What is not clear is how Aetna might engage independent clinical laboratories as in-network providers for this health insurance plan
For years, Dark Daily and its sister publication The Dark Report have regularly predicted that the traditional fee-for-service reimbursement model of indemnity health insurance that requires beneficiaries to pay a co-pay is on the way out. What is not known is how the nation’s biggest health insurers plan to reinvent themselves, as value-based reimbursement for providers becomes more common.
That may be clearer now, at least for one insurance giant. Aetna recently announced it was incorporating CVS Health services provided at CVS-owned pharmacies and retail clinics into a healthcare plan for individuals in the greater Kansas City, Mo., area.
The Aetna Connected Plan “combines CVS Health services—including free one to two-day prescription delivery and 20% discounts on thousands of health-related items—with Aetna’s cost-saving I-35 Performance Network to deliver a more convenient and connected member experience, along with up to 20% premium savings compared to comparable PPO products in the market,” states a CVS Health press release.
Members can schedule appointments at CVS Health MinuteClinics, request consultations at CVS HealthHUBs for no copay, and access other services, including telehealth visits, through CVS pharmacies. Essentially, Aetna made network providers for this range of CVS-owned health services.
CVS Health services, according to the press release, include:
$0 copay at local HealthHUB and MinuteClinic locations,
Free one to two-day prescription delivery,
20% discounts on thousands of health-related items in-store and online,
The Aetna health plan will be made available next year to employers with 101 or more workers in three counties in Missouri (Clay, Jackson, and Platte) and two counties in Kansas (Johnson and Wyandotte). Aetna claims the premiums for their new plan are 20% less expensive than other similar plans for the region, MedCity News reported.
AMA Expressed Concerns over CVS Purchase of Aetna
CVS acquired Aetna for $70 billion in late 2018 and the two companies have been working to integrate their businesses ever since.
There are currently more than 1,000 CVS MinuteClinics located throughout 33 states and the District of Columbia. CVS began opening HealthHUB clinics in the Houston area last year and plans to open more than 1,500 HealthHUBs by the end of 2021, the Houston Chronicle reported.
Critics of the 2018 purchase of Aetna by CVS were concerned that CVS would somehow use Aetna’s 40 million members to drive revenue for its stores. Many groups, including the American Medical Association (AMA), Consumers Union, and pharmacy organizations were opposed to the merger due to anticompetitive concerns.
The AMA felt the merger would reduce competition in some pharmaceutical markets, which could lead to higher premiums and lower the quality of some insurance products. The organization also believed that the merger “faced enormous implementation challenges and was unlikely to realize efficiencies that benefit patients,” the AMA noted in a statement.
“We are very concerned about the consolidation in healthcare because we know that as healthcare systems consolidate, prices tend to go up,” AMA President Barbara McAneny, MD said in the statement. “And we are very concerned that with the CVS purchase of Aetna that drug prices will continue to rise and that is a major pain point of patients all across the country.”
The AMA also stressed concerns regarding how the lack of competition could have negative impacts on the pharmaceutical industry.
“It’s also causing harm to a lot of the parts of the industry,” McAneny added. “Independent pharmacies are going out of business and this consolidation makes them (CVS) just such a stronger player in that market that competition is really difficult.”
Despite the opposition, the CVS and Aetna merger received final approved from regulators last year. Before the merger was approved, the two companies had to convince state attorneys general, antitrust regulators, and Congress that the consolidation would not result in anticompetitive practices and impair independent drugstores and other national chains.
Will Aetna Engage Independent Clinical Laboratories?
Aetna’s new health plan is another example of how the nation’s biggest health insurers are adapting away from fee-for-service and to value-based reimbursement for healthcare providers. Clinical laboratory managers will want to watch how CVS and Aetna do or do not work with independent laboratory companies to collect lab specimens at the pharmacies and provide testing.
Media reporting on disparities in COVID-19 test billing sparks renewed calls for increased transparency in medical laboratory test charges
Recent media reports of massive disparities in the prices charged for COVID-19 lab tests throughout the United States have citizens and law makers alike again calling for increased transparency in clinical laboratory test charges.
On July 16, the NYT reported that GDL, “has run some of the most expensive coronavirus tests in America.” In addition, the paper reported that health insurance companies have paid GDL $2,315 for individual COVID-19 tests, but that in “a couple of cases,” the price rose to $6,946. However, that higher amount resulted “when the lab said it mistakenly charged patients three times the base rate.”
In response to the NYT report, GDL released a statement that said, “In April 2020, a commercial insurer doing business with Gibson Diagnostic Labs inquired about the company’s pricing practices regarding COVID-19 testing. In response to the inquiry, the company conducted an internal review and identified commercial claims that were billed incorrectly by the company’s third-party biller. Because this incident did not meet our standards of quality, service, and compliance, the company terminated its relationship with the third-party biller.”
GDL Blames Third-party Biller for Errors
Responding to questions from Dark Daily, GDL provided details that were not previously reported. In an email, GDL said it worked closely with a NYT reporter by providing information about the incident, but that the reporter left out key information.
GDL also said that after the NYT’s inquiry, the lab reviewed its billing systems and learned that the CPT code for 23 COVID-19 commercial claims were transposed as a result of human error, resulting in payments totaling $53,255. The review also showed that the lab’s third-party biller had insufficient systems in place to prevent such errors.
“Upon learning this, we made the decision to terminate our contract with our third-party biller,” GDL said. “Finally, within 24-hours of identifying the billing error—and prior to the story being published—we rebilled all the claims, refunded payments to the respective payers, and followed up with each payer to ensure receipt of the corrected claims.
“Immediately after the claims were rebilled, we contacted all 205 patients who may have received an incorrect EOB [explanation of benefits], explained what happened, and apologized,” GDL stated.
Going forward, GDL said it will require its new biller to conduct regular audits each quarter and to maintain certain levels of automation and staffing to manage higher volume without disruption. GDL also said it regrets the disruption and inconvenience the billing error caused to its clients and patients.
Lessons for Clinical Laboratories
For clinical laboratories, there are at least four lessons that can be learned from GDL’s experience:
First, labs should be aware of how their own charges for all tests compare with what other labs charge, particularly when charging patients for high-profile tests, such as those for the new coronavirus. What Medicare and other payers charge for these tests has been reported widely, so that many patients are likely aware of the reasonable and customary charges for such tests.
Second, clinical labs may want to note that charging high prices for these tests could lead health insurers to increase their scrutiny of lab charges. The NYT article quoted Angela Meoli, a senior vice president at Aetna, saying, “We’ve seen a small number of laboratories that are charging egregious prices for COVID-19 tests.”
Third, coverage in the NYT often leads other publications to cover the same story. In this case, Kaiser Health News (KHN) and other news organizations have reported on what GDL charged and linked that story to their coverage of surprise medical bills.
Fourth, GDL recommends responding appropriately to journalists’ inquiries. However, lab should be aware that, even then, the news media may not report the facts as labs would prefer.
All of these lessons are important during the COVID-19 pandemic, because newspapers and other news organizations have encouraged consumers to submit copies of their lab tests and other bills. Such examples of charges above normal rates often generate unwanted coverage for hospitals, health systems, healthcare providers, and in this case, a clinical diagnostic laboratory.
All of this may be academic for those clinical laboratory managers and pathologists who scrupulously follow appropriate laws and guidelines for coding, billing, and collecting for clinical lab tests of all types—not just the COVID-19 test. But, year after year, there are individuals who operate certain clinical laboratories and who are willing to push their compliance with long-established laws and regulations for short-term profit. When these abusive lab practices surface and attract the attention of both federal prosecutors and national news media, it is the entire clinical laboratory profession that gets characterized in negative ways.
Certainly, many medical laboratory professionals would agree that the system of enforcing federal and state laws and pursuing obvious cases of fraudulent practices involving clinical lab testing leaves much to be desired. However, there are already several examples of federal prosecutors charging lab owners and managers for violating fraud and anti-kickback statutes in their marketing of COVID-19 tests. Hopefully the national news media will be effective in spotting illegal practices involving COVID-19 testing and bring more transparency to the lab testing marketplace.
Following the raid, the company’s co-founders resigned
from the board of directors
Microbiome testing company, uBiome, a biotechnology developer that offers at-home direct-to-consumer (DTC) test kits to health-conscious individuals who wish to learn more about the bacteria in their gut, or who want to have their microbiome genetically sequenced, has recently come under investigation by insurance companies and state regulators that are looking into the company’s business practices.
reported that the Federal Bureau of
Investigation (FBI) raided the company’s San Francisco headquarters in
April following allegations of insurance fraud and questionable billing
practices. The alleged offenses, according to CNBC, included claims that
uBiome routinely billed patients for tests multiple times without consent.
Hospital Review wrote that, “Billing documents obtained by The Wall Street
Journal and described in a June 24 report further illustrate uBiome’s
allegedly improper billing and prescribing practices. For example, the
documents reportedly show that the startup would bill insurers for a lab test
of 12 to 25 gastrointestinal pathogens, despite the fact that its tests only
included information for about five pathogens.”
Company Insider Allegations Trigger FBI Raid
In its article, CNBC stated that “company insiders”
alleged it was “common practice” for uBiome to bill patients’ insurance
companies multiple times for the same test.
“The company also pressured its doctors to approve tests
with minimal oversight, according to insiders and internal documents seen by CNBC.
The practices were in service of an aggressive growth plan that focused on
increasing the number of billable tests served,” CNBC wrote.
FierceBiotech reported that, “According to previous
reports, the large insurers Anthem, Aetna, and Regence BlueCross BlueShield
have been examining the company’s billing practices for its physician-ordered
tests—as has the California Department of Insurance—with probes focusing on
possible financial connections between uBiome and the doctors ordering the
tests, as well as rumors of double-billing for tests using the same sample.”
Becker’s Hospital Review revealed that when the FBI
raided uBiome they seized employee computers. And that, following the raid,
uBiome had announced it would temporarily suspend clinical operations and not
release reports, process samples, or bill health insurance for their services.
The company also announced layoffs and that it would stop
selling SmartJane and SmartGut test kits, Becker’s reported.
uBiome Assumes New Leadership
Following the FBI raid, uBiome placed its co-founders Jessica
Richman (CEO) and Zac
Apte (CTO) on administrative leave while conducting an internal
investigation (both have since resigned from the company’s board of directors).
The company’s board of directors then named general counsel, John Rakow, to be interim CEO,
After serving two months as the interim CEO, Rakow resigned
from the position. The interim leadership of uBiome was then handed over to
three directors from Goldin
Associates, a New York City-based consulting firm, FierceBiotech
reported. They include:
SmartFlu: a nasal microbiome swab that detects bacteria and viruses associated with the flu, the common cold, and bacterial infections.
What Went Wrong?
Richman and Apte founded uBiome in 2012 with the intent of
marketing a new test that would prove a link between peoples’ microbiome and their
overall health. The two founders initially raised more than $100 million from
venture capitalists, and, according to PitchBook,
uBiome was last valued at around $600 million, Forbes
Nevertheless, as a company, uBiome’s future is uncertain. Of
greater concern to clinical laboratory leaders is whether at-home microbiology
self-test kits will become a viable, safe alternative to tests traditionally performed
by qualified personnel in controlled laboratory environments.
“Pathologists and medical laboratories may have to demonstrate efficiency and effectiveness to stay in the insurer’s networks and get paid for their services
In recent years, Medicare officials have regularly introduced new care models that include quality metrics for providers involved in a patient’s treatment. Now comes news that a national health insurer is launching an innovative cancer-care model that includes quality metrics for medical laboratories and anatomic pathology groups that deliver diagnostic services to patients covered by this program.
Anatomic pathologists and clinical laboratories know that cancer patients engage with many aspects of healthcare. And that, once diagnoses are made, the continuum of cancer care for these patients can be lengthy, uncomfortable, and quite costly. Thus, it will be no surprise that health insurers are looking for ways to lower their costs while also improving the experience and outcomes of care for their customers.
To help coordinate care for cancer patients while simultaneously addressing costs, Humana, Inc., (NYSE:HUM) has started a national Oncology Model-of-Care (OMOC) program for its Medicare Advantage and commercial members who are being treated for cancer, Humana announced in a press release.
What’s important for anatomic pathologists and clinical
laboratories to know is that the program involves collecting performance
metrics from providers and ancillary services, such as clinical laboratory,
pathology, and radiology. These metrics will determine not only if doctors and
ancillary service providers can participate in Humana’s networks, but also if
and how much they get paid.
Anatomic pathologists and medical laboratory leaders will want to study Humana’s OMOC program carefully. It furthers Humana’s adoption of value-based care over a fee-for-service payment system.
How Humana’s OMOC Program Works
According to Modern Healthcare, “Humana will be looking at several measures to determine quality of cancer care at the practices including inpatient admissions, emergency room visits, medications ordered, and education provided to patients on their illness and treatment.”
As Humana initiates the program with the first batch of
oncologists and medical practices across the US, it also will test performance criteria
that anatomic pathologist groups will need to meet to participate in the
insurer’s network and be paid for services.
The insurer’s metrics address access to care, clinical status assessments, and patient education. Physicians can earn rewards for enhancing their patients’ navigation through healthcare, while addressing quality and cost of care, reported Health Payer Intelligence.
Humana claims its OMOC quality and cost measurements are
effective in the areas of:
emergency room visits,
medical and pharmacy drugs,
laboratory and pathology services, and
To help cover reporting and other costs associated with
participation in the OMOC program, Humana is offering physician practices
analytics data and care coordinating payments, notes Modern Healthcare.
“The practices that improve their own performance over a one-year period will see the care coordination fee from Humana increase,” Julie Royalty, Humana’s Director of Oncology and Laboratory Strategies, told Modern Healthcare.
Value-Based Care Programs are Expensive
Due to the cost of collecting data and increasing staff capabilities to meet program parameters, participating in value-based care models can be costly for medical practices, according to Scottsdale, Ariz.-based Darwin Research Group (DRG), which studies emerging payer models.
Some of the inaugural medical practices in the Humana OMOC
Southern Cancer Center, Alabama;
US Oncology Network, Arizona;
Cancer Specialists of North Florida;
Michigan Healthcare Professionals;
University of Cincinnati Physicians Company; and
Center for Cancer and Blood Disorders, Texas.
Other Payers’ Value-Based Cancer Care Programs
“Depending upon which part of the country you’re in,
alternative payment models in oncology are becoming the norm not the exception,”
noted the DRG study. “Humana is a little late to the party.”
Darwin Research added that Humana may realize benefits from
having observed other insurance company programs, such as:
Humana has developed other value-based bundled payment
programs as well. It has episode-based
models that feature open participation for doctors serving Humana Medicare
Advantage members needing:
total hip or knee joint replacement (available
nationwide since 2018); and
spinal fusion surgery (launched in 2019).
Humana also started a maternity episode-of-care bundled
payment program last year for its commercial plan members.
In fact, more than 1,000 providers and Humana value-based
relationships are in effect. They involve more than two-million Medicare
Advantage members and 115,000 commercial members.
Clearly, Humana has embraced value-based care. And, to
participate, anatomic pathology groups and medical laboratories will need to be
efficient and effective in meeting the payer’s performance requirements, while
serving their patients and referring doctors with quality diagnostic services.
Mobile, wearable, mHealth monitoring devices are a key element of many employer fitness programs and clinical laboratories can play an important role in their success
For years Dark Daily has encouraged clinical laboratories to get involved in corporate wellness programs as a way to support their local communities and increase revenues. Now, leveraging the popularity of mobile health (mHealth) wearable devices, UnitedHealthcare (UHC) has found a new way to incentivize employees participating in the insurer’s Motion walking program. UHC is offering free Apple Watches to employees willing to meet or exceed certain fitness goals.
This is the latest wrinkle in a well-established trend of incentivizing
beneficiaries to meet healthcare goals, such as stopping smoking, losing
weight, reducing cholesterol, and lowering blood pressure.
It’s an intriguing gamble by UHC and presents another opportunity for medical laboratories that are equipped to monitor and validate participants’ progress and physical conditions.
How to Get a Free Apple
Watch and FIT at the Same Time
CNBC reported that UHC’s Motion program participants number in the hundreds of thousands. And, according to a UHC news release, they can earn cash rewards up to $1,000 per year. The idea is that participants pay off the cost of their “free” Apple Watch one day at a time by achieving activity goals set in UHC’s FIT tracking method. Those goals include:
500 steps in seven minutes; six times a day, at least one hour apart;
3,000 steps in 30 minutes; and,
10,000 steps in one day.
Though hundreds of thousands of beneficiaries are eligible to participate in UHC’s Motion program through their employers, only 45% of those eligible have enrolled in Motion, Fox Business reported.
UHC hopes the offer of a free Apple Watch (which has
applications to track minutes of exercise, a heart rate monitor, and more) will
encourage people to sign up and then progress toward the Motion program’s FIT
As people meet these goals, they earn $4/day toward the cost
of the Apple Watch. Participants, who do not take enough steps in a six-month period
could be required to repay a percentage of the cost of the smartwatch.
Motion participants who already own an Apple Watch can still
earn up to $1,000 per year in cash rewards for achieving the FIT goals.
Impact of mHealth
Programs/Technology Not Clear
Chronic diseases, including diabetes and heart disease, annually cost the US healthcare system $190 billion and employers $126 billion in lost productivity, according to the Centers for Disease Control and Prevention (CDC).
However, some researchers say it’s too early for mHealth
wearables, medication apps, physician virtual engagement, and other digital tools
(many launched within the past five to seven years) to effect key indicators,
such as obesity, life expectancy, and smoking cessation.
“Some of the benefits of these new tools won’t be realized for a long time. It’s really hard to tease out the impact of digital health. Maybe we’re helping people, but we’re not detecting it,” James Murphy, MD, Associate Professor, University of California San Diego Health and radiation oncologist, told CNBC.
Nevertheless, it behooves medical laboratories to develop
procedures for analyzing and reporting data that could impact people who use
wearable mHealth devices to participate in employer wellness programs.
For example, labs could contact insurance companies with
information about biomarkers that provide views into an individual’s progress
toward personal health goals.
Data-driven recommendations from medical laboratories about
tests for chronic conditions such as heart disease and diabetes will likely be
welcomed by payers.