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Clinical Laboratories and Pathology Groups

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News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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Federal EKRA Law Continues to Cause Uncertainty in Clinical Laboratory Sales Compliance

Healthcare attorneys advise medical laboratory leaders to ensure staff understand difference between EKRA and other federal fraud laws, such as the Anti-kickback Statute

More than four years have passed since Congress passed the law and yet the Eliminating Kickbacks in Recovery Act of 2018 (EKRA) continues to cause anxiety and confusion. In particular are the differences in the safe harbors between the federal Anti-Kickback Statute (AKS) and Stark Law versus EKRA. This creates uncertainty among clinical laboratory leaders as they try to understand how these disparate federal laws affect business referrals for medical testing.

According to a news alert from Tampa Bay, Florida-based law firm, Holland and Knight, “EKRA was enacted as part of comprehensive legislation designed to address the opioid crisis and fraudulent practices occurring in the sober home industry.” However, “In the four years since EKRA’s enactment, US Department of Justice (DOJ) enforcement actions have broadened EKRA’s scope beyond reducing fraud in the addiction treatment industry to include all clinical laboratory activities, including COVID-19 testing.”

It is important that medical laboratory leaders understand this law. New cases are showing up and it would be wise for clinical laboratory managers to review their EKRA/AKS/Stark Law compliance with their legal counsels.

David Gee

“Keeping in mind that [EKRA is] a criminal statute, clinical laboratories need to take steps to demonstrate that they’re not intending to break the law,” said attorney David Gee, a partner at Davis Wright Tremaine, in an exclusive interview with The Dark Report. “[Lab leaders should] think about what they can do to make their sales compensation program avoid the things the government has had such a problem with, even if they’re not sure exactly how to compensate under the language of EKRA or how they’re supposed to develop a useful incentive compensation plan when they can’t pay commissions.” David Gee will be speaking about laboratory regulations and compliance at the upcoming Executive War College in New Orleans on April 25-26, 2023. (Photo copyright: Davis Wright Tremaine.)

How Does EKRA Affect Clinical Laboratories?

The federal EKRA statute—originally enacted to address healthcare fraud in addiction treatment facilities—was “expansively drafted to also apply to clinical laboratories,” according to New York-based law firm, Epstein Becker and Green. As such, EKRA “applies to improper referrals for any ‘service,’ regardless of the payor. … public as well as private insurance plans, and even self-pay patients, fall within the reach of the statute.”

In “Revised Stark Law, Anti-Kickback Statute Rules Are Good News for Labs,” Dark Daily’s sister publication The Dark Report noted that EKRA creates criminal penalties for any individual who solicits or receives any remuneration for referring a patient to a recovery home, clinical treatment facility, or clinical laboratory, or who pays or offers any remuneration to induce a referral.

According to Epstein Becker and Green, EKRA:

  • Applies to clinical laboratories, not just toxicology labs.
  • Has relevance to all payers: Medicare, Medicaid, private insurance plans, and self-pay.
  • Is a criminal statute with “extreme penalties” such as 10 years in prison and $200,000 fine per occurrence.
  • Exceptions are not concurrent with AKS.
  • Areas being scrutinized include COVID-19 testing, toxicology, allergy, cardiac, and genetic tests.

“For many clinical laboratories, a single enforcement action could have a disastrous effect on their business. And unlike other healthcare fraud and abuse statutes, such as the AKA, exceptions are very limited,” Epstein Becker and Green legal experts noted.

“Therefore, a lab could potentially find itself protected under an AKS safe harbor and still potentially be in violation of EKRA,” they continued. “The US Department of Health and Human Services (HHS) and the DOJ have not provided any clarity regarding this statute (EKRA). Without this much needed guidance clinical laboratories have been left wondering what they need to do to avoid liability.”

EKRA versus AKS and Stark Law

HHS compared AKS and the Stark Law (but not EKRA) by noting on its website prohibition, penalties, exceptions, and applicable federal healthcare programs for each federal law: 

  • AKS has criminal fines of up to $25,000 per violation and up to a five-year prison term, as well as civil penalties.
  • The Stark Law has civil penalties only.
  • AKS prohibits anyone from “offering, paying, soliciting, or receiving anything of value to induce or reward referrals or generate federal healthcare program business.”
  • The Stark Law addresses referrals from physicians and prohibits the doctors “from referring Medicare patients for designated health services to an entity with which the physician has a financial relationship.”

EKRA is more restrictive than AKS, as it prohibits some compensation that AKS allows, healthcare attorney Emily Johnson of McDonald Hopkins in Chicago told The Dark Report.

“Specifically, AKS includes a safe harbor for bona fide employees that gives an employer wide discretion in how employees are paid, including permitting percentage-based compensation,” Johnson wrote in a Dark Daily Coding, Billing, and Collections Special Report, titled, “Getting Paid for COVID-19 Test Claims: What Every Clinical Lab Needs to Know to Maximize Collected Dollars.”  

EKRA Cases May Inform Clinical Laboratory Leaders

Recent enforcement actions may help lab leaders better understand EKRA’s reach. According to Holland and Knight:

  • Malena Lepetich of Belle Isle, Louisiana, owner and CEO of MedLogic LLC in Baton Rouge, was indicted in a $15 million healthcare fraud scheme for “allegedly offering to pay kickbacks for COVID-19 specimens and respiratory pathogen testing.”
  • In S-G Labs Hawaii, LLC v. Graves, a federal court concluded the laboratory recruiter’s contract “did not violate EKRA because the recruiter was not referring individual patients but rather marketing to doctors. According to the court, EKRA only prohibits percentage-based compensation to marketers based on direct patient referrals.”
  • In another federal case, United States v. Mark Schena, the court’s rule on prohibition of direct and indirect referrals of patients to clinical labs sent a strong signal “that EKRA most likely prohibits clinical laboratories from paying their marketers percentage-based compensation, regardless of whether the marketer targets doctors or prospective patients.”

What can medical laboratory leaders do to ensure compliance with the EKRA law?

In EKRA Compliance, Law and Regulations for 2023, Dallas law firm Oberheiden P.C., advised clinical laboratories (as well as recovery homes and clinical treatment facilities) to have EKRA policies and procedure in place, and to reach out to staff (employed and contracted) to build awareness of statute prohibitions and risks of non-compliance.

One other useful resource for clinical laboratory executives and pathologists with management oversight of their labs’ marketing and sales programs is the upcoming Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management. The conference takes place on April 25-26, 2023, at the Hyatt Regency in New Orleans. A panel of attorneys with deep experience in lab law and compliance will discuss issues associated with EKRA, the Anti-Kickback Statutes, and the Stark self-referral law. 

Donna Marie Pocius

Related Information:

The State of EKRA

Four Years After EKRA: Reminders for Clinical Laboratories

Revised Stark Law and AKS Rules Are Good News for Labs

Comparison of the Anti-Kickback Statute and Stark Law

Getting Paid for COVID-19 Test Claims: What Every Clinical Lab Needs to Know to Maximize Collected Dollars

EKRA Compliance, Law and Regulations for 2023

2023 Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management Announced for April 25-26

New Orleans will once again host the 28th annual gathering for clinical laboratory, pathology, and in vitro diagnostics (IVD) leaders

Clinical laboratory leaders keen on gaining a competitive edge amid a difficult business environment will want to attend the 28th Annual Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management, which returns to New Orleans on April 25-26, 2023.

The 2023 conference comes as clinical laboratories, diagnostics companies, and anatomic pathology practices wrestle with budgets that are strained by inflation, supply chain woes, and the faltering financial performance of parent hospitals and health systems. Meanwhile, lab hiring managers continue to face a severe staffing shortage of diagnostics employees.

For example, in “Medical Technologist Demand Exceeds Supply by Large Margin Across the United States as Clinical Laboratories Scramble to Stay Fully Staffed,” Dark Daily reported how medical technologists and clinical laboratory scientists are in particularly short supply and that some experts do not see this critical shortage waning anytime soon.

“The current twin trends of hospitals losing money and labs struggling to maintain adequate staffing is without parallel in my 30 years of covering the clinical laboratory, diagnostics, and pathology sectors,” said Robert Michel, Founder of the Executive War College and Editor-in-Chief at Dark Daily. “This is a perfect storm that threatens the ability of labs to sustain high-quality testing services in a financially-sustainable manner. At the 2023 Executive War College, we are going to help participants get through this predicament by giving them innovative insights and best-in-class expertise they can take back and implement in their clinical labs and pathology groups.”

“Super early bird” pricing for the 2023 Executive War College ends on Dec. 31.

Robert Michel

“Staffing and supply chain difficulties are not the only burdens facing clinical laboratories,” said Robert Michel (above), Founder of the Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management. “Equally stressful forces are altering how providers, payers, and healthcare consumers access medical laboratory testing and pay for those services.” (Photo copyright: The Dark Intelligence Group.)

Earning New Revenue Will Take Center Stage at 2023 Executive War College

The full agenda for the 2023 Executive War College has not yet been released, but attendees can expect to see keynote presentations and sessions devoted to pressing topics in the diagnostics and laboratory industries. Among them is how to best position the clinical lab as a growing revenue source.

“With financial pressures mounting, we intend to present cutting-edge advice from innovative clinical laboratories, diagnostics companies, and pathology practices about how they earn new revenue—whether that be through creating business opportunities in the community, uncovering new test reimbursements, or using technology to improve existing processes,” Michel explained.

Last spring’s gathering of the Executive War College featured 10 keynotes, 55 sessions, and three post-conference workshops. Participants at the upcoming 2023 Executive War College conference can expect a similar bonanza of educational and professional development options, as well as collaborative networking breaks, luncheons, and receptions.

“The chance to meet innovative peers from across the country, share lab-related challenges with them, and compare effective solutions makes the Executive War College a cost-effective investment for any laboratory administrator, executive, or business-minded pathologist,” Michel added.

Diagnostics Services Will Be Better Reflected at 2023 Conference

For the first time, the conference’s moniker directly reflects the diagnostic work associated with clinical laboratories and pathology groups.

“Long-time attendees will notice that we tweaked the Executive War College’s full title to emphasize ‘diagnostics.’ That term is an important addition,” Michel noted.

“In the recent past, ‘clinical laboratory’ and ‘anatomic pathology’ were terms that sufficiently described the profession of laboratory medicine,” he continued. “However, a subtle but significant change has occurred in recent years. The term ‘diagnostics’ has become a common description for medical testing, along with other diagnostic areas such as radiology and imaging.”

Keep an eye on the conference’s website, ExecutiveWarCollege.com, for updates about the upcoming program and to see the session topics and speakers as they are confirmed and announced.

“The Executive War College is the top gathering for lab leaders to learn from the profession’s best innovators and gain insights they will need to keep their laboratories at the cutting edge of clinical excellence in a financially sustainable manner,” Michel concluded.

Register today to ensure places for you and your management team at the 2023 Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management. Click here for early registration discounts.

Scott Wallask

Related Information:

Executive War College to Be Held April 25-26 in New Orleans

Medical Technologist Demand Exceeds Supply by Large Margin Across the United States as Clinical Laboratories Scramble to Stay Fully Staffed

Hospitals Will Lose Billions of Dollars in 2022

Clinical Laboratory and Pathology Leaders in Canada Gather to Assess New Diagnostic Technologies and Respond to the Acute Shortage of Medical Technologists

There was cautious optimism about the ability of Canada’s medical laboratories to innovate in ways that advance patient care, while recognizing the ongoing challenge of adequate lab staffing and budget constraints

TORONTO, ONTARIO, CANADA—This week, more than 150 leaders representing clinical laboratories, anatomic pathology labs, in vitro diagnostics (IVD) companies, and provincial health officials gathered for the first “Canadian Diagnostic Executive Forum” (CDEF) since 2019. It would be apt to say that the speakers objectively addressed all the good, the bad, and the ugly of Canada’s healthcare system and its utilization of medical laboratory testing services.

Over the two days of the conference, speakers and attendees alike concurred that the two biggest issues confronting clinical laboratories in Canada were inadequate staffing and an unpredictable supply chain. There also was agreement that the steady increase in prices, fueled by inflation, is exacerbating continuing cost increases in both lab salaries and lab supplies.

Canada’s Health System Has Several Unique Attributes

Canada’s healthcare system has two unique attributes that differentiate it from those of other nations. First, healthcare is mandated by a federal law, but generally each of Canada’s 13 provinces and territories operates its own health plan. Thus, the health system in each province and territory may cover a different mix of clinical services, therapeutic drugs, and medical procedures. The federal government typically pays 40% of a province’s health costs and the province funds the balance.

Second, it is a fact that 90% of the Canadian population lives within 150 miles of the United States border. Yet there are provinces with large populations that have geography that ranges from the US border to north of the Arctic Circle. These provinces have a major challenge to ensure equal access to healthcare regardless of where their citizens live.

During day one of the conference, several presentations addressed innovations that supported those labs’ efforts to deliver value and timely insights during the COVID-19 pandemic. For example, a lab team in Alberta launched a research study involving SARS-CoV-2 virus surveillance from the earliest days of the outbreak. This study was presented by Mathew Diggle, PhD, FRCPath, Associate Professor and Program Lead for the Public Health Laboratory (ProvLab) Medical-Scientific Staff at Alberta Precision Laboratories in Edmonton, Alberta. 

Study Designed to Identify Coinfections with COVID-19

While performing tens of thousands of COVID-19 tests from the onset of the pandemic, and identifying the emergence of variants, the ProvLab team also tracked co-infection involving other respiratory viruses.

“This is one of the largest eCoV [endemic coronavirus] studies performed during the COVID-19 pandemic,” Diggle said. “This broad testing approach helped to address a pivotal diagnostic gap amidst the emergence of a novel pathogen: cross-reactivity with other human coronaviruses that can cause similar clinical presentations. This broad surveillance enabled an investigation of cross-reactivity of a novel pathogen with other respiratory pathogens that can cause similar clinical presentations.

“Fewer than 0.01% of specimens tested positive for both SARS-CoV-2 and an eCoV,” he explained. “This suggested no significant cross-reactivity between SARS-CoV-2 and eCoVs on either test and provided a SARS-CoV-2 negative predictive value over 99% from an eCoV-positive specimen … The data we collected was highly compelling and the conclusion was that there was no coinfection.”

Kevin D. Orr

Chairing the two days of presentations at this weeks’ Canadian Diagnostic Executive Forum was Kevin D. Orr (above), Senior Director of Hospital Business at In-Common Laboratories. He also served on the program for this national conference serving clinical laboratories, anatomic pathology labs, and in vitro diagnostics (IVD) companies throughout Canada. This was the first gathering of this conference since 2019. Attendees were enthusiastic about the future of medical laboratory services in Canada, despite lab staffing shortages and rising costs due to inflation. (Photo copyright The Dark Report.)

Clinical Laboratory Regionalization in Quebec

One of Canada’s largest projects to regionalize and harmonize clinical laboratory services is proceeding in Quebec. Leading this effort is Ralph Dadoun, PhD, Project Director for OPTILAB Montreal, which is part of the Ministry of Health and Social Services in Quebec. The ambitious goal for this project is to move the 123 clinical laboratories within the province into 12 clusters. Initial planning was begun in 2013, so this project is in its ninth year of implementation.

During his presentation, Dadoun explained that the work underway in the 12 clusters involves creating common factors in these categories:

  • Uniform test names.
  • Common test codes, labels, test reporting format.
  • Common abbreviations.
  • Uniform quality indicators (e.g., nonconformities, specimen acceptability, etc.).
  • Implementation consistent with and respecting ISO-15189 criteria.

Another notable achievement in Quebec is the progress made to implement a common laboratory information system (LIS) within all 12 clusters. The first three laboratory clusters are undergoing their LIS conversions to the same platform during the next 180 days. The expectation is that use of a common LIS across all clinical laboratory sites in Quebec will unlock benefits in a wide spectrum of lab activities and work processes.

The 2022 CDEF featured speakers from most of the provinces. The common themes in these presentations were the shortage of lab personnel across all technical positions, disruptions in lab supplies, and the need to support the usual spectrum of lab testing services even as lab budgets are getting squeezed.

At the same time, there was plenty of optimism. Presentations involving adoption of digital pathology, advances in early disease detection made possible by new diagnostic technologies, and the expansion of precision medicine showed that clinical laboratories in Canada are gaining tools that will allow them to contribute to better patient care while helping reduce the downstream costs of care.

The Canadian Diagnostics Executive Forum is organized by a team from In-Common Laboratories in North York, Toronto, Ontario. Founded in 1967, it is a private, not-for-profit company that works with public hospitals and laboratory medicine providers. Information about CDEF can be found at its website, where several of this year’s presentations will be available for viewing.

Robert L. Michel 

Related Information:

Canadian Diagnostic Executive Forum 2022

Broad Respiratory Testing to Identify SARS-Cov-2 Viral Co-Circulation and Inform Diagnostic Stewardship in the COVID-19 Pandemic

Canadian Diagnostics Executive Forum Will Provide Firsthand Insights into How Clinical Laboratories Can Leverage Technology and Innovation to ‘Do More with Less’

Proven Approaches to Clinical Laboratory Cost-Cutting and Effective Staff Recruitment/Retention to Be Shared at New Workshops in Chicago and Miami

Answers and effective solutions to the lab profession’s most urgent challenges will be front and center at the innovative ‘Lab Management Essentials Workshop’

Three powerful forces are slamming clinical laboratories today. One is the urgent need to cut costs. Second is the struggle to achieve and maintain full lab staffing. Third is the pressure to increase revenue and expand market share.

All of this is happening even as hospitals and health systems must deal with almost identical issues. Cost-cutting, recruiting more staff, and finding ways to increase revenue dominate the thoughts and actions of senior health administrators.

Most Hospitals and Health Systems Report Substantial Financial Losses

News reports about the financial losses at hospitals and health systems tell the story. For example, one report in Becker’s Healthcare described the financial damage at three major, multi-state health systems:

  • AdventHealth, a 48-hospital health system, reported a $417.7 million net loss in the first quarter of 2022. It reported that, because of inflation, costs had increased by 15% over prior year.
  • Kaiser Permanente, with 12.6 million members in seven regions of the United States, reported a net loss of $961 million in the first quarter of 2022. One major factor in these losses was the increase in expenses, which was 9.5%. For second quarter 2022, Kaiser Permanente showed a loss of $1.3 billion, most of that from a decline in the value of its investment portfolio.
  • Ascension Health, with 143 hospitals in 19 states, reported a net loss of $884.7 million in first quarter of 2022. It said its costs increased by 10.6% over the same period last year.

Most hospital-based clinical laboratory managers and pathologist are aware of these staggering financial losses. They also are watching how the shortage of nurses and other skilled personnel has hospitals scrambling to close that gap by paying more overtime, using temporary nurses who are paid at much higher rates, and increasing nurse salaries to prevent existing staff nurses from taking more lucrative offers from other hospitals in the community.

Clinical Laboratories Under Pressure to Cut Costs and Maintain Adequate Staff Levels

Hospital-based laboratories are on the frontline of these hurricane forces. Facing operating losses, hospitals ask their laboratories and other clinical service lines to cut costs below authorized budgets. Meanwhile, the labs themselves must deal with their own shortage of medical technologists (MTs) and clinical laboratory scientists (CLSs)—along with other skilled positions—that are required to provide the full menu of lab testing services.

This “perfect storm” of pressures to cut costs, keep staffing at authorized levels, and generate more revenue (that can offset rising costs of lab supplies and the higher salaries being paid to MTs and CLSs) is without precedent in the past four decades. To provide lab managers with the knowledge to resolve these challenges swiftly and confidently in their own laboratories, the team behind the Executive War College assembled experts to conduct a one-and-a-half-day interactive workshop.

The workshop is titled, Lab Management Essentials Workshop to Effectively Cut Costs, Improve Staff Hiring and Retention, and Generate More New Revenue. The first of these workshops will occur in Chicago on Oct. 20-21. The same instruction will be provided in a workshop in Miami on Nov. 10-11. By design, lab managers will learn in small settings that ensure personal interaction with the experts in lab cost cutting; staff recruiting, hiring, and retention; and generating more lab revenue.

Using Lab Case Studies to Teach Proven Solutions for Reducing Expenses

Each of the three important topics will be addressed in half-day learning modules. Following case study presentations on best practices, attendees at Lab Management Essentials will break out into smaller roundtable groups facilitated by lab industry experts. The groups will brainstorm how to apply these proven methods to cut costs, retain employees, and create revenue. They will then describe their findings to all participants.

Lab Management Essentials Workshop facilitators (clockwise from top left): Tafney Gunderson, Carlton Burgess, Dorothy Martin, Rick VanNess, Jane Hermansen, and Kim Zunker.

On the morning of day one, leaders of the lab cost-cutting module will be:

  • Carlton Burgess, Vice President of Laboratory Services at Prime Healthcare in Ontario, Calif.
  • Tafney Gunderson, Quality Systems Supervisor at Avera McKennan Laboratory in Sioux Falls, S.D.

On the afternoon of day one, leaders of the lab staff recruiting, hiring, and retention module will be:

  • Dorothy Martin, Regional Laboratory Manager at Dartmouth-Hitchcock Health in Lebanon, N.H.
  • Kim Zunker, MBA, MLS(ASCP), CAPM, Consulting Manager at Accumen in Scottsdale, Ariz.

On the morning of day two, leaders of the lab staff recruiting, hiring, and retention module will be:

  • Jane Hermansen, MBA, MT(ASCP), Manager of Outreach and Network Development at Mayo Clinic in Rochester, Minn.
  • Rick VanNess, Director of Product Management at Rhodes Group and TriCore Reference Laboratories in Albuquerque, N.M.

Delivering Essential Knowledge to Up-and-Coming Laboratory Managers

This Lab Management Essentials workshop is a first for the clinical laboratory profession. It brings together experienced, effective lab leaders to teach, guide, and coach your lab’s smartest up-and-coming lab managers. It accomplishes this in just one-and-a-half days, to minimize the time they are away from your lab.

To gain maximum benefits from this well-designed program, it is recommended that you send three or four of your front-line lab managers. Together, they will hear and learn at the same time, while working during the intimate sessions to identify the techniques and methods that will work best for your lab. This is important because, upon their return, they will have both enthusiasm and the knowledge to light the right fires under your lab staff and energize them into quickly deploying ways to slash expenses, attract top candidates to fill open positions, and even to tap new sources of revenue—all of which they learned during Lab Management Essentials.

Because the number of attendees to each workshop is limited, you are encouraged to click here to register yourself and your designated lab managers today.

—Robert Michel

Related Information:

Lab Workshop Solutions to Staffing, Cost Cutting, and Revenue Problems

Efficient Data Structure Can Bring in More Reimbursement Dollars and Allow Clinical Laboratories to Sell Aggregated Information

Theranos Whistleblower Tyler Shultz Publicly Denounces LDT ‘Loophole’ that the Disgraced Blood-testing Company Exploited

Shultz and fellow whistleblower Erika Cheung spoke to clinical laboratory scientists and attendees at the AACC Annual Scientific Meeting in Chicago

Two whistleblowers who raised concerns about the accuracy of Theranos’ blood test results offered thought-provoking comments on how the maligned company operated within current requirements for clinical laboratory-developed tests (LDTs) during last week’s American Association of Clinical Chemistry (AACC) Annual Scientific Meeting.

“The laboratory-developed test loophole that Theranos exploited should be closed,” said Tyler Shultz, who complained about Theranos’ inaccurate testing to regulators and The Wall Street Journal. Both Shultz and fellow Theranos whistleblower Erika Cheung were former employees at the now-defunct company.

“There are a lot of good use cases for LDTs, so they shouldn’t all be shut down,” Shultz continued. “But in general, I do think that if FDA-cleared clinical laboratory tests are available, those tests should be used instead of a homebrew test that hasn’t been held to the same standard that an FDA-cleared product has.”

In July, a jury found former Theranos President and Chief Operating Officer Ramesh “Sunny” Balwani guilty of 12 counts of wire fraud and conspiracy to commit wire fraud, which Dark Daily covered in “Tale of Two Trials: Unlike Ex-Theranos CEO Elizabeth Holmes, COO/President Ramesh ‘Sunny’ Balwani Found Guilty of All Charges.”

In January, Theranos’ founder and former CEO, Elizabeth Holmes, also was convicted on four counts of fraud, which we covered in “Theranos Ex-CEO Elizabeth Holmes Convicted on Three Counts of Wire Fraud and One Count of Conspiracy to Commit Fraud after Seven Days of Jury Deliberations.”

Balwani and Holmes are now awaiting sentencing.

Both trials examined the dubious claims that Theranos’ technology worked properly during the company’s blazing ascent with both Silicon Valley investors and the media from 2003 to 2014. The company said it could take a few drops of blood from a patient and successfully analyze the specimen using a machine called Edison, although Shultz, Cheung, and others questioned the results.

By 2015, problems with Theranos’ testing began to go public. The company shut down in 2018 after Holmes and Balwani were indicted.

Congress Debates New LDT Regulation

A laboratory-developed test (LDT) is an in vitro proprietary diagnostic test developed and performed by an individual clinical laboratory often to address unmet clinical needs.

Currently, LDTs are regulated under the Clinical Laboratory Improvement Amendments (CLIA) of 1988, and CLIA is administered by the Centers for Medicare and Medicaid Services (CMS).

However, proposed legislation is before Congress that would transfer oversight of LDTs to the US Food and Drug Administration (FDA). The bill, known as the Verifying Accurate Leading-edge IVCT Development (VALID) Act, is now embedded in the larger Senate bill FDA Safety and Landmark Advancements Act of 2022 (S.4348).

Theranos’ saga did provide at least some inspiration for legislators filing the VALID Act. However, Cheung noted that trying to regulate all LDTs based the bad behavior of Theranos’ executives is a complex issue.

“Regulation is always tricky,” she said. “When you take an example of a very extraordinary case and a very specific circumstance [such as Theranos] and try to generalize that in terms of what is the behavior of all labs, you have to be careful.”

Proponents state FDA pre-market approval is needed for in vitro diagnostic tests because they are like medical devices. Opponents counter that the VALID Act would stifle innovation because of the costs involved with FDA review, particularly at academic medical laboratories.

Readers of The Dark Report, a sister publication to Dark Daily, learned recently that a group of nearly 300 pathologists and clinical laboratory directors had asked lawmakers to revise the VALID Act or exempt academic medical labs from it. (If you don’t subscribe to The Dark Report, try our free trial.)

Would FDA Review Have Stopped Theranos Earlier?

Cheung questioned whether FDA review of Theranos’ technology would have averted patient and investor fraud by Holmes and Balwani.

“Would it have been the case that if it was necessary for the FDA to review Theranos’ LDTs, that it could have stopped it? Maybe,” Cheung told AACC attendees. “But you’re also dealing with a company that lied a lot. There were lots of things that Theranos had to submit to CLIA or to CMS in order to say that they were able to test certain types of patients.”

Shultz had similar feelings regarding a hypothetical FDA review of Theranos’ product, which will ring true with pathologists and clinical laboratory professionals who understand medical laboratory compliance and how the FDA regulate diagnostic instruments and kits.

“When you bring something to the FDA, they look at the data. They don’t go in and actually do third-party validation to see if your device works,” he said. “They just look at the data, and the [Theranos] data was largely manipulated. So, if you forced Theranos to go through the FDA process, I’m not sure if it would have prevented [the fraud].”

—Scott Wallask

Related Information:

CLIA Regulations

FDA Wants to Close Regulatory Loophole That Theranos Used

Theranos Whistleblower Tyler Shultz Celebrates Former CEO Elizabeth Holmes’ Guilty Verdict by Popping Champagne with Family Members

Former Theranos Lab Director and Staff Testify in Ongoing Elizabeth Holmes Fraud Trial That They Voiced Concerns about Reliability and Accuracy of Edison Blood-Testing Device

Millennial Clinical Laboratory Managers Went Digital with Their Networking at Last Week’s Executive War College

With Millennials soon to make up the majority of the medical laboratory workforce, it’s only natural that digital networking is gaining momentum at events like the Executive War College

Attendees at last week’s Executive War College Conference on Laboratory and Pathology Management in New Orleans will tell you that the mobile app used by participants was on fire.

At any hour during the in-person event in New Orleans, attendees scheduled meetups, participants asked questions to conference organizers, and users discussed important clinical laboratory and anatomic pathology topics. All of those interactions occurred within the Whova meeting application, which served as the Executive War College’s virtual guide.

In many ways, widespread use of the meeting app reflects a younger crowd that lives life on mobile phones. It’s not all that different than the changing face of the clinical lab industry as laboratory veterans retire and new faces come in, said Robert Michel, Founder of the Executive War College (EWC) and Editor-in-Chief of Dark Daily’s sister publication The Dark Report.

“It’s clear from the soaring use of our conference’s meeting app at the Executive War College that a younger generation is changing how business is conducted during and after a lab industry conference,” he observed. “Generation X and Millennials are steadily influencing how people network at live events.”

Michel noted during his keynote at the conference that Millennials will make up 75% of the hospital lab and pathology workforce by 2025, so their digital habits will become the norm at in-person events.

Robert Michel
“It is remarkable that, among the 900 attendees at this year’s event, there were more than 750,000 impressions involving the sponsors and companies supporting this year’s conference,” said Robert Michel (above), Editor-in-Chief of Dark Daily and Founder of the Executive War College. “It shows that these attendees are serious about identifying solutions and vendors who can help them solve the various pain points in their laboratories.” (Photo copyright: Dark Intelligence Group.)

88% of Attendees at Executive War College Used the Event App

Usage numbers aggregated during the EWC conference of people who downloaded and used the meeting app speak for themselves:

  • A large majority of attendees (88%) downloaded the app.
  • Users sent 11,398 messages in the app.
  • There were 136 community board discussions posted.
  • Users created 80 meetups, with 677 people attending those gatherings.
  • There were 764,745 sponsor impressions in the app (in other words, clicks on a sponsor link or attendees navigating to sponsor material).

What the numbers don’t convey is that the conference’s meeting app was also fun to use!

“We love the app,” said Melissa Butterworth, co-founder, Managing Director and President of Advanced Strategic Partners, in a Whova discussion group.   

Butterworth spoke during a special session at the Executive War College. She also took the No. 1 spot on the meeting app’s leaderboard for the event, collecting an impressive 225,900 points. Users gained points for the leaderboard based on activities they completed in the app.

Spirited competition ensued among the leaderboard’s top users, who jockeyed for position as the conference progressed. Plenty of off-topic conversations took place in the app as well, as attendees helped each other navigate New Orleans with tips about restaurants, local cemetery tours, or where to work out.

The leaderboard on the Whova meeting application
The leaderboard on the Whova meeting application (above) at the conclusion of this year’s Executive War College on Laboratory and Pathology Management showed the top point gainers. (Photo copyright: Dark Intelligence Group.)

Clinical Laboratory Sponsors Reached Out to Attendees in New Ways

For sponsors and other vendors visiting the conference, the meeting app provided a different avenue to approach attendees beyond the typical networking that takes place during breaks, cocktail receptions, luncheons, and off-site parties.

For example, some sponsors shared white papers or YouTube videos via the app’s community boards or asked questions about topics of interest. Additionally, sponsors could respond directly to queries from attendees.

“At the Executive War College, there was clearly a sustained exchange between vendors looking to engage business development opportunities and participants who have pain points that need to be addressed and are looking for solutions,” Michel said.

The next Executive War College will return to New Orleans on April 25-26, 2023. Click on this link to access early registration discounts.

Scott Wallask

Related Information:

Keynote Speakers at the Executive War College Describe the Divergent Paths of Clinical Laboratory Testing

COVID-19 Testing Reimbursement Scrutiny is Coming for Clinical Laboratories, Attorneys Predict at Executive War College

Artificial Intelligence in Digital Pathology Developments Lean Toward Practical Tools

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