare and hospital systems now ask for payment at the time services are provided. To soften the blow, some healthcare systems are providing patients with a range of payment options, from prepayment discounts to no-interest loans.
Novant Health, headquartered in North Carolina, is among those healthcare systems offering patients new payment strategies. Offering no interest loans to patients has enabled Novant to lower its patient default rate from 32% to 12%.
“To remain financially stable, we had to do something,” April York, Senior Director of Patient Finance at Novant Health, told Reuters. “Patients needed longer to pay. They needed a variety of options.”
Providers Must Adapt to New Patient Procedures
“Doctors need to understand the landscape has changed. A doctor’s primary concern use
to be whether a patient had insurance. Now, it’s the type of insurance,” Devon M. Herrick, PhD, a Senior Fellow at the National Center for Policy Analysis (NCPA) in Dallas, told Medical Economics.
While clinical laboratories and anatomic pathology groups traditionally have not collected money directly from patients, Herrick says healthcare providers must accept that the rules of the game have changed. “Patients are more cost-conscious now. That means patients will question their physicians about costs for procedures,” he adds.
Dark Daily has advised clinical laboratories in the past to develop tools and workflow processes for collecting payments upfront from patients with high-deductible health plans (See, “Growth in High Deductible Health Plans Cause Savvy Clinical Labs and Pathology Groups to Collect Full Payment at Time of Service,” Dark Daily, July 28, 2014). Not doing so can amount to millions of dollars in lost revenue to the medical laboratory industry.
—Andrea Downing Peck
Related Information:
Bad Debt Is the Pain Hospitals Can’t Heal as Patients Don’t Pay
Out of More Pockets
Patients May be the New Payers, But Two in Three Do Not Pay Their Hospital Bills in Full
Feel Like the Hospital Is Shaking You Down Over that Bill? It Probably Is
The Seventh Annual Trends in Healthcare Payments Report Is Here
Doctors and Hospitals Say, ‘Show Me the Money’ before Treating Patients
Ballooning Bills: More US Hospitals Pushing Patients to Pay before Care
Growth in High Deductible Health Plans Cause Savvy Clinical Labs and Pathology Groups to Collect Full Payment at Time of Service
Higher Annual Deductibles and Co-Payments Cause Hospitals to Intensify Efforts to Collect Directly from Patients; Medical Laboratories Now Feel Similar Financial Squeeze
Because of Sizeable Deductibles, More Patients Owe More Money to Clinical Pathology Laboratories, Spurring Labs to Get Smarter about Collecting from Patients
Sep 1, 2017 | Laboratory Management and Operations, Laboratory News, Laboratory Pathology, Laboratory Testing, Managed Care Contracts & Payer Reimbursement
Price transparency trend is altering decision-making in many aspects of healthcare and providing lesson for medical laboratory executives
Medical laboratory executives are well aware that price transparency is an increasingly powerful trend in healthcare. Now, as consumers increasingly opt for lower-cost options when making healthcare decisions, the 2010 Affordable Care Act (ACA) provides a notable example of this new reality, with consumers making cost, not choice, their top concern when selecting health plans through the federal health insurance marketplace exchanges.
A recent New York Times article reported that millions of people purchasing insurance in ACA marketplaces are motivated by how little they can pay in premiums, not the size of the physician and hospital networks, or an insurer’s reputation.
This economic reality may help explain why cost containment is a focus of healthcare reform bills currently under discussion in Congress. Whether you agree or disagree with the American Health Care Act (HR1628), the Republican Party’s plan to repeal and replace the ACA, it should be viewed in this broader context: Healthcare consumers are avoiding higher-priced healthcare plans in droves, and millions of younger Americans are finding the cost of coverage a barrier to entry. This is the challenge facing politicians of both parties, whether they will admit it publicly or not.
Obamacare Enrollee Numbers Dropping
A 2015 report by the Office of the Assistant Secretary for Planning and Evaluation in the Department of Health and Human Services, found that “the premium is the most important factor in consumers’ decision-making when shopping for insurance.” In 2014, 64% of people shopping in the marketplaces choose the lowest cost or second lowest cost plan in their metal tier, while 48% did so in 2015.
Perhaps more significantly, millions of people fewer than expected have enrolled in Obamacare. A CNN Money report noted that 10.3-million people enrolled in an ACA marketplace as of mid-March 2017, down from the 12.2-million who signed up for coverage when enrollment ended on January 31.
Mark T. Bertolini (left), Chief Executive of Aetna, and Joseph R. Swedish (right), Anthem’s Chief Executive, testified before a House committee hearing last fall. Major insurers are struggling to find a business model that works in the marketplaces created by the federal healthcare law. (Caption and photo copyright: New York Times/Jacquelyn Martin/Associated Press.)
Those numbers fall short of recent federal government projections for Obamacare and are dramatically less than original estimates. A 2015 report from Congressional Budget Office (CBO) projected marketplace enrollment would increase to 15-million in 2017, before rising to between 18-million and 19-million people a year from 2018 to 2026.
Shortly after Congress passed the ACA, the CBO projected that by 2016, 32-million people would gain healthcare coverage overall.
As a New York Times article pointed out, not only are young and healthy people selecting the cheapest ACA marketplace plans, but also many are opting to risk tax penalties and go without healthcare coverage.
“The unexpected laser focus on price has contributed to hundreds of millions of dollars in losses among the country’s top insurers, as fewer healthy people than expected have signed up,” the New York Times article noted.
ACA Marketplace Unsustainable, Says Anthem Chief Executive
Healthy younger people were expected to join the ranks of the insured and provide an essential counter balance that would offset insurers’ cost of care for newly insured unhealthy people. That prediction also has failed to materialize, forcing major insurance companies to re-evaluate their role in the marketplace or to exit Obamacare completely.
“The marketplace has been and continues to be unsustainable,” stated Joseph R. Swedish, Chairman, President and Chief Executive of Anthem, a Blue Cross and Blue Shield company, in the New York Times article.
In a CNN Money article, Anthem announced it would not participate in Ohio’s Obamacare exchange in 2018 and added that it was evaluating its participation in all 14 states where it currently offers plans.
“A stable insurance market is dependent on products that create value for consumers through the broad spreading of risk and a known set of conditions upon which rates can be developed,” Anthem stated in a press statement. “Today, planning and pricing for ACA-compliant health plans has become increasingly difficult due to the shrinking individual market as well as continual changes in federal operations, rules, and guidance.”
Inaccurate CBO Predictions Impact Clinical Laboratories and Pathology Groups
Anthem is not the only large insurer losing money selling insurance in the marketplaces. Humana and Aetna also this year scaled back their involvement with Obamacare, with Aetna citing $430-million in losses selling insurance to individuals since January 2014.
“Providing affordable, high-quality healthcare options to consumers is not possible without a balanced risk pool,” Aetna Chairman and CEO Mark T. Bertolini declared in an Aetna statement.
How this plays out may matter a great deal to the nation’s clinical laboratories and anatomic pathology practices. As noted above, in 2010, at the time that the Affordable Care Act was passed, the Congressional Budget Office estimated that as many as 32-million additional people would have health insurance in 2016 because of the ACA. The reality is much different. Less than a third of that number have health insurance policies because of the Affordable Care Act.
Pathologists and medical laboratory managers may want to consider how wrong that 2010 CBO estimate of coverage was. If the CBO’s estimate could be off by 66% in 2016, how reliable are CBO estimates when the federal agency scores the various “repeal and replace” bills that Republicans have proposed during the current Congress?
—Andrea Downing Peck
Related Information:
Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2016 to 2026
Cost, Not Choice, Is Top Concern of Health Insurance Customers
Health Plan Choice and Premiums in the 2016 Health Insurance Marketplace
CBO’s Analysis of the Major Health Care Legislation Enacted in March 2010
Obamacare Enrollment Slides to 10.3 Million
Anthem Statement on Individual Market Participation in Ohio
Aetna to Narrow Individual Public Exchange Participation
Aug 30, 2017 | Digital Pathology, Instruments & Equipment, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Management & Operations
Should this milestone be an indicator that more patients are willing to use telehealth to interact with providers, then clinical laboratories and pathology groups will need to respond with new ways to collect specimens and report results
Telehealth is gaining momentum at Kaiser Permanente (KP). Public statements by Kaiser administrators indicate that the number of virtual visits (AKA, telemedicine) with providers now is about equal to face-to-face visits with providers. This trend has many implications for clinical laboratories, both in how patient samples are collected from patients using virtual provider visits and how the medical laboratory test results are reported.
That this is happening at KP is not a surprise. The health system is well-known as a successful healthcare innovator. So, when its Chairman and Chief Executive Officer Bernard Tyson publically announced that the organization’s annual number of virtual visits with healthcare providers had surpassed the number of conventional in-person appointments, he got the members’ attention, as well as, the focus of former US Senator Bill Frist, MD, who moderated the event.
Tyson made this statement during a gathering of the Nashville Health Care Council. He informed the attendees that KP members have more than 100 million encounters each year with physicians, and that 52% of those are virtual visits, according to an article in Modern Healthcare.
However, when asked to comment about Tyson’s announcement during a video interview with MedCity News following the 13th Annual World Health Care Congress in Washington, DC, Robert Pearl, MD, Executive Director/CEO of the Permanente Medical Group and President/CEO of the Mid-Atlantic Permanente Medical Group (MAPMG), stated, “Currently we’re doing 13-million virtual visits—that’s a combination of secure e-mail, digital, telephone, and video—and we did 16-million personal visits. But, by 2018, we expect those lines will cross because the virtual visits [are] going up double digits, whereas the in-person visits are relatively flat.”
So, there’s a bit of disagreement on the current numbers. Nevertheless, the announcement that consumer demand for virtual visits was increasing sparked excitement among the meeting attendees and telemedicine evangelists.
“It’s astounding,” declared Senator Frist, “because it represents what we all want to do, which is innovate and push ahead,” noted an article in The Tennessean.
Is this a wake-up call for the healthcare industry? Should clinical laboratories start making plans for virtual patients?
Of virtual office visits, Pearl noted in the interview with MedCity News, “Why wouldn’t you want, if the medical conditions are appropriate, to have your care delivered from the convenience of your home, or wherever you might be, at no cost to you, and to have it done immediately without any delays in care?”
Pearl added that one-third of patients in primary care provider virtual visits are able to connect with specialists during those sessions.
“It’s better quality, greater convenience, and certainly better outcomes as care begins immediately,” he noted.
Kaiser Permanente ‘Reimagines’ Medical Care
The virtual visit milestone is an impactful one at Kaiser Permanente, an Oakland, Calif.-based nonprofit healthcare organization that includes Kaiser Foundation hospitals, Permanente Medical Groups, and the Kaiser Foundation Health Plan. It suggests that the KP has successfully integrated health information technology (HIT) with clinical workflows. And that the growing trend in virtual encounters indicates patients are becoming comfortable accessing physicians and clinicians in this manner.
As Tyson stated during the Nashville meeting, it is about “reimagining medical care.”
Bernard Tyson (right), Chairman and CEO of Kaiser Permanente, speaking with former Senator Bill Frist, MD (left), at the Nashville Health Care Council meeting where he announced that the non-profit provider’s number of virtual visits with patients had surpassed its face-to-face appointments. (Photo Credit: Nashville Health Care Council.)
What does “reimagining” mean to the bottom line? He shared these numbers with the audience, according to the Modern Healthcare report:
- 25% of the system’s $3.8 billion in capital spending goes to IT;
- 7-million people are Kaiser Permanente members;
- 95% of members have a capitated plan, which means they pay Kaiser Permanente a monthly fee for healthcare services, including the virtual visits.
The American Telemedicine Association, which itself interchanges the words “telemedicine” and “telehealth,” noted that large healthcare systems are “reinventing healthcare” by using telemedicine. The worldwide telemedicine market is about $19 billion and expected to grow to more than $48 billion by 2021, noted a report published by Research and Markets.
Consumers Want Virtual Health, but Providers Lag Behind Demand
Most Americans are intrigued with telehealth services. However, not everyone is participating in them. That’s according to an Advisory Board Company Survey that found 77% of 5,000 respondents were interested in seeing a doctor virtually and 19% have already done so.
Healthcare systems such as Kaiser Permanente and Cleveland Clinic are embracing telehealth, which Dark Daily covered in a previous e-briefing. However, the healthcare industry overall has a long way to go “to meet consumer interest in virtual care,” noted an Advisory Board news release about the survey.
“Direct-to-consumer virtual specialty and chronic care are largely untapped frontiers,” noted Emily Zuehlke, a consultant with The Advisory Board Company (NASDAQ:ABCO). “As consumers increasingly shop for convenient affordable healthcare—and as payers’ interest in low-cost access continues to grow—this survey suggests that consumers are likely to reward those who offer virtual visits for specialty and chronic care,” she stated.
Telehealth Could Increase Healthcare Costs
Does telehealth reduce healthcare spending? A study published in Health Affairs suggests that might not be the case. The researchers found that telemedicine could actually increase costs, since it drives more people to use healthcare.
“A key attraction of this type of telehealth for health plans and employers is the potential savings involved in replacing physician office and emergency department visits with less expensive virtual visits. However, increased convenience may tap into unmet demand for healthcare, and new utilization may increase overall healthcare spending,” the study authors wrote in the Health Affairs article.
Clinical Laboratories Can Support Virtual Healthcare
Clinical laboratories must juggle supporting consumer demand for convenience, while also ensuring health quality expectations and requirements. How can pathologists and medical laboratory leaders integrate their labs with the patient’s virtual healthcare experience, while also aiming for better and more efficient care? One way would be to explore innovative ways to contact patients about the need to collect specimens subsequent to virtual visits. Of course, the procedures themselves must be done in-person. Nevertheless, medical laboratories could find ways to digitally complement—through communications, test results sharing, and education—patients’ use of virtual visits.
—Donna Marie Pocius
Related Information:
Kaiser Permanente Chief Says Members are Flocking to Virtual Visits
Kaiser’s Tyson to Nashville: Health Care’s Future Isn’t in a Hospital
More Virtual Care Than Office Visits at Kaiser Permanente by 2018
Telemedicine Market Forecasts: 2016 to 2021
What do Consumers Want from Virtual Visits?
Virtual Visits with Medical Specialists Draw Strong Consumer Demand, Survey Shows
Direct-to-Consumer Telehealth May Increase Access to Care but Does Not Decrease Spending
Cleveland Clinic Gives Patients Statewide 24/7 Access to Physicians Through Smartphones, iPads, Tablets, and Online; Will Telemedicine Also Involve Pathologists?
Aug 28, 2017 | Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Managed Care Contracts & Payer Reimbursement, Management & Operations
Two different deals aim to bring a new style of healthcare insurance to individuals and small businesses
Designed to be a new model for health insurance, the much-watched Oscar Health (Oscar), founded in 2012, has just inked deals with both the Cleveland Clinic and Humana, Inc. What makes Oscar worth watching by pathologists and clinical laboratory managers is that the innovative insurer was founded and is run by Gen X and Gen Y (Millennial) executives.
Oscar Health is billed by its Millennial cofounders as a new type of health insurance—one that “curates” or coordinates members’ care with the help of health information technology (HIT) on the Internet, a smartphone app, and personalized services by concierge teams. So, it is interesting for pathologists and medical laboratory leaders to note that New York-based Oscar is partnering, through two different deals, with well-established Cleveland Clinic and rival Humana to enter the Ohio and Tennessee healthcare markets.
As Dark Daily reported in a previous e-briefing, Oscar aims to leverage sophisticated technology solutions and data to challenge complexity and costs associated with traditional healthcare insurance. An approach no doubt driven by the modern thinking of the company’s young founders. We alerted lab leaders that the insurance startup could be the latest example of technology’s power in the hands of Gen Y and Gen X entrepreneurs.
And while Oscar has reportedly experienced financial challenges, it is moving forward with the widely publicized new partnerships, as well as additional plans to expand insurance coverage in more states. Therefore, it’s important for clinical laboratory professionals to follow Oscar, which soon could be a healthcare payer of clinical laboratory and anatomic pathology services in more regions of the country.
Why Is Oscar Teaming Up with Cleveland Clinic, Humana?
In short, Cleveland Clinic is making its debut into the health insurance market with Oscar. And Oscar is moving into Ohio on the coat tails of this nationally prominent healthcare provider. The co-branded Cleveland Clinic/Oscar Health insurance plan will be offered to northeast Ohio residents in the fall for coverage effective Jan. 1, according to a Cleveland Clinic news release.
“This is a rare opportunity to work with the Cleveland Clinic to deliver the simpler, better, and affordable healthcare experience that consumers want,” said Mario Schlosser, Oscar’s Chief Executive Officer and cofounder in the news release.
Josh Kushner (left) and Mario Schlosser (right) cofounded Oscar Health, a New York-based health insurer that employs computer technologies, a mobile app, and concierge-style healthcare teams to provide members with a modern health plan experience and easy access to quality healthcare providers. (Photo copyright: Los Angeles Times.)
The coverage will be sold on and off the Ohio Affordable Care Act state exchange. Here’s what consumers will receive, noted statements by the Cleveland Clinic and Oscar Health:
- Access to primary care providers affiliated with the Cleveland Clinic, and an Oscar Health concierge team (a nurse and three care guides) that can refer patients based on their needs to other providers in the care continuum;
- Virtual care visits enabled by Cleveland Clinic Express Care Online and Oscar’s Virtual Visits;
- Smartphone technology to make it possible for members to explore their health needs, find options, and review costs.
“We are looking to build a new relationship among payers, providers, and patients. This relationship goes beyond the traditional approach of getting sick and seeing the doctor,” noted Brian Donley, MD, Cleveland Clinic’s Chief of Staff.
In an article on the partnership, Forbes suggested that narrow healthcare networks like the Cleveland Clinic/Oscar model might be just what the ACA exchanges need to remain operational.
However, a Business Insider article suggests that Oscar—already active in New York, Texas, and California health exchanges—could be adversely affected by a successful replacement of the ACA, currently being debated by Congressional lawmakers.
Nevertheless, Alan Warren, PhD, Oscar’s Chief Technology Officer, told Business Insider that the Cleveland Clinic/Oscar Health insurance plan would go forward even if Obamacare did not.
Formal Rival Humana Now Oscar’s Partner in Small Business Insurance
Meanwhile, the partnership with Humana takes Oscar, which launched Oscar for Business in April, 2017, further into the small business health insurance market. Humana and Oscar will sell commercial health insurance to small businesses in a nine-county Nashville, Tenn., area effective in the fall, according to a joint Oscar/Humana news release.
“The individual market was a good starting point. But it was clear from the beginning that the majority of insurance in the US is delivered through employers,” Schlosser stated in a New York Times article.
As to who does what, Beth Bierbower, Humana’s Group and Specialty Segment President, explained in an article in the Tennessean that Humana will contract with hospitals and doctors for small business insurance, while Oscar’s technology solutions will help small businesses and their employees manage healthcare benefits and gain access to providers. “These people [at Oscar] are on to something,” she noted. “They are doing something a little different. Maybe this is a situation where one plus one, together, might equal three.”
Future Growth Planned by Oscar
The New York Times called Nashville “a new step for Oscar,” and noted that it follows Oscar’s recent loss of $25.8 million during the first three months of 2017—47% less than Oscar lost during the same period in 2016. Since its inception, however, Oscar has raised $350 million in investment capital, much of it from Silicon Valley investors.
Also, Oscar’s small-business health insurance plans, which started in the spring in New York, might launch in New Jersey and California as well, an Oscar spokesperson stated in a Modern Healthcare article that also reported on Oscar’s intent to increase individual plans sold in the ACA Marketplace from three states to six in 2018.
Clinical Laboratories Benefit from Increased Consumer Access to Health Providers
Could Oscar succeed with its new Cleveland Clinic and Humana partners? Possibly. Both deals are pending regulatory approval as of this writing.
In any case, the whole idea of making insurance more palatable for consumers is something clinical laboratories, which are gateways to healthcare, should applaud and support. It is good to know that insurers like Oscar are using technology and personal outreach to ease consumers’ access to providers and help them explore options and costs.
—Donna Marie Pocius
Related Information:
Cleveland Clinic, Oscar Health to Offer Individual Health Insurance Plans in Northeast Ohio
Introducing Cleveland Clinic Oscar Health Plans
Oscar Health Partners with Cleveland Clinic on Obamacare Exchange
Oscar Health Partners with Cleveland Clinic
Oscar Health to Join Human in Small-Business Venture
Humana Oscar Health Pilot Small Business Insurance Partnership in Nashville
Oscar and Humana Team up to Sell Small-Business Plans
Insurance Start-Up Oscar Seeks to Shake Up Healthcare Through Its App
Gen Y Entrepreneurs Launch Oscar, A Consumer-Friendly Health Insurance Company in Bid to Disrupt Traditional Health Insurers
Aug 25, 2017 | Laboratory Management and Operations, Laboratory News, Laboratory Pathology, Laboratory Testing
In recent weeks, company representatives began informing physicians at cancer centers and hospitals about a problem with a specific variant in the MSH2 gene
Invitae Corporation (NYSE:NVTA), a genetic testing company in San Francisco, has told some physicians and clinicians in recent weeks that it has reported false-negative results. Clinical laboratory professionals with knowledge of the facts in this case believe the cause of the false negative results may have gone undetected for months and that genetic tests for a large number of patients may be involved.
For several weeks, Invitae has reported to its ordering physicians that it knows about a small number of false-negative reports that affect an estimated two to 10 patients who have a rare genetic variant in the MSH2 gene. The variant is known as the Boland Inversion and the gene is associated with Lynch syndrome (AKA, hereditary nonpolyposis colorectal cancer).
This episode may be a watershed event in the evolution of the genetic testing industry. Evidence indicates that genetic tests for a large number of patients were done incorrectly, and that the problem was systemic and went undetected by the lab company’s staff for as long as 11 months. Because these genetic tests were laboratory-developed tests (LDTs), the problem at Invitae could be used by some to argue that FDA regulation of LDTs is needed.
Invitae provided two written statements to The Dark Report, Dark Daily’s sister publication. The full statements can be read at the end of this story. The Dark Report is preparing a detailed intelligence briefing about this matter in its upcoming August 28 issue.
False Negative Reports for Some Genetic Tests
In one statement, the company wrote, “For the past several weeks Invitae has been working with clinicians to address an issue related to our analysis of a rare genetic variant in the MSH2 gene associated with Lynch syndrome (0.007% of inherited cancer tests), also known as the Boland inversion, which we believe could have led to a false negative report for a small number of patients (estimated 2-10 patients impacted).”
Invitae Corporation, founded in 2010, is a clinical laboratory company based in San Francisco that provides genetic testing services and has used aggressive pricing to fuel fast growth in specimen volume in recent years. According to the company’s 2017 second quarter earnings report, for the first six months of 2017 Invitae reported revenue of $27.7 million. Its net loss before taxes for the first six months of 2017 was $57.3 million. (Photo copyright: Yelp.)
After detecting the problem, the company began a root-cause analysis to determine the extent of the problem. “We would expect to observe the MSH2 Boland inversion event in 0.007% of patients undergoing hereditary cancer testing and approximately one in every 1,250 in patients with Lynch syndrome-spectrum cancers,” the company stated. “Based on these estimates, we expect this to impact a very small number of patients.”
Limited Number of Patients with False Negatives, but How Many Tests Involved?
The number of patients whose test results may have been affected is the subject of speculation among medical laboratory professionals who refer genetic tests to Invitae. Two medical directors at genetic testing laboratories pointed out that—based on the lab company’s estimate that false negatives were reported on just two to 10 patients—the problem could involve 3,000 to 12,500 patients.
The photo above taken Feb. 12, 2015, is of the Invitae management team at a happier time when the company’s shares began trading on the New York Stock Exchange (NYSE). (Photo copyright: Invitae.)
The company’s internal quality systems did not identify this problem. They learned about the problem from an outside source. Invitae said, “A client recently reported a discrepancy between an Invitae report and a report issued by another laboratory for the presence of a single rare mutation in MSH2, known as the Boland inversion. As soon as we learned of the discrepancy, we quickly identified and rectified the issue.”
The company confirmed that the problem with the Boland Inversion had gone undiscovered for 11 months, stating “We have identified all samples impacted by this issue, which were processed between September 2016 and July 2017. We are reanalyzing all previous results over the next several weeks to ensure their accuracy.”
Quality Control Checks for Omission of Assay Components
In its statement, Invitae referenced the quality-control issue, saying, “Because of the unique characteristics of how we were testing for the MSH2 Boland inversion, our quality control checks did not catch omission of the components of the assay. As soon as the omission was recognized and relevant components returned to the assay, it once again performed properly. We have added two separate quality controls to ensure this issue will not reoccur.”
The statement continued, saying, “We have identified all samples that could have been impacted by this error and are in the process of reanalyzing them free-of-charge.” The company also said, “Our ability to detect this specific MSH2 mutation has been fully restored and is functioning properly …. Moving forward, the new assay incorporates a quality check for successful capture and sequencing of the region around both ends of the Boland inversion so that the absence of the inversion gives a positive signal and the presence of the inversion gives a separate and different signal, while failure or absence of successful capture of these regions gives a third and different signal.”
To comply with federal and state clinical laboratory regulations, Invitae confirmed that it had conducted a root cause analysis (RCA) and was addressing the problem, notifying physicians and patients as necessary.
“We have been reaching out to all customers with patients who could have been impacted by this issue. We have samples to conduct reanalysis for all patients and will reach out to individual clinicians if any of those samples are deemed ‘quantity not sufficient’ (QNS) and new ones are required. However, the assay developed and validated for reanalysis is designed to use very small amounts of DNA, so we anticipate the number of new samples needed will be small.”
Retesting may be a greater challenge for Invitae than is indicated by its statement. Several pathologists told The Dark Report that such retesting comes with several problems. For example, certain states require patient samples used in genetic testing to be destroyed within a set time period. In such cases, the lab would need to work with the physician to have the patient provide a new sample for the retest. Also, it is common for genetic testing to use so much of a sample that the amount remaining is inadequate for a retest. In these cases, a new sample must be collected.
Another issue for Invitae will involve both the time to retest and the cost to retest. One lab executive pointed out that Invitae’s lab accessions had almost tripled from 12,500 in the second quarter of 2016 to 30,500 in second quarter of 2017. “Their lab is already straining to stay up with that volume increase. If Invitae must retest, say, 10,000 or more patient samples because of the MSH2 Boland inversion problem, this can seriously overload their lab and cause significant delays in turnaround time for all samples,” he explained.
A point of interest for pathologists and laboratory directors is whether any clinicians have filed a complaint or notified Invitae’s laboratory accreditation organizations, and the federal and state lab regulators, about the problems they had with this specific MSH2 mutation in their genetic tests and genetic test panels. Invitae has not commented on that situation.
Finally, the consequences for the patients whose genetic tests were performed by Invitae during this 11-month period should be considered. One executive from a large genetic testing lab in the Northeast said it best: “Every lab that performs genetic testing is in the rare mutation business!” he declared. “The mission is specifically to test for rare mutations and accurately identify the 1-in-1,000,000 mutation to enable that patient to get the right treatment that is invariably life-changing.
“Thus, for any lab like Invitae to tell its physicians that ‘only a few patients’ may have been given a false negative result from their genetic test betrays the quality and accuracy that all physicians, patients, and their families expect of our labs,” he continued. “Remember that what physicians and patients do with these results is very drastic! I consider it a massive failure anytime a genetic lab—whether large or small—misses rare mutations in even a small number of patients because of problems at the bench.”
—The Dark Report Editorial Team
Invitae provided two statements to The Dark Report. Here is the first statement, in full, dated Aug. 24 from Invitae, titled, “Statement on Boland Inversion Testing.”
“For the past several weeks Invitae has been working with clinicians to address an issue related to our analysis of a rare genetic variant in the MSH2 gene associated with Lynch syndrome (0.007% of inherited cancer tests), also known as the Boland inversion, which we believe could have led to a false negative report for a small number of patients (estimated 2-10 patients impacted).
“Our immediate priority has been getting accurate and actionable information to patients and clinicians about what happened and the steps we are taking to address the situation. We have identified all samples that could have been impacted by this error and are in the process of reanalyzing them free-of-charge. We have been personally reaching out to clinicians whose patients may have been impacted to discuss the issue, outlining what we have done to correct it and explaining the timeframe for receiving updated information. We are also offering no-cost family variant testing for the immediate families of any patient who tests positive for the Boland inversion variant, something we do for all our patients who test positive for a pathogenic variant.
“Our ability to detect this specific MSH2 mutation has been fully restored and is functioning properly. The corrected assay has been revalidated and shown to have regained its previous high sensitivity for the Boland inversion for all samples currently in the lab. Dual quality control checks specific to this issue have been added and are performing properly. We have also reviewed all of our other testing and are confident that this was an isolated error. Our ability to detect other MSH2 mutations or mutations in any other genes in our testing panels was not affected.
“Because of the unique characteristics of how we were testing for the MSH2 Boland inversion, our quality control checks did not catch omission of the components of the assay. As soon as the omission was recognized and relevant components returned to the assay, it once again performed properly. We have added two separate quality controls to ensure this issue will not reoccur.
“We take the reliability and validity of our test results extremely seriously. Nothing is more important to our company than ensuring that the information we provide is accurate. It is extremely rare that we find an error, but when we do we will quickly to correct it and share information with clinicians, in keeping with the medical community’s standards for error reporting.”
This is the second written statement, in full, provided to The Dark Report on Aug. 24. Invitae said:
“A client recently reported a discrepancy between an Invitae report and a report issued by another laboratory for the presence of a single rare mutation in MSH2, known as the Boland inversion. As soon as we learned of the discrepancy, we quickly identified and rectified the issue.
“We have identified all samples impacted by this issue, which were processed between September 2016 and July 2017. We are reanalyzing all previous results over the next several weeks to ensure their accuracy.
“We would expect to observe the MSH2 Boland inversion event in 0.007% of patients undergoing hereditary cancer testing, and approximately one in every 1,250 in patients with Lynch syndrome-spectrum cancers. Based on these estimates, we expect this to impact a very small number of patients.
“Moving forward, the new assay incorporates a quality check for successful capture and sequencing of the region around both ends of the Boland inversion so that the absence of the inversion gives a positive signal and the presence of the inversion gives a separate and different signal, while failure or absence of successful capture of these regions gives a third and different signal.
“We have been reaching out to all customers with patients who could have been impacted by this issue. We have samples to conduct reanalysis for all patients and will reach out to individual clinicians if any of those samples are deemed ‘quantity not sufficient’ (QNS) and new ones are required. However, the assay developed and validated for reanalysis is designed to use very small amounts of DNA, so we anticipate the number of new samples needed will be small.”
Aug 23, 2017 | Digital Pathology, Instruments & Equipment, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing
Technology allows retrievable information to be recorded directly into the genomes of living bacteria, but will this technology have value in clinical laboratory testing?
Researchers at Harvard Medical School have successfully used CRISPR technology to encode an image and a short film into the Deoxyribonucleic acid (DNA) of bacteria. Their goal is to develop a way to record and store retrievable information in the genomes of living bacteria. A story in the Harvard Gazette described the new technology as a sort of “biological hard drive.”
It remains to be seen how this technology might impact medical laboratories and pathology groups. Nevertheless, their accomplishment is another example of how CRISPR technology is leading to new insights and capabilities that will advance genetic medicine and genetic testing.
The researchers published their study in the journal Science, a publication of the American Association for the Advancement of Science (AAAS).
Recording Complex Biological Events in the Genomes of Bacteria
Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR) are DNA sequences containing short, repetitive base sequences found in the genomes of bacteria and other micro-organisms that can facilitate the modification of genes within organisms. The term CRISPR also can refer to the whole CRISPR-Cas9 system, which can be programmed to pinpoint certain areas of genetic code and to modify DNA at exact locations.
Led by George Church, PhD, faculty member and Professor of Genetics at Harvard Medical School, the team of researchers at the Wyss Institute for Biologically Inspired Engineering at Harvard University in Cambridge, Mass., constructed a molecular recorder based on CRISPR that enables cells to obtain DNA information and produce a memory in the genome of bacteria. With it, they inserted a GIF image and a five-frame movie into the bacteria’s DNA.
“As promising as this was, we did not know what would happen when we tried to track about 100 sequences at once, or if it would work at all,” noted Seth Shipman, PhD, Postdoctoral Fellow, and one of the authors of the study in the Harvard Gazette story. “This was critical since we are aiming to use this system to record complex biological events as our ultimate goal.”
Translating Digital Information into DNA Code
The team transferred an image of a human hand and five frames of a movie of a running horse onto nucleotides to imbed data into the genomes of bacteria. This produced a code relating to the pixels of each image. CRISPR was then used to insert genetic code into the DNA of Escherichia coli (E-coli) bacteria. The researchers discovered that CRISPR did have the ability to encode complex information into living cells.
“The information is not contained in a single cell, so each individual cell may only see certain bits or pieces of the movie. So, what we had to do was reconstruct the whole movie from the different pieces,” stated Shipman in a BBC News article. “Maybe a single cell saw a few pixels from frame one and a few pixels from frame four … so we had to look at the relation of all those pieces of information in the genomes of these living cells and say, ‘Can we reconstruct the entire movie over time?’”
The team used an image of a digitized human hand because it embodies the type of intricate data they wish to use in future experiments. A movie also was used because it has a timing component, which could prove to be beneficial in understanding how a cell and its environment may change over time. The researchers chose one of the first motion pictures ever recorded—moving images of a galloping horse by Eadweard Muybridge, a British photographer and inventor from the late 19th century.
“We designed strategies that essentially translate the digital information contained in each pixel of an image or frame, as well as the frame number, into a DNA code that, with additional sequences, is incorporated into spacers. Each frame thus becomes a collection of spacers,” Shipman explained in the Harvard Gazette story. “We then provided spacer collections for consecutive frames chronologically to a population of bacteria which, using Cas1/Cas2 activity, added them to the CRISPR arrays in their genomes. And after retrieving all arrays again from the bacterial population by DNA sequencing, we finally were able to reconstruct all frames of the galloping horse movie and the order they appeared in.”
In the video above, Wyss Institute and Harvard Medical School researchers George Church, PhD, and Seth Shipman, PhD, explain how they engineered a new CRISPR system-based technology that enables the chronological recording of digital information, like that representing still and moving images, in living bacteria. Click on the image above to view the video. It is still too early to determine how this technology may be useful to pathologists and clinical laboratory scientists. (Caption and video copyright: Wyss Institute at Harvard University.)
“In this study, we show that two proteins of the CRISPR system, Cas1 and Cas2, that we have engineered into a molecular recording tool, together with new understanding of the sequence requirements for optimal spacers, enables a significantly scaled-up potential for acquiring memories and depositing them in the genome as information that can be provided by researchers from the outside, or that, in the future, could be formed from the cells natural experiences,” stated Church in the Harvard Gazette story. “Harnessed further, this approach could present a way to cue different types of living cells in their natural tissue environments into recording the formative changes they are undergoing into a synthetically created memory hotspot in their genomes.”
Encoding Information into Cells for Clinical Laboratory Testing and Therapy
The team plans to focus on creating molecular recording devices for other cell types and on enhancing their current CRISPR recorder to memorize biological information.
“One day, we may be able to follow all the developmental decisions that a differentiating neuron is taking from an early stem cell to a highly-specialized type of cell in the brain, leading to a better understanding of how basic biological and developmental processes are choreographed,” stated Shipman in the Harvard Gazette story. Ultimately, the approach could lead to better methods for generating cells for regenerative therapy, disease modeling, drug testing, and clinical laboratory testing.
According to Shipman in the BBC News article, these cells could “encode information about what’s going on in the cell and what’s going on in the cell environment by writing that information into their own genome.”
This field of research is still new and its full potential is not yet understood. However, if this capability can be developed, there could be opportunities for pathologists and molecular chemists to develop methods for in vivo monitoring of a patient’s cell function. These methods could prove to be an unexpected new way for clinical laboratories to add value and become more engaged with the clinical care team.
—JP Schlingman
Related Information:
New CRISPR Technology Takes Cells to the Movies
Molecular Recordings by Directed CRISPR Spacer Acquisition
GIF and Image Written into the DNA of Bacteria
Pro and Con: Should Gene Editing be Performed on Human Embryos?
CRISPR Gene Editing Can Cause Hundreds of Unintended Mutations
Intellia Therapeutics Announces Patent for CRISPR/Cas Genome Editing in China
Everything You Need to Know about CRISPR, the New Tool that Edits DNA
Breakthrough DNA Editor Born of Bacteria
Patent Dispute over CRISPR Gene-Editing Technology May Determine Who Will Be
Top Biologists Call for Moratorium on Use of CRISPR Gene Editing Tool for Clinical Purposes Because of Concerns about Unresolved Ethical Issues
