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AMA Issues Proposal to Help Circumvent False and Misleading Information When Using Artificial Intelligence in Medicine

Pathologists and clinical laboratory managers will want to stay alert to the concerns voiced by tech experts about the need to exercise caution when using generative AI to assist medical diagnoses

Even as many companies push to introduce use of GPT-powered (generative pre-trained transformer) solutions into various healthcare services, both the American Medical Association (AMA) and the World Health Organization (WHO) as well as healthcare professionals urge caution regarding use of AI-powered technologies in the practice of medicine. 

In June, the AMA House of Delegates adopted a proposal introduced by the American Society for Surgery of the Hand (ASSH) and the American Association for Hand Surgery (AAHS) titled, “Regulating Misleading AI Generated Advice to Patients.” The proposal is intended to help protect patients from false and misleading medical information derived from artificial intelligence (AI) tools such as GPTs.

GPTs are an integral part of the framework of a generative artificial intelligence that creates text, images, and other media using generative models. These neural network models can learn the patterns and structure of inputted information and then develop new data that contains similar characteristics.

Through their proposal, the AMA has developed principles and recommendations surrounding the benefits and potentially harmful consequences of relying on AI-generated medical advice and content to advance diagnoses.

Alexander Ding, MD

“We’re trying to look around the corner for our patients to understand the promise and limitations of AI,” said Alexander Ding, MD (above), AMA Trustee and Associate Vice President for Physician Strategy and Medical Affairs at Humana, in a press release. “There is a lot of uncertainty about the direction and regulatory framework for this use of AI that has found its way into the day-to-day practice of medicine.” Clinical laboratory professionals following advances in AI may want to remain informed on the use of generative AI solutions in healthcare. (Photo copyright: American Medical Association.)

Preventing Spread of Mis/Disinformation

GPTs are “a family of neural network models that uses the transformer architecture and is a key advancement in artificial intelligence (AI) powering generative AI applications such as ChatGPT,” according to Amazon Web Services.

In addition to creating human-like text and content, GPTs have the ability to answer questions in a conversational manner. They can analyze language queries and then predict high-quality responses based on their understanding of the language. GPTs can perform this task after being trained with billions of parameters on massive language datasets and then generate long responses, not just the next word in a sequence. 

“AI holds the promise of transforming medicine,” said diagnostic and interventional radiologist Alexander Ding, MD, AMA Trustee and Associate Vice President for Physician Strategy and Medical Affairs at Humana, in an AMA press release.

“We don’t want to be chasing technology. Rather, as scientists, we want to use our expertise to structure guidelines, and guardrails to prevent unintended consequences, such as baking in bias and widening disparities, dissemination of incorrect medical advice, or spread of misinformation or disinformation,” he added.

The AMA plans to work with the federal government and other appropriate organizations to advise policymakers on the optimal ways to use AI in healthcare to protect patients from misleading AI-generated data that may or may not be validated, accurate, or relevant.

Advantages and Risks of AI in Medicine

The AMA’s proposal was prompted by AMA-affiliated organizations that stressed concerns about the lack of regulatory oversight for GPTs. They are encouraging healthcare professionals to educate patients about the advantages and risks of AI in medicine. 

“AI took a huge leap with large language model tool and generative models, so all of the work that has been done up to this point in terms of regulatory and governance frameworks will have to be treated or at least reviewed with this new lens,” Sha Edathumparampil, Corporate Vice President, Digital and Data, Baptist Health South Florida, told Healthcare Brew.

According to the AMA press release, “the current limitations create potential risks for physicians and patients and should be used with appropriate caution at this time. AI-generated fabrications, errors, or inaccuracies can harm patients, and physicians need to be acutely aware of these risks and added liability before they rely on unregulated machine-learning algorithms and tools.”

According to the AMA press release, the organization will propose state and federal regulations for AI tools at next year’s annual meeting in Chicago.

In a July AMA podcast, AMA’s President, Jesse Ehrenfeld, MD, stressed that more must be done through regulation and development to bolster trust in these new technologies.

“There’s a lot of discomfort around the use of these tools among Americans with the idea of AI being used in their own healthcare,” Ehrenfeld said. “There was a 2023 Pew Research Center poll [that said] 60% of Americans would feel uncomfortable if their own healthcare provider relied on AI to do things like diagnose disease or recommend a treatment.”

WHO Issues Cautions about Use of AI in Healthcare

In May, the World Health Organization (WHO) issued a statement advocating for caution when implementing AI-generated large language GPT models into healthcare.

A current example of such a GPT is ChatGPT, a large language-based model (LLM) that enables users to refine and lead conversations towards a desired length, format, style, level of detail and language. Organizations across industries are now utilizing GPT models for Question and Answer bots for customers, text summarization, and content generation and search features. 

“Precipitous adoption of untested systems could lead to errors by healthcare workers, cause harm to patients, erode trust in AI, and thereby undermine (or delay) the potential long-term benefits and uses of such technologies around the world,” commented WHO in the statement.

WHO’s concerns regarding the need for prudence and oversight in the use of AI technologies include:

  • Data used to train AI may be biased, which could pose risks to health, equity, and inclusiveness.
  • LLMs generate responses that can appear authoritative and plausible, but which may be completely incorrect or contain serious errors.
  • LLMs may be trained on data for which consent may not have been given.
  • LLMs may not be able to protect sensitive data that is provided to an application to generate a response.
  • LLMs can be misused to generate and disseminate highly convincing disinformation in the form of text, audio, or video that may be difficult for people to differentiate from reliable health content.

Tech Experts Recommended Caution

Generative AI will continue to evolve. Therefore, clinical laboratory professionals may want to keep a keen eye on advances in AI technology and GPTs in healthcare diagnosis.

“While generative AI holds tremendous potential to transform various industries, it also presents significant challenges and risks that should not be ignored,” wrote Edathumparampil in an article he penned for CXOTECH Magazine. “With the right strategy and approach, generative AI can be a powerful tool for innovation and differentiation, helping businesses to stay ahead of the competition and better serve their customers.”

GPT’s may eventually be a boon to healthcare providers, including clinical laboratories, and pathology groups. But for the moment, caution is recommended.

JP Schlingman

Related Information:

AMA Adopts Proposal to Protect Patients from False and Misleading AI-generated Medical Advice

Regulating Misleading AI Generated Advice to Patients

AMA to Develop Recommendations for Augmented Intelligence

What is GPT?

60% of Americans Would Be Uncomfortable with Provider Relying on AI in Their Own Health Care

Navigating the Risks of Generative AI: A Guide for Businesses

Contributed: Top 10 Use Cases for AI in Healthcare

Anatomic Pathology at the Tipping Point? The Economic Case for Adopting Digital Technology and AI Applications Now

ChatGPT, AI in Healthcare and the future of Medicine with AMA President Jesse Ehrenfeld, MD, MPH

What is Generative AI? Everything You Need to Know

WHO Calls for Safe and Ethical AI for Health

GPT-3

Patients and Physicians Go Online to Pressure Insurers on Prior Authorization Denial of Claims, Something Genetic Testing Labs Regularly Encounter

In a handful of cases, health insurers reversed denials after physicians or patients posted complaints on social media

Prior authorization requirements by health insurers have long been a thorn in the side of medical laboratories, as well as physicians. But now, doctors and patients are employing a new tactic against the practice—turning to social media to shame payers into reversing denials, according to KFF Health News (formerly Kaiser Health News).

Genetic testing lab companies are quite familiar with prior authorization problems. They see a significant number of their genetic test requests fail to obtain a prior authorization. Thus, if the lab performs the test, the payer will likely not reimburse, leaving the lab to bill the patient for 100% of the test price, commonly $1,000 to $5,000. Then, an irate patient typically calls the doctor to complain about the huge out-of-pocket cost.

One patient highlighted in the KFF story was Sally Nix of Statesville, North Carolina. Her doctor prescribed intravenous immunoglobulin infusions to treat a combination of autoimmune diseases. But Nix’s insurer, Blue Cross Blue Shield of Illinois (BCBSIL), denied payment for the therapy, which amounted to $13,000 every four weeks, KFF Health News reported. So, she complained about the denial on Facebook and Instagram.

“There are times when you simply must call out wrongdoings,” she wrote in an Instagram post, according to the outlet. “This is one of those times.”

In response, an “escalation specialist” from BCBSIL contacted her but was unable to help. Then, after KFF Health News reached out, Nix discovered on her own that $36,000 in outstanding claims were marked “paid.”

“No one from the company had contacted her to explain why or what had changed,” KFF reported. “[Nix] also said she was informed by her hospital that the insurer will no longer require her to obtain prior authorization before her infusions, which she restarted in July.”

“I think we’re on the precipice of really improving the environment for prior authorization,” said Todd Askew, Senior Vice President, Advocacy, for the American Medical Association, in an AMA Advocacy Update. If this was to happen, it would be welcome news for clinical laboratories and anatomic pathology groups. (Photo copyright: Nashville Medical News.)

Physicians Also Take to Social Media to Complain about Denials

Some physicians have taken similar actions, KFF Health News reported. One was gastroenterologist Shehzad A. Saeed, MD, of Dayton Children’s Hospital in Ohio. Saeed posted a photo of a patient’s skin rash on Twitter in March after Anthem denied treatment for symptoms of Crohn’s disease. “Unacceptable and shameful!” he tweeted.

Two weeks later, he reported that the treatment was approved soon after the tweet. “When did Twitter become the preferred pathway for drug approval?” he wrote.

Eunice Stallman, MD, a psychiatrist from Boise, Idaho, complained on X (formerly Twitter) about Blue Cross of Idaho’s prior authorization denial of a brain cancer treatment for her nine-month-old daughter. “This is my daughter that you tried to deny care for,” she posted. “When a team of expert [doctors] recommend a treatment, your PharmD reviewers don’t get to deny her life-saving care for your profits.”

However, in this case, she posted her account after Blue Cross Idaho reversed the denial. She said she did this in part to prevent the payer from denying coverage for the drug in the future. “The power of the social media has been huge,” she told KFF Health News. The story noted that she joined X for the first time so she could share her story.

Affordable Care Act Loophole?

“We’re not going to get rid of prior authorization. Nobody is saying we should get rid of it entirely, but it needs to be right sized, it needs to be simplified, it needs to be less friction between the patient and accessing their benefits. And I think we’re on really good track to make some significant improvements in government programs, as well as in the private sector,” said Todd Askew, Senior Vice President, Advocacy, for the American Medical Association, in an AMA Advocacy Update.

However, KFF Health News reported that Kaye Pestaina, JD, a Kaiser Family Foundation VP and Co-Director of the group’s Program on Patient and Consumer Protections, noted that some “patient advocates and health policy experts” have questioned whether payers’ use of prior authorization denials may be a way to get around the Affordable Care Act’s prohibition against denial of coverage for preexisting conditions.

“They take in premiums and don’t pay claims,” family physician and healthcare consultant Linda Peeno, MD, told KFF Health News. “That’s how they make money. They just delay and delay and delay until you die. And you’re absolutely helpless as a patient.” Peeno was a medical reviewer for Humana in the 1980s and then became a whistleblower.

The issue became top-of-mind for genetic testing labs in 2017, when Anthem (now Elevance) and UnitedHealthcare established programs in which physicians needed prior authorization before the insurers would agree to pay for genetic tests.

Dark Daily’s sister publication The Dark Report covered this in “Two Largest Payers Start Lab Test Pre-Authorization.” We noted then that it was reasonable to assume that other health insurers would follow suit and institute their own programs to manage how physicians utilize genetic tests.

At least one large payer has made a move to reduce prior authorization in some cases. Effective Sept. 1, UnitedHealthcare began a phased approach to remove prior authorization requirements for hundreds of procedures, including more than 200 genetic tests under some commercial insurance plans.

However, a source close to the payer industry noted to Dark Daily that UnitedHealthcare has balked at paying hundreds of millions’ worth of genetic claims going back 24 months. The source indicated that genetic test labs are engaging attorneys to push their claims forward with the payer.

Is Complaining on Social Media an Effective Tactic?

A story in Harvard Business Review cited research suggesting that companies should avoid responding publicly to customer complaints on social media. Though public engagement may appear to be a good idea, “when companies responded publicly to negative tweets, researchers found that those companies experienced a drop in stock price and a reduction in brand image,” the authors wrote.

However, the 2023 “National Customer Rage Survey,” conducted by Customer Care Measurement and Consulting and Arizona State University, found that nearly two-thirds of people who complained on social media received a response. And “many patients and doctors believe venting online is an effective strategy, though it remains unclear how often this tactic works in reversing prior authorization denials,” KFF Health News reported.

Federal Government and States Step In

KFF Health News reported that the federal government is proposing reforms that would require some health plans “to provide more transparency about denials and to speed up their response times.” The changes, which would take effect in 2026, would apply to Medicaid, Medicare Advantage, and federal Health Insurance Marketplace plans, “but not employer-sponsored health plans.”

KFF also noted that some insurers are voluntarily revising prior authorization rules. And the American Medical Association reported in March that 30 states, including Arkansas, California, New Jersey, North Carolina, and Washington, are considering their own legislation to reform the practice. Some are modeled on legislation drafted by the AMA.

Though the states and the federal government are proposing regulations to address prior authorization complaints, reform will likely take time. Given Harvard Business Review’s suggestion to resist replying to negative customer complaints in social media, clinical labs—indeed, all healthcare providers—should carefully consider the full consequences of going to social media to describe issues they are having with health insurers.

—Stephen Beale

Related Information:

Doctors and Patients Try to Shame Insurers Online to Reverse Prior Authorization Denials

Delays Related to Prior Authorization in Inflammatory Bowel Disease

Why You Shouldn’t Engage with Customer Complaints on Twitter

Feds Move to Rein In Prior Authorization, a System That Harms and Frustrates Patients

“Damaged Care” Premiere Features HMO Whistleblower

Major Insurers to Ease Prior Authorizations Ahead of Federal Crackdown

How Labs Can Improve Their Relationships with Payers for Genomic Test Reimbursement

Payers Request More Claims Documentation

Early Appearance of RSV Cases, Combined with Influenza and COVID-19, Raises Concern about Possibility of a Tripledemic During This Flu Season

Experts advise clinical laboratories to prepare now for a marked increase in demand for RSV, COVID-19, and influenza testing

Are the COVID-19 lockdowns responsible for the increase in cases of respiratory syncytial virus (RSV)? Some physicians believe that may be the case and it has hospitals, clinical laboratories, and pathology groups scrambling to prepare for a possible “tripledemic,” according to UC Davis Health.

The addition of RSV as we move into what is predicted to be a bad influenza (flu) season has prompted the Centers for Disease Control and Prevention (CDC) to issue a Health Alert Network (HAN) advisory which states, “Co-circulation of respiratory syncytial virus (RSV), influenza viruses, SARS-CoV-2, and others could place stress on healthcare systems this fall and winter.” This is especially true of clinical laboratories that still struggle to keep pace with demand for COVID-19 testing.

Dean Blumberg, MD

“COVID cases are expected to rise during the winter. This will be occurring at the same time we expect to see influenza rates increase while we are already seeing an early start to RSV season,” said Dean Blumberg, MD (above), chief of pediatric infectious diseases at UC Davis Children’s Hospital. “With all three viruses on the rise, we are worried about an increase in the rates of viral infection that may lead to an increase in hospitalizations.” Clinical laboratories should prepare for a marked increase in demand for RSV testing, as well as COVID-19 and influenza. (Photo copyright: UC Davis Health.)

Masking, Lockdowns, and Social Distancing Could be Responsible

Every winter in the United States, outbreaks of the flu and RSV occur. However, this year the RSV outbreak appears to be more serious. The CDC warns that “surveillance has shown an increase in RSV detections and RSV-associated emergency department visits and hospitalizations in multiple US regions, with some regions nearing seasonal peak levels.”

The current spread of RSV infections taking place in the US varies from prior outbreaks in notable ways:

  • Incidents are happening in the fall, whereas RSV outbreaks usually peak starting in late December.
  • Older children as well as infants are being hospitalized.
  • Current cases appear to be more severe.
  • Episodes are rising at a time when pediatric hospitalizations are already higher than usual due to other illnesses like COVID-19, influenza, and biennial enteroviruses.

Some experts believe that masking and social distancing due to the COVID-19 pandemic resulted in a respite of RSV infections in 2020. However, cases intensified in 2021, most likely a result of fewer young children being exposed to RSV during the previous year.

Most children typically have had at least one RSV infection before the age of two and the illness becomes less troublesome as children get older.

“The theory is that everyone’s now back together and this is a rebound phenomenon,” Jeffrey Kline, MD, Associate Chair of Research, Wayne State University School of Medicine in Detroit, told MarketWatch. “If we think about the relative increase—ninefold increase—that’s not nothing, especially in the pediatric [emergency departments]. Holy mackerel.”

Most RSV Infected Children Require Hospitalization

Kline is in charge of a surveillance network that aggregates information regarding incidents of viral infections from 70 US hospitals. The data shows that more children are being hospitalized with COVID-19 than with RSV, but that 5% of children are testing positive for both illnesses. About 60% of children in that group require hospitalization.

According to the CDC, individuals with RSV will typically begin to experience symptoms within four to six days after getting infected. Symptoms of RSV, which tend to appear in stages, include:

  • Runny nose
  • Decrease in appetite
  • Coughing
  • Sneezing
  • Fever
  • Wheezing

“RSV causes a mild cold illness in most people. But it can be very dangerous for very young children and older adults. And young infants are usually the most at risk of hospitalizations in what physicians would call their first RSV season,” said Andrea Garcia, JD, Vice President, Medicine and Public Health, American Medical Association (AMA), in a November 2 AMA update on the current flu season.

“In a pre-pandemic year,” she added, “we would see 1% to 2% of babies younger than six months with an RSV infection maybe needing to be hospitalized. And virtually all children have gotten an RSV infection by the time they’re two-years-old.”

Infants are at a much higher risk of experiencing severe disease due to RSV because their immune systems are not fully developed, and those under six months old are unable to breathe through their mouths if they are congested. 

“Age by itself is a risk factor for more severe disease, meaning that the younger babies are usually the ones that are sick-sick,” Asuncion Mejias, MD, PhD, a principal investigator with the Center for Vaccines and Immunity at the Abigail Wexner Research Institute, Nationwide Children’s Hospital, in Columbus, Ohio, told MarketWatch. “We are also seeing older kids, probably because they were not exposed to RSV the previous season.”

Mejias is studying whether prior exposure to COVID-19 alters how a baby’s immune system reacts to RSV, and if it may lead to more severe illness in those babies. 

“That is something to work on and understand,” she said.

Comorbidities and Compromised Immune Systems also a Factor

Older adults and adults with weakened immune systems are predisposed to RSV infections, but there are things people can do to mitigate their chances of becoming ill from RSV.

“[RSV] is spread through contact with droplets from the nose and throat of infected people when they cough or sneeze. It can also be spread through respiratory secretions on surfaces,” said Garcia in the AMA update. “So, it’s a really good idea to clean and disinfect surfaces, especially in areas where young children are constantly touching things. Handwashing is always important. And if you are sick, please stay home.”

She added, “Premature infants, children with certain medical conditions, are also eligible to take a monthly monoclonal antibody treatment during RSV season, and that can help them stay out of the hospital.”

Most RSV infections typically go away on their own within a week or two. But such infections can lead to more severe illnesses, such as bronchiolitis and pneumonia. The more serious cases may require hospitalization with additional oxygen, IV fluids, and even intubation with mechanical ventilation. In most cases, hospitalization only lasts a few days, according to the CDC.

Be Prepared for a Tripledemic

“Health officials are concerned that this could be a sign of what’s to come,” stated Garcia in the AMA update. “A difficult winter, with multiple respiratory viruses circulating.”

For clinical laboratory managers, the early arrival of RSV cases at the front end of this influenza season provides an opportunity to position their labs to better meet the demand for RSV testing. They should also advise their client physicians that there may be a surge of respiratory illnesses during this flu season.

JP Schlingman

Related Information:

“Tripledemic” in US Could Bring Deluge of Patients to Hospitals

When COVID-19, Flu and RSV Meet. The Potential for a Tripledemic.

A Tripledemic Expected This Winter

CDC HAN Alert: Increased Respiratory Virus Activity, Especially Among Children, Early in the 2022-2023 Fall and Winter

CDC: Respiratory Syncytial Virus Infection (RSV)

6-Year-Old with RSV Dies as Hospitals See Alarming Rise in New Virus Cases

COVID-19 May Be to Blame for the Surge in RSV Illness Among Children. Here’s Why.

Influenza, COVID, and RSV Cases Continue to Rise with Andrea Garcia, JD, MPH

COVID-19 vs. Flu vs. RSV: How to Tell the Difference Between Respiratory Infections

Pandemic ‘Immunity Gap’ is Probably Behind Surge in RSV Cases, Scientists Say

R.S.V. Cases Are Rising. Here’s What You Need to Know

Transition from Fee-for-Service to Value-Based Reimbursement for Hospitals, Physicians, and Clinical Laboratories Continues, Albeit Slowly, Reports Say 

Medical laboratories and anatomic pathologists may need to squeeze into narrow networks to be paid under value-based schemes, especially where Medicare Advantage is concerned

Pathologists have likely heard the arguments in favor of value-based payment versus fee-for-service (FFS) reimbursement models: FFS encourages providers to order medically unnecessary procedures and lab tests. FFS removes incentives for providers to order patient services more carefully. Fraudsters can generate huge volumes of FFS claims that take payers months/years to recognize and stop.

Studies that favor value-based payment schemes support these claims. But do hospitals and other healthcare providers also accept them? And how is value-based reimbursement really doing?

To find out, Chicago-based thought leadership and advisory company 4Sight Health culled data from various organizations’ reports that suggest value-based reimbursement shows signs of growth as well as signs of stagnation.

Value-Based Payment Has Its Ups and Downs

Healthcare journalist David Burda is News Editor and Columnist at 4Sight Health. In his article, “Is Value-Based Reimbursement Mostly Dead or Slightly Alive?” Burda commented on data from various industry reports that indicated value-based reimbursement shows “signs of life.” For example:

On the other hand, Burda reported that value-based reimbursement also has these declining indicators:

  • 39.3% of provider payments “flowed” through FFS plans in 2020 with no link to cost or quality. This was unchanged since 2019. (HCPLAN report)
  • 19.8% of FFS payments to providers in 2020 were linked to cost or quality, down from 22.5% in 2019. (HCPLAN report)
  • 88% of doctors reported accepting FFS payments in 2019, an increase from 87% in 2018. (AMA report)

Does Today’s Healthcare Industry Support Value-based Care?

A survey of 680 physicians conducted by the Deloitte Center for Health Solutions suggests the answer could be “not yet.” In “Equipping Physicians for Value-Based Care,” Deloitte reported:

  • “Physician compensation continues to emphasize volume more than value.
  • “Availability and use of data-driven tools to support physicians in practicing value-based care continue to lag.
  • “Existing care models do not support value-based care.”

Deloitte analysts wrote, “Physicians increasingly recognize their role in improving the affordability of care. We repeated a question we asked six years ago and saw a large increase in the proportion of physicians who say they have a prominent role in limiting the use of unnecessary treatments and tests: 76% in 2020 vs. 57% in 2014.

“Physicians also recognize that today’s care models are not geared toward value,” Deloitte continued. “They see many untapped opportunities for improving quality and efficiency. They estimate that even today, sizable portions of their work can be performed by nonphysicians (30%) in nontraditional settings (30%) and/or can be automated (18%), creating opportunities for multidisciplinary care teams and clinicians to work at the top of their license.”

Hospital CFOs Also See Opportunities for Value-based Care

In his 4sight Health article, Burda reported on data from a “Guidehouse Center for Health Insights’ analysis of a 2021 Healthcare Financial Management Association (HFMA) survey of more than 100 health systems CFOs that found that most said they are still interested in seeking value-based payment arrangements this year.”

According to the HFMA survey, among the arrangement CFOs indicated, 59% expressed interest in Medicare Advantage value-based payment contracts.

This could be problematic for clinical laboratories, according to Robert Michel, Editor-in-Chief of Dark Daily and our sister publication The Dark Report. According to Guidehouse, “Nearly 60% of health systems plan to advance into risk-based Medicare Advantage models in 2022.”

Medicare Advantage (MA) enrollments have escalated over 10 years: 26.4 million people of the 62.7 million eligible for Medicare chose MA in 2021, noted a Kaiser Family Foundation brief that also noted MA enrollment in 2021 was up by 2.4 million beneficiaries or 10% over 2020.

Graph of Medicare Advantage Enrollment
The graph above is taken from the Kaiser Family Foundation report, “Medicare Advantage in 2021: Enrollment Update and Key Trends.” According to the KFF, “In 2021, more than four in 10 (42%) Medicare beneficiaries—26.4 million people out of 62.7 million Medicare beneficiaries overall—are enrolled in Medicare Advantage plans; this share has steadily increased over time since the early 2000s.” Since MA employs narrow networks for its healthcare providers, it’s likely this trend will continue to affect clinical laboratories that may find it difficult to access these providers. (Graphic copyright: Kaiser Family Foundation.)

“The shift from Medicare Part B—where any lab can bill Medicare on behalf of patients for doctor visits and outpatient care, including lab tests—to Medicare Advantage is a serious financial threat for smaller and regional labs that do a lot of Medicare Part B testing. The Medicare Advantage plans often have networks that exclude all but a handful of clinical laboratories as contracted providers,” Michel cautioned. “Moving into the future, it’s incumbent on regional and smaller clinical laboratories to develop value-added services that solve health plans’ pain points and encourage insurers to include local labs in their networks.”

Medical laboratories and anatomic pathology groups need to be aware of this trend. Michel says value-based care programs call on clinical laboratories to collaborate with healthcare partners toward goals of closing care gaps.

“Physicians and hospitals in a value-based environment need a different level of service and professional consultation from the lab and pathology group because they are being incented to detect disease earlier and be active in managing patients with chronic conditions to keep them healthy and out of the hospital,” he added.

Value-based reimbursement may eventually replace fee-for-service contracts. The change, however, is slow and clinical laboratories should monitor for opportunities and potential pitfalls the new payment arrangements might bring.

—Donna Marie Pocius

Related Information:

Is Value-Based Reimbursement Mostly Dead or Slightly Alive?

APM Measurement Progress of Alternative Payment Models: 2020-2021 Methodology and Results Report   

Policy Research Perspectives: Payment and Delivery in 2020

Equipping Physicians for Value-Based Care: What Needs to Change in Care Models, Compensation, and Decision-Making Tools

Nearly 60% of Health Systems Pursuing Risk-Based Medicare Advantage Models in 2022, Guidehouse Analysis Shows

Medicare Advantage in 2021: Enrollment Update and Key Trends

CMS’ Latest Value-Based Reimbursement Model Explores Geographic Direct Contracting for Medicare and Focuses on Costs and Quality

ASCP and CAP Support New Legislation That Bars Surprise Medical Billing

The No Surprises Act, passed as part of the COVID-19 relief package, ensures patients do not receive surprise bills after out-of-network care, including hospital-based physicians such as pathologists

Consumer demand for price transparency in healthcare has been gaining support in Congress after several high-profile cases involving surprise medical billing received widespread reporting. Dark Daily covered many of these cases over the years.

In “Are Clinical Laboratories Prepared to Cope with Outrage Over Surprise Medical Billing? Patient Access Management May Be an Effective Solution,” we reported on how some early-adopter medical labs and pathology groups were using Patient Access Management (PAM) platforms to address new federal transparency policies, change patient expectations about billing, and increase revenue by lowering denial rates.

And in “Balance Billing Under Increased Scrutiny at Both State and Federal Levels: Clinical Laboratory Tests Top List of Surprise Bills Received by Patients,” we reported on how clinical laboratory testing topped the list of the surprise bills received by patients, according to a survey conducted by the National Opinion Research Center (NORC) at the University of Chicago.

Now, after initial opposition and months of legislative wrangling, organizations representing medical laboratories and clinical pathologists have expressed support for new federal legislation that aims to protect patients from surprise medical bills, including for clinical pathology and anatomic pathology services.

The new law Congress passed is known as the No Surprises Act (H.R.3630) and is part of the $900 billion COVID relief and government funding package signed by President Trump on December 27.

“While this legislation is not perfect (no law is), it serves as a compromise where patients ultimately win,” stated the American Society for Clinical Pathology (ASCP) in its ePolicy News publication.

The law addresses the practice of “balance billing,” in which patients receive surprise bills for out-of-network medical services even when they use in-network providers. An ASCP policy statement noted that “a patient (consumer) may receive a bill for an episode of care or service they believed to be in-network and therefore covered by their insurance, but was in fact out-of-network.” This, according to the ASCP, “occurs most often in emergency situations, but specialties like pathology, radiology, and anesthesiology are affected as well.”

Most portions of the No Surprises Act take effect on January 1, 2022. The law prohibits balance billing for emergency care, air ambulance transport, or, in most cases, non-emergency care from in-network providers. Instead, if a patient unknowingly receives services from an out-of-network provider, they are liable only for co-pays and deductibles they would have paid for in-network care.

New Law Bars Pathologists from Balance Billing without Advance Patient Consent

The law permits balance billing under some circumstances, but only if the patient gives advance consent. And some specialties, including pathologists, are barred entirely from balance billing.

The law also establishes a process for determining how healthcare providers are reimbursed when a patient receives out-of-network care. The specifics of that process proved to be a major sticking point for providers. In states that have their own surprise-billing protections, payment will generally be determined by state law. Otherwise, payers and providers have 30 days to negotiate payment. If they can’t agree, payment is determined by an arbiter as part of an independent dispute resolution (IDR) process.

Early Proposal Drew Opposition

An early proposal to prohibit surprise billing drew opposition from a wide range of medical societies, including the ASCP, CAP, and the American Medical Association (AMA).

All were signatories to a July 29, 2020, letter sent to leaders of the US Senate and House of Representatives urging them to hold off from enacting surprise billing protections as part of COVID relief legislation. Though the groups agreed in principle with the need to protect patients from surprise billing, they contended that the proposed legislation leaned too heavily in favor of insurers, an ASCP news release noted.

“Legislative proposals that would dictate a set payment rate for unanticipated out-of-network care are neither market-based nor equitable, and do not account for the myriad inputs that factor into payment negotiations between insurers and providers,” the letter stated. “These proposals will only incentivize insurers to further narrow their provider networks and would also result in a massive financial windfall for insurers. As such, we oppose the setting of a payment rate in statute and are particularly concerned by proposals that would undermine hospitals and front-line caregivers during the COVID-19 pandemic.”

Hospital groups, including the American Hospital Association (AHA), raised similar concerns in a July 30 letter to congressional leaders.

On December 11, leaders of key House and Senate committees announced agreement on a bipartisan draft of the bill that appeared to address these concerns, including establishment of the arbitration process for resolving payment disputes.

However, in a letter sent to the committee chairs and ranking members, the AHA asked for changes in the dispute-resolution provisions, including a prohibition on considering Medicare or Medicaid rates during arbitration. “We are concerned that the IDR process may be skewed if the arbiter is able to consider public payer reimbursement rates, which are well known to be below the cost of providing care,” the association stated. However, legislators agreed to the change after last-minute negotiations.

AHA President and CEO Rick Pollack headshot in suit and tie
“The AHA is pleased that Congress rejected approaches that would impose arbitrary rates on providers, which could have significant consequences far beyond the scope of surprise medical bills and impact access to hospital care,” AHA President and CEO Rick Pollack (above) said in a statement. “We also applaud Congress for rejecting attempts to base rates on public payers.” (Photo copyright: American Hospital Association.)

Dispute Resolution for Pathologists

The CAP also expressed support for the final bill. In a statement, CAP noted that “As the legislation evolved during the 116th Congress, CAP members met with their federal lawmakers to discuss the CAP’s policy priorities.

“Through the CAP’s engagement and collaboration with other physician associations, the legislation improved drastically,” the CAP stated. “Specifically, the CAP lobbied Congress to hold patients harmless, establish a fair reimbursement formula for services provided, deny insurers the ability to dictate payment, create an independent dispute resolution (IDR) process that pathologists can participate in, and require network adequacy standards for health insurers.”

As laboratory testing was identified by thousands of respondents to the University of Chicago survey as the top surprise bill, it is likely that billing and transparency in charges for clinical pathologist and anatomic pathologist will continue to be scrutinized by law makers and healthcare associations.

—Stephen Beale

Related Information:

Detailed Summary of No Surprises Act

H.R.3630 – No Surprises Act

Are Clinical Laboratories Prepared to Cope with Outrage Over Surprise Medical Billing? Patient Access Management May Be an Effective Solution

Balance Billing Under Increased Scrutiny at Both State and Federal Levels; Clinical Laboratory Tests Top List of Surprise Bills Received by Patients

The No Surprises Act: Implications for States

AHA Statement on COVID Relief Package and Government Funding Bill

AHA Letter on No Surprises Act

How the CAP Shaped Surprise Billing Legislation with its Advocacy

Success on Surprise Medical Bills

Congress Curbs Surprise Billing in Omnibus Coronavirus Relief Bill

ASCP Joins AMA on Surprise Billing Letter

ASCP Continues Patient Advocacy Efforts on Surprise Billing Legislation

Surprise Medical Bills Cost Americans Millions. Congress Finally Banned Most of Them

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