January’s press release confirmed the tech company is working to integrate critical medical data into its mobile devices, while further promoting interoperability and patient access
While interoperability has improved since the earliest electronic health record (EHR) systems, today’s active patients often need to sort through multiple healthcare portals—including those of clinical laboratories and anatomic pathology groups—to get a comprehensive view of their medical history. Not only can this be time consuming, but also inconvenient if the patient lacks access to a computer.
Thus, it’s no surprise that in a January 24 press release, mobile technology giant Apple announced plans to enter the development ring and create an improved EHR for its mobile device users by updating its existing “Health” mobile application (app). The iOS 11.3 update, among other things, is designed to enable Apple iPhone owners to receive critical medical data, such as medical laboratory test results, directly on their devices.
“Our goal is to help consumers live a better day. We’ve worked closely with the health community to create an experience everyone has wanted for years—to view medical records easily and securely right on your iPhone,” said Apple COO Jeff Williams in the press release.
Jeff Williams (above), COO at Apple, notes that, “By empowering customers to see their overall health, we hope to help consumers better understand their health and help them lead healthier lives.” (Photo copyright: Apple.)
The new features are already available to developers in the latest iOS 11.3 beta 3 release. However, release to the public is expected soon with the issuance of the iOS 11.3 final release. This means that patients will not need to download extra apps—or remember to use them—to take advantage of the feature.
New Way to Improve Patients’ Access to Health Data or Just Another Data Silo?
The Apple Health Records platform adheres to Fast Healthcare Interoperability Resources (FHIR) protocols for transmission of data. Providers send information to Apple which then aggregates the information, transmits it to patients’ iPhones and notifies them of the updates.
All information stored on the device is encrypted in storage and protected from unauthorized access by the user’s password.
Through the new Health Records interface, users view this aggregated data as a timeline, conduct searches, and share information with other parties as they deem appropriate.
Current medical information listed in the press release includes:
Allergies;
Conditions;
Immunizations;
Clinical laboratory results;
Medications;
Procedures; and,
Vitals.
Currently, the platform integrates data from three major EHR developers:
Epic;
Cerner; and,
AthenaHealth
Apple’s update to the Health app makes it easier for people to access and control of all of their health records and data. This included medical laboratory tests. (Image and caption copyright: Apple.)
Apple is also working with 12 health institutions across the US in the first phase of the project, including:
In the Apple press release, Stephanie Reel, CIO at John Hopkins Medicine in Baltimore, stated, “Streamlining information sharing between patients and their caregivers can go a long way towards making the patient experience a positive one. This is why we are excited about working with Apple to make accessing secure medical records from an iPhone as simple for a patient as checking email.”
Previous Attempts at Mobile Health Record Devices Got Mixed Results
This isn’t the first time a major technology company has attempted to enter the mobile health market. Google Health was shuttered in 2011 citing low adoption. Wearable fitness trackers, such as Fitbit (NYSE:FIT) enjoyed a bubble, but are now seeing mixed success in terms of long-term adoption and use, according to The Motley Fool. More to the point, they’ve never quite become the holy grail of monitoring and data collection that some experts predicted, Huffington Post reported.
Larry Dignan, Editor-in-Chief at ZDNet, builds a compelling case for why this could be the attempt that succeeds in providing a consolidated platform for clinical laboratories, physicians, and other care providers to push data directly to patients and—with the patient’s permission—to each other, regardless of the platforms healthcare facilities use to store and transmit data.
He notes that much of Apple’s newest features build on foundations laid by the healthcare industry to create scalable, functional EHR systems. By working with existing protocols, Apple’s Health Records platform is already positioned for compatibility with many healthcare providers.
Furthermore, Apple is already known for partnering at the enterprise level with major businesses and industries, while also holding the trust of millions of Americans who store their personal information on Apple devices.
Is Apple the Future of EHRs?
Despite this, until the platform—and adoption by the public—is proven a success, it will be yet another walled garden of medical information. Even then, Apple is only one segment of the global mobile market.
Unless Apple provides access to other platforms (such as Android), those patients—and the medical communities serving them—are left consolidating information on their own through a sprawl of various portals. This also means that medical laboratories, pathology groups, and other service providers must continue to invest time and funding into communicating data in ways compatible with a plethora of internal and external systems and software.
Still, the platform offers an intriguing glimpse at the future of medical records and heralds a shift toward empowering patients with easy, comprehensive access to their own data, which would be a boon to the medical laboratory industry.
Operations ended last week after reports suggested the end came as a result of misalignment of goals among investors in a lab company many considered to be successful
One contributing factor the surprise announcement that the owners of Claritas Genomics were closing the clinical laboratory company may have been the struggle to get payers to reimburse its genetics test claims. If true, it is the latest market sign of how health insurers are making it difficult for labs to get paid for proprietary molecular diagnostic assays and genetic tests.
With no official announcement, Claritas Genomics quietly ended operations effective on Friday, Jan. 19. That evening, a spokeswoman for Claritas Genomics’ majority owner, Boston Children’s Hospital (BCH), confirmed for Dark Daily that the lab was closed and said no reason was given for the closing. More details may be forthcoming this week, she added.
As of the close of business on Tuesday, there was still no word from the genetics testing company founded in 2013. GenomeWeb was the first to report that Claritas Genomic’s diagnostic laboratories no longer do any testing. According to GenomeWeb, Brian Quirbach, former Clinical Testing Coordinator at Claritas Genomics, and part of the lab’s client services team, confirmed that the last day of business was Friday, Jan. 19. The BCH spokeswoman said the GenomeWeb article was accurate.
Asked if there had been a precipitating event at Claritas, if the company had experienced any serious business trouble, if it had struggled to get paid, or if payers were slow in paying, the spokeswoman declined to comment. Instead, she referred to the GenomeWeb article, saying it was mostly accurate.
Claritas Genomics a Casualty of Clinical Laboratory Price Wars
According GenomeWeb, Claritas was like other genetic testing laboratories that have long struggled to get health insurers to pay for rare disease tests. Also, Claritas and other genetic and molecular testing labs suffer financially as a direct result of the ongoing price wars among competing genetic testing lab companies.
“As a small company, it also wasn’t able to offer testing that did not come with potential patient payment obligations, which larger laboratories with better resources or payer contracts can do,” the GenomeWeb article noted.
According to GenomeWeb’s sources, Claritas had a reputation for delivering highly-accurate test results. The reason for this level of performance, the article noted, was Claritas’ use of two sequencing platforms, which lowered false-positive rates. The testing lab combined low false-positive rates with interpretations from WuXi NextCode. The clinical expertise available at BCH gave Claritas the best diagnostic exome in the industry in terms of technical quality and diagnostic power, one source told GenomeWeb.
The decision to close the company, the source noted, was a result of misalignment between investors at WuXi NextCode and BCH. Other sources speculated that Claritas and WuXi NextCode were considering a merger, which did not happen, GenomeWeb reported.
Ultimately, the source stated, BCH held the controlling interest and made the business decision to close the clinical laboratory company. And that the decision was unrelated to the lab’s quality.
Claritas’ clients were told, according to GenomeWeb, to download all test results and data by Thursday, Jan. 18, and that the lab’s operations manager would be available for a few weeks to answer customers’ questions.
Genetic Tests Developer for Pediatrics and Hereditary Disorders
Claritas, which was headquartered in Cambridge, Mass., had about 30 employees. When it was founded as a partnership between BCH and Life Technologies, its goal was to develop genetic and genomics-based diagnostic tests, primarily for pediatric patients with hereditary disorders.
In 2014, Dark Daily’s sister print publication The Dark Report (TDR) reported on the development of Claritas Genomics as an in-hospital lab that became independent. For 15 years, the lab operated as the genetic diagnostic laboratory at 396-bed BCH, we reported. (See The Dark Report, “Claritas Is Example of New Lab Business Model,” June 13, 2014.)
“As one of the hospital’s CLIA-certified laboratories, it provided the advanced molecular diagnostic testing services used by the hospital,” said Patrice M. Milos, PhD, who was Claritas Genomic’s CEO at the time.
At the 2014 Executive War College in New Orleans, Patrice Milos, PhD, then President and CEO, Claritas Genomics, spoke with Adam Slone, CEO, Slone Partners, about her path to becoming CEO of Claritas Genomics, how to foster a strong company culture, and what traits she looks for in a leadership team. Click on the photo above to watch the video interview. (Video copyright: Sloan Partners.)
In the early days of Claritas Genomics, BCH was challenged to provide the capital and resources needed for the molecular lab to grow, Milos said. “This was due to the rapid pace of genetic discovery, ongoing advances in gene sequencing technologies, and the difficult financial environment in healthcare,” she recalled. “Thus, to make it easier for the lab to grow, the hospital spun out the lab and created Claritas Genomics in February 2013.”
Informatics Tools to Support Clinical Use of Genetic Data
As an independent lab, Claritas had early success winning a role to do testing for the Million Veteran Program (MVP), a $9-million project of the US Department of Veterans Affairs. In October 2013, the lab company reported that it would do exome sequencing of samples from veterans. At the time, it was one of the largest sequencing initiatives in the nation. (The VA has since reported in 2016 that the program was the largest genomic database in the world.)
Further, this MVP was significant because Claritas benefited by generating cash flow, which it could use to acquire the gene sequencing system and staff expertise in next-generation sequencing (NGS) technologies. And, it developed the informatics infrastructure needed to collect, store, and analyze large volumes of genetic data, TDR reported.
Two months later, in December 2013, Claritas entered into a partnership with Cerner Corp. of Kansas City, Mo., to build the tools and connectivity systems needed to integrate NGS-based diagnostic testing into healthcare data systems. Specifically, the companies said they would develop a system “for molecular diagnostics that is tailored to NGS workflows, which are more complex and generate much more data than traditional molecular diagnostic tests.”
At the time, Milos explained the role that Claritas would play in this partnership. “In terms of this collaboration, one barrier to the use of genomics in medicine is the challenge of integrating the complex information derived from large-scale genomic measurements into a patient’s medical record and clinical practice,” he said. “Our mutual goal is to develop the informatics tools that support clinical use of genetic data.”
Claritas also was working with other pediatric institutions, such as Cincinnati Children’s Hospital, to advance clinical knowledge in a number of ways. “For example, we are facilitating a research network by connecting patients with experts who can provide care and by licensing assays from the hospitals where the discoveries that lead to diagnostic tests are made,” Milos said. “Also, in this business model, we can receive investment from outside sources, such as we have from two of our Series A investors, Life Technologies and Cerner.”
The abrupt closure of Claritas Genomics makes this clinical laboratory company the latest to disappear from the marketplace. The mystery factor in this case is why a company viewed by many as establishing a credible reputation for itself came to such a sudden end.
Lack of Medicare or third-party payer coverage for most genetic screening tests in healthy adults is not discouraging development of new gene testing products
With the global anatomic pathology genetic testing market poised to reach $9.8 billion by 2025, clinical laboratories continue to develop new genetic screening tests (rather than diagnostic tests) intended to help physicians identify patients who carry inherited genetic mutations that could put them or their future children at higher risk for chronic disease, such as cancer.
This is a bit of a gamble since (with some exceptions) Medicare and many health insurers typically will not pay for predictive and presymptomatic genetic tests and services used to detect an undiagnosed disease or disease predisposition.
Nevertheless, Inkwood Research of Gurugram, India, predicts in its “Global Genetic Testing Market Forecast 2017-2024” report that aging populations throughout the world will be the driving force producing “enormous opportunities for the global genetic testing market.” The research firm anticipates this will result in a 9.93% increase in annual sales revenue during each of the next seven years.
Screening versus Diagnostic Testing Gains Popularity Among Patients, Physicians
Genetic diagnostic testing promises to accelerate the growth of precision medicine by guiding the diagnosis and treatment of cancer and other chronic diseases. However, genetic tests that “screen” healthy patients for predispositions to certain diseases also are gaining traction in the marketplace.
“Consumers can now have direct access to certain genetic risk information,” Jeffrey Shuren, MD, Director of the FDA’s Center for Devices and Radiological Health, said in a press release. “But it is important that people understand that genetic risk is just one piece of the bigger puzzle, it does not mean they will or won’t ultimately develop a disease.”
Robert Green, MD, MPH, a Professor of Medicine at Harvard Medical School, told NPR that consumers should have access to genetic information. However, they also need to understand its limitations.
“Some people really want this [genetic] information on their own, and others want it through their physician,” Green said. “Both those channels are legitimate. People should just be aware that this information is complicated.”
According to the Inkwood Research report, “The global genetic testing market is anticipated to grow from $4,614 million in 2016 to $9,806 million by 2025, at a CAGR [Compound Annual Growth Rate] of 9.93% between 2017 and 2025. The important driver increasing growth in the global genetic testing market is an aging population on the rise. The rising geriatric population is driving the global genetic testing market to a significant level.” (Caption and graphic copyright: Inkwood Research.)
One example of genetic screening tests is the Quest Diagnostics (NYSE:DGX) QHerit Pan-Ethnic Expanded Carrier Screen, which offers couples the opportunity to test for 22 genetic diseases that could be passed on to their children, including:
“The United States is truly a melting pot, and it no longer makes sense for physicians to assume genetic screening is appropriate for an individual based on presumed race or ethnicity,” Felicitas Lacbawan, MD, Executive Medical Director, Advanced Diagnostics, Quest Diagnostics, stated in a press release. “QHerit is designed for any woman and her partner, not just those in a specific, so-called high-risk ethnic or racial group.”
Genetic Screening in Primary Care Helps Assess Risk for Chronic Disease
Genetic diagnostic test developer Invitae (NYSE:NVTA) also points to growing evidence of the genetic screening test’s value to healthy individuals. In September 2017, Invitae presented initial findings at the National Society of Genetic Counselors 36th Annual Conference. The study showed a retrospective analysis of 120 patients tested with a proactive genetic screening panel for healthy adults had revealed medically significant findings for nearly one in five patients.
“Interest among otherwise healthy adults in using genetic information to understand their risk of disease conditions continues to grow each year, ” Robert Nussbaum, MD, Chief Medical Officer of Invitae, said in a press release. “These and other data show that interest is well-placed, with a substantial group of patients showing genetic variants associated with elevated risk of diseases like cancer where monitoring and early intervention can be helpful. Use of genetic screening in the primary care setting can assess risk to help shape individual screening plans. We are continually adding tools and resources that help reduce barriers to the widespread use of genetic information in mainstream medical practice.”
Routine Genetic Screening Could Become Norm, CDC Says
The Centers for Disease Control and Prevention (CDC) notes that newborn screening is “currently the largest public health genetics program in the world,” with more than four million babies screened at birth each year for 30 or more genetic conditions. In the CDC’s “Genomics and Health Impact Blog,” the agency continues to maintain a “cautionary attitude about personal genomic tests” beyond the newborn period, directing those considering direct-to-consumer laboratory testing, such as 23andMe and MyMedLab, to “think before you spit.”
Nonetheless, the CDC acknowledges routine genetic screening of healthy people could become the norm. However, others advise caution.
“To be sure, while the use of genome sequencing is promising in certain clinical scenarios, such as rare diseases and cancer, we do not think that whole genome sequencing in the general population is appropriate at this time,” Muin J. Khoury, PhD, MD, Director, Office of Public Health Genomics, CDC, wrote in a January 30, 2017, blog post. “We would not recommend its use outside research studies … But it is also becoming clearer that as science progresses, we are discovering more opportunities for using genetic screening of healthy individuals for preventing common diseases across the lifespan, outside of the newborn screening context.”
The impact on clinical laboratories and anatomic pathology groups should genetic screening become normalized should be clear: Labs will be tasked with performing these tests, and pathologists will be needed to interpret them and educate both physicians and patients on the findings.
Before that, however, genetic screening tests will need to be fully supported by government, and insurers, including Medicare, will have to agree to pay for them.
Recognizing the need to serve patients with high-deductible health plans, hospital systems are opening healthcare centers in outpatient settings where patients can receive care and undergo procedures—including clinical laboratory tests—more conveniently and for less cost
Health systems are putting medical imaging services, such as MRIs, in strip malls and shopping centers as a way to make it easier for patients. Such locations can also offer lower-cost procedures because of lower overhead compared to imaging centers located in hospitals. This trend to offer patients more convenient service at a lower cost is something that clinical laboratory managers and pathologists should watch and understand.
One driver behind this trend is the growing number of Americans enrolled in High Deductible Health Plans (HDHPs), where deductibles can exceed $6,000 for individuals and $12,000 for families. With such high deductibles, patients are now keenly focused on the cost of their healthcare. Medical laboratories and anatomic pathology groups have been impacted by this trend, as more patients shell out cash to pay for walk-in procedures and providers must collect full payments for services rendered.
Hospitals and health systems recognize the increased demand for outpatient, lower-priced medical services, along with price transparency. Patients with HDHPs are one reason why hospital bad debt is growing.
Healthcare Shopping Drives Lower Costs and Convenience
Price shopping on the Internet for medical services also is becoming more popular due to the availability of online doctor and facility ratings and easily-accessible price comparisons.
There are more than 7,000 stand-alone imaging centers in the US that operate independently of hospitals. About 70% of diagnostic imaging services occur in hospital settings with the other 30% performed in outpatient facilities.
According to Amino, a healthcare transparency company based in San Francisco, the cost for an MRI can vary significantly depending on where a patient lives and what type of facility is utilized for the test. Their research found that the cost of a limb MRI can range from hundreds of dollars at a freestanding facility to as much as $4,000 at a hospital. In some states, the price difference between getting an MRI at a hospital versus a stand-alone facility was almost $2,000. The average cost of having an MRI performed in a hospital setting is $2600.
Based on data from Amino, the graphic above illustrates the wide range of prices for MRIs throughout the country, and the cost disparity between hospital and free-standing medical imaging centers. In the future, pathologists and clinical laboratory managers can expect to see the publication of similar graphs that show the variation in the cost of clinical laboratory tests and anatomic pathology procedures, not just by state, but by individual laboratories. (Graphic copyright: MBO.)
Smart Choice MRI, based in Mequon, Wis., charges a maximum price of $600 for an MRI. The company now has 17 locations in Illinois, Minnesota, and Wisconsin, but plans to have 90 facilities within the next three years.
“The rise of high deductible health plans has fueled consumers who understand their options and demand a higher level of service from their providers,” Rick Anderson, Chief Executive Officer of Smart Choice MRI told the StarTribune. “Quality, service-focused care at a fair, transparent price has never been more important.”
Anderson added that his company can handle 94% of MRI procedures in their convenient, freestanding imaging facilities.
“I think the quality is very good, but we’ve combined the cost and quality, and most importantly the convenience of being in the neighborhood where people are shopping,” Anderson said. “If you look at our Richfield (Minnesota) location, we’re literally next to SuperTarget, Caribou Coffee, Noodles and Company, and Qdoba.”
Public and Private Health Insurers Shift Payments to Free-standing Facilities
Anthem recently announced they will no longer pay for outpatient MRIs and CT scans performed at hospitals in almost all of the states where the health insurer does business. They are requiring patients to have the tests performed in free-standing imaging facilities in an effort to cut costs and lower premiums. This change could affect 4.5 million people in 13 of the 14 states Anthem serves, with New Hampshire being the exception.
Diagnostic imaging is not the only medical service transitioning to outpatient facilities.
In July, the Centers for Medicare and Medicaid Services (CMS) announced that it is considering payment approval for total hip and knee replacements performed in outpatient settings. This change could go into effect as early as next year.
According to Steve Miller, Chief Operating Officer at Ambulatory Surgery Center Association, an estimated 25-50% of joint replacements could be performed on an outpatient basis.
“There’s more and more comfort among surgeons who are coming out of residencies where they trained to do surgeries on an outpatient basis,” Miller told Modern Healthcare. “The volumes are doubling year over year.”
Surgeons Approve of Free-standing Surgery Centers
There are currently more than 5,500 ambulatory surgery centers in the country and upwards of 200 of those facilities are performing outpatient joint replacement procedures. Three years ago, there were only around 25 facilities providing these services.
In 2015, there were more than 658,000 total hip and knee replacements performed on Medicare beneficiaries, according to CMS data. In 2014, the government paid more than $7 billion for the hospitalization costs of these two procedures. The CMS estimates that the cost for uncomplicated knee replacement surgeries in 2018 will be $12,381 for an inpatient procedure and $9,913 for the outpatient rate.
Physicians feel that performing joint replacements in outpatient facilities could reduce costs by up to 50%.
“I could do maybe 20% of my Medicare patients on an outpatient basis, as long as they have the support and structure at home to help them recover,” said Matthew Weresh, MD, a physician at Des Moines Orthopedic Surgeons (DMOS) in the Modern Healthcare article. “It’s a great move by Medicare.” DMOS plans to begin performing joint replacements at an ambulatory surgery center later this year.
Pathologists would be wise to monitor this trend and anticipate how anatomic pathology services might shift towards lower-cost settings. For clinical laboratories, this trend further illustrates the need to prepare for more consumers paying cash for their medical services and seeking cost-effective, high-quality options.
Medical laboratories today struggle to submit clean claims and be promptly and adequately reimbursed as health insurers institute burdensome requirements and audit more labs
Across the nation, clinical laboratories and anatomic pathology groups of all sizes struggle to get payment for lab test claims. Veteran lab executives say they cannot remember any time in the past when medical laboratories were challenged on the front-end with getting lab test claims paid while also dealing on the back-end with ever-tougher audits and unprecedented recoupment demands.
These issues center upon the new policies adopted by the Medicare program and private health insurers that make it more difficult for many clinical laboratories to be in-network providers, to obtain favorable coverage guidelines for their tests, and to have the documentation requested when auditors show up to inspect lab test claims. This is true whether the audit is conducted by a Medicare Recovery Audit Contractor (RAC) or a team from a private health insurer.
Source of Financial Pressure on Medical Laboratories in US
Another source of financial pressure on medical laboratories in the United States today is the ongoing increase in the number of patients who have high-deductible health plans—whether from their employer or from the Affordable Care Act’s Health Insurance Marketplace (AKA, health exchanges). The individual and family annual deductibles for these plans typically start at around $5,000 and go to $10,000 or more. Many labs are experiencing big increases in patient bad debt because they don’t have the capability to collect payment from patients when they show up in patient service centers (PSCs) to provide specimens.
Some of these developments make it timely to ask the question: Is it a trend for payers to gang up on clinical laboratories and pathology groups and make it tougher for them to be paid for the lab tests they perform? Multiple factors can be identified to support this thesis.
“Is it a coincidence that, in recent years, so many payers are initiating numerous requirements that add complexity to how labs submit claims for lab tests and how they get paid?” asked Richard Faherty of RLF Consulting LLC. Faherty was formerly Executive Vice President, Administration, with BioReference Laboratories, Inc. “I can track four distinct developments that, collectively, mean that fewer lab claims get paid, expose clinical laboratories to extremely rigorous audits with larger recoupment demands, and heighten the risk of fraud and abuse allegations due to use of contract or third-party sales and marketing representatives who represent independent medical lab companies.”
Faherty described the first of his four developments as prior-authorization requirements for molecular and genetic tests. “Health insurers are reacting to the explosion in molecular and genetic testing—both in the number of unique assays that a doctor can order and the volume of orders for these often-expensive tests—by establishing stringent prior-authorization requirements,” he noted.
More Prior-Authorization Requirements for Molecular, Genetic Tests
“At the moment, many clinical lab companies and pathology groups are attempting to understand the prior-authorization programs established by Anthem (which became effective on July 1) and UnitedHealthcare (which became effective on November 1),” explained Faherty. “Just these two prior-authorization programs now cover as many as 80 million beneficiaries. There are plenty of complaints from physicians and lab companies because the systems payers require them to use are not well-designed and quite time-consuming.
“One consequence is that many lab executives complain that they are not getting paid for genetic tests because their client physicians are unable to get the necessary prior authorization—yet the lab decides to perform the test to support good patient care even though it knows it won’t be paid.”
Richard Faherty (left), CEO, RLF Consulting LLC, and formerly with Bio-Reference Laboratories, Inc., will moderate this critical webinar. Joining him will be Rina Wolf (center), Vice President, Commercialization Strategies, Consulting and Industry Affairs, XIFIN, Inc., and Karen S. Lovitch (right), JD, Practice Leader, Health Law Practice, Mintz Levin, PC, Washington, DC. The webinar takes place Wednesday, December 6, 2017, at 2 p.m. EST; 1 p.m. CST; 12 p.m. MST; 11 a.m. PST. Click here to register. (Photo copyright: Dark Intelligence Group.)
Payers Checking on How Clinical Laboratories Bill, Collect from Patients
Faherty’s second trend involves how medical lab companies are billing and collecting the amounts due from patients. “Most payers now pay close attention to how clinical laboratories bill patients for co-pays, deductibles, and other out-of-pocket amounts that are required by the patients’ health plans,” he commented. “Labs struggle with this for two reasons.
“One reason is the fact that tens of millions of Americans currently have high-deductible health insurance plans,” said Faherty. “In these cases, medical laboratories often must collect 100% of the cost of lab testing directly from the patients. The second reason is the failure of many independent lab companies to properly and diligently balance-bill their patients. This puts these labs at risk of multiple fraud and abuse issues.”
Many Medical Lab Companies Undergoing More Rigorous Audits by Payers
Faherty considers trend number three to be payers’ expanding use of rigorous audits of lab test claims. “In the past, it was relatively uncommon for a clinical lab company or pathology group to undergo audits of their lab test claims,” he observed. “That has changed in a dramatic way. Today, the Medicare program has increased the number of private auditors that visit labs to inspect lab test claims. At the same time, private health insurers are ramping up the number and intensity of the audits they conduct of lab test claims and substantially increasing their demands for recoupment without audit.
“One consequence of these audits is that medical laboratories are being hit with substantial claims for recoupment,” noted Faherty. “I am aware of multiple genetic testing companies that have been hit with a Medicare recoupment amount equal to two or three years of the lab’s annual revenue. Some have filed bankruptcy because the appeals process can take three to four years.”
Are Contract Lab Sales Reps More Likely to Offer Physicians Inducements?
Faherty’s fourth significant trend involves the greater use of independent contractors that handle lab test sales and marketing for clinical lab companies. “This trend affects both labs that use third-party lab sales reps and labs that don’t,” he said. “Labs that use contract sales and marketing representatives do not have direct control over the sales practices of these contractors. There is ample evidence that some independent lab sales contractors are willing to pay inducements to physicians in exchange for their lab test referrals.
“This is a problem in two dimensions,” noted Faherty. “On one hand, clinical lab companies that use third-party sales contractors don’t have full control over the marketing practices of these sales representatives. Yet, if federal and state prosecutors can show violations of anti-kickback and self-referral laws, then the lab company is equally liable. In certain cases, government attorneys have even gone after executives on a personal basis.
“On the other hand, I am hearing lab executives complain now that a substantial number of office-based physicians are so used to various forms of inducement offered by third-party sales representatives that the lab’s in-house sales force cannot convince those physicians to use their lab company without a comparable inducement. If true, this is a fundamental shift in the competitive market for lab testing services and it puts labs unwilling to pay similar inducements to physicians at a disadvantage.”
These four trends describe the challenges faced by every clinical laboratory, hospital laboratory outreach program, and pathology group when attempting to provide lab testing services to office-based physicians in a fully-compliant manner and be paid adequately and on time by health insurers.
Why Some Labs Continue to Be Successful and What They Can Teach You
These four trends may also explain why many medical lab companies are dealing with falling revenue and encountering financial difficulty. However, there continue to be independent lab companies that have consistent success with their coding, billing, and collections effort. These labs put extra effort into aligning their business practices with the requirements of the Medicare program and private health insurers.
Three esteemed experts in the field will provide you with the inside scoop on the best responses and actions your clinical lab and pathology group can take to address these major changes and unwelcome developments. Presenting will be:
· Moderating will be Richard Faherty of RLF Consulting LLC, and formerly with Bio-Reference Laboratories, Inc.
Special Webinar with Insights on How Your Lab Can Collect the Money It’s Due
To register for the webinar and see details about the topics to be discussed, use this link (or copy and paste this URL into your browser: http://pathologywebinars.com/how-to-prepare-your-lab-for-2018-essential-insights-into-new-payer-challenges-with-lab-audits-patient-billing-out-of-network-claims-and-heightened-scrutiny-of-lab-sales-practices/).
This is an essential webinar for any pathologist or lab manager wanting to improve collected revenue from lab test claims and to improve lab compliance. During the webinar, any single idea or action your lab can take away could result in increasing collected revenue by tens of thousands even hundreds of thousands of dollars. That makes this webinar the smartest investment you can make for your lab’s legal and billing/collection teams.
Sonora Quest Labs and Incyte Diagnostics streamline operations, eliminate data silos, and increase efficiencies using real-time analytics from laboratory-specific CRM
Across the nation, clinical laboratories and anatomic pathologists face two common challenges. One is shrinking lab budgets and less payment for lab tests. The other is the need to maintain physician and patient services at a high level. Both factors are fueling greater interest in lab and healthcare-specific customer relationship management (CRM).
Stated another way, labs and pathology groups are being squeezed by the need to operate on less revenue, while also increasing their quality of customer service to retain existing clients and expand market share. CRMs are a proven way to achieve and sustain superior levels of customer service in a surprisingly cost-effective way. In fact, many labs that implement a CRM find that the return on investment comes swiftly, in just a few months.
Clinical Laboratories and Pathology Groups Hit by Declining Prices, Revenues
“The clinical lab industry is solidly in an era where payers are slashing the prices they pay for lab tests and hospitals—struggling with their own financial problems—are cutting their lab budgets,” observed Robert L. Michel, Editor-in-Chief of The Dark Report, “These factors are motivating lab administrators and pathologists to look for solutions that allow them to run their lab at less cost, while improving staff productivity and customer service.
“This is why first-mover and early-adopter medical labs saw the potential of real-time analytical middleware and lab-specific CRM solutions to help them meet the challenge of running their labs on less money, while simultaneously sustaining superior levels of customer service,” continued Michel. “Every lab manager knows that the path to improved profitability is blocked by poor workflows, time-consuming quality metrics processes, and disconnected sales and customer service teams.”
Innovative medical laboratory managers report that their investment in laboratory-specific CRM systems (also known as healthcare-specific CRM) suddenly gives them access to data that has been locked away within their legacy LIS and other software systems. By unlocking this data in real-time dashboards and reports, they gain competitive advantage in the lab testing marketplace. A healthcare-specific CRM makes it possible to monitor a wide range of activities, including:
Proactively tracking relations with client physicians;
Monitoring workflow and lab operations in real time; and
Gaining a comprehensive view of all sales and customer service activities at both the aggregate and provider levels.
Tracking Key Benchmarks, Productivity, and Accountability
Sonora Quest Laboratories (SQL) of Tempe, Ariz., a joint venture between Banner Health and Quest Diagnostics (NASDAQ:DGX), wanted to reduce the amount of time spent collating reports and performing manual calculations, as well as breaking down cumbersome data silos across the organization in order to streamline communication and collaboration.
Prior to activating a laboratory-specific CRM platform, employees at SQL spent five hours per day pulling key metrics and reports. To move forward with strategic initiatives, the company could not continue to “struggle with endless silos of data and information,” a case study on SQL’s challenges states.
CRM Designed for Medical Laboratories and Pathology Groups
To address these concerns, SQL turned to a laboratory-specific CRM that integrates existing silos and systems into a centralized interface through automated data capturing. The solution provides detailed, real-time dashboards with visibility across the organization. Graphs and charts enable users to:
Track their progress meeting turnaround time benchmarks;
Ensure their volume is level-loaded; and
Track by the hour how many tests are coming in and completed, the case study notes.
The hc1 customer-relationship management (CRM) dashboard (above) provides an easy-to-navigate interface for tracking multiple benchmarks and key workflows for clinical laboratories and healthcare providers. (Image copyright: hc1.)
“The first step was to integrate our LIS [laboratory information system], and our timekeeping, call center metrics, and bench scheduling tools, into the hc1 CRM solution we had installed,” stated Tamara Nelson, Lean Master Black Belt at SQL. “Once that was accomplished, we could build actionable reports to determine where to focus our process improvement efforts.
“Now we can look at high-level trends in lab productivity,” noted Nelson. “We can also drill down to look at every process in our lab by hour, shift, discipline, instrument, and employee to compare time periods and other factors.”
According to the case study about Sonora Quest Laboratories, after its activation of the healthcare CRM, SQL reduced time spent pulling daily performance reports from about five hours per day to just 45 minutes a day. This increased overall employee efficiency by 85%.
SQL’s use of the CRM now makes it possible to:
Provide real-time financial and operation trend analysis to key stakeholders;
Use live dashboard and reports to review and manage TAT (turn-around time) benchmarks, utilization, reimbursements, volume, and productivity;
Track employee productivity across departments to drive accountability; and
Broadcast reports to immediately notify key stakeholders of any risks, missed benchmarks, or red flags.
Better Way for Clinical Laboratories to Track Client Interactions
Another medical laboratory that benefitted from implementing a laboratory-specific CRM is Incyte Diagnostics of Spokane Valley, Washington. Founded in 1957 by pathologists, Incyte provides anatomic pathology services throughout the Pacific Northwest.
Incyte needed a way to consolidate data coming from the multiple systems used to manage its sales process and payer information. The different systems created a disconnect between departments and, as structured, could only deliver a few real-time insights into volume or revenue shifts, client account activity, marketing campaigns, or sales activities.
Having received 35,000 e-mails from his sales team during the previous two years, Incyte’s Chief Marketing Officer Nate Koenig knew he had to find a better way to track client interactions.
“We needed a better understanding of what was taking place within our clients’ hospitals. To grow, we had to improve. That’s where the CRM solution we selected proved invaluable,” stated Koenig in a case study detailing how Incyte found a solution to tedious workflows and disorganized information tracking.
After adopting a healthcare CRM, Incyte could:
Help sales reps gain more field time;
Centralize client information;
Track sales activities;
Properly store data; and
Gain access to real-time analytics.
Anatomic Pathology Lab Exceeded Production Goals and Customer Expectations
According to the case study, by eliminating data silos and streamlining sales operations Incyte was able to:
Exceed its sales growth goal in 2016 by 107%;
Retain 99.51% of current business;
Reduce the overall workload of the client services team 6.25%; and
Gain 32 additional days of field time for its 17 sales reps.
Both Sonora Quest Laboratories and Incyte, Inc., are examples of how innovative medical laboratories are using informatics to meet the challenges of declining revenue and the need to sustain a high level of customer service. In today’s connected world, those labs that are first to achieve useful integration of their LIS with a CRM will enjoy competitive advantage.
This essential resource demonstrates how a laboratory-specific CRM enables medical laboratories to not just survive, but to thrive in today’s healthcare environment, while providing added value to healthcare consumers and providers.
