But even though the College of American Pathologists (CAP) and nine other organizations signed a December 12 stakeholder letter to leaders of key House and Senate committees urging passage of legislation that would enable some regulation of LDTs, the VALID Act was ultimately omitted from the year-end omnibus spending bill (H.R. 2617).
That may be due to pressure from organizations representing clinical laboratories and pathologists which lobbied hard against the bill.
Responding to criticism of its stance on FDA oversight of LDTs, in a May 2022 open letter posted on the organization’s website, anatomic pathologist and CAP president Emily Volk, MD, said “we at the CAP have an honest difference of opinion with some other respected laboratory organizations. … We believe the VALID Act is the only viable piece of legislation addressing the LDT issue. … the VALID Act contains many provisions that are similar to policy the CAP has advocated for regarding the regulation of laboratory tests since 2009. Importantly, the current version includes explicit protections for pathologists and our ability to practice medicine without infringement from the Food and Drug Administration (FDA).” (Photo copyright: College of American Pathologists.)
Organizations on Both Sides Brought Pressure to Bear on Legislators
The AAMC and AMP were especially influential, Bucshon told ProPublica. In addition to spending hefty sums on lobbying, AMP urged its members to contact legislators directly and provided talking points, ProPublica reported.
“The academic medical centers and big medical centers are in every state,” Bucshon said. As major employers in many locales, they have “a pretty big voice,” he added.
Discussing CAP’s reasoning behind its support of the VALID Act in a May 26 open letter and podcast, CAP president Emily Volk, MD, said the Valid Act “creates a risk-based system of oversight utilizing three tiers—low, moderate and high risk—in order to target the attention of the FDA oversight.”
While acknowledging that it had room for improvement, she lauded the bill’s three-tier risk-based system, in which tests deemed to have the greatest risks would receive the highest level of scrutiny.
She also noted that the bill exempts existing LDTs from an FDA premarket review “unless there is a safety concern for patients.” It would also exempt “low-volume tests, modified tests, manual interpretation tests, and humanitarian tests,” she wrote.
In addition, the bill would “direct the FDA not to create regulations that are duplicative of regulation under CLIA,” she noted, and “would require the FDA to conduct public hearings on LDT oversight.”
Pros and Cons of the VALID Act
One concern raised by opponents relates to how the VALID Act addressed user fees paid by clinical laboratories to fund FDA compliance activities. But Volk wrote that any specific fees “would need to be approved by Congress in a future FDA user fee authorization bill after years of public input.”
During the May 2022 podcast, Volk also cast CAP’s support as a matter of recognizing political realities.
“We understand that support for FDA oversight of laboratory-developed tests or IVCTs is present on both sides of the aisle and in both houses of Congress,” she said. “In fact, it enjoys wide support among very influential patient advocacy groups.” These groups “are very sophisticated in their understanding of the issues with laboratory-developed tests, and they do have the ear of Congress. There are many in the laboratory community that believe the VALID Act goes too far, but I can tell you that many of these patient groups don’t believe it goes far enough and are actively pushing for even more restrictive paradigms.”
Also urging passage of the bill were former FDA commissioners Scott Gottlieb, MD, and Mark B. McClellan, MD, PhD. In a Dec. 5 opinion piece for STAT, they noted that “diagnostic technologies have undergone considerable advances in recent decades, owing to innovation in fields like genomics, proteomics, and data science.” However, they wrote, laws governing FDA oversight “have not kept pace,” placing the agency in a position of regulating tests based on where they are made—in a medical laboratory or by a manufacturer—instead of their “distinctive complexity or potential risks.”
In their May 22 letter, opponents of the legislation outlined broad areas of concern. They contended that it would create “an onerous and complex system that would radically alter the way that laboratory testing is regulated to the detriment of patient care.” And even though existing tests would be largely exempted from oversight, “the utility of these tests would diminish over time as the VALID Act puts overly restrictive constraints on how they can be modified.”
CLIA Regulation of LDTs also Under Scrutiny
The provision to avoid duplication with the Clinical Laboratory Improvement Amendments (CLIA) program—which currently has some regulatory oversight of LDTs and IVCTs—is “insufficient,” opponents added, “especially when other aspects of the legislation call for requirements and activities that lead to duplicative and unnecessary regulatory burden.”
Opponents to the VALID Act also argued that the definitions of high-, medium-, and low-risk test categories lacked clarity, stating that “the newly created definition of moderate risk appears to overlap with the definition of high risk.”
The opponents also took issue with the degree of discretion that the bill grants to the US Secretary of Health and Human Services. This will create “an unpredictable regulatory process and ambiguities in the significance of the policy,” they wrote, while urging the Senate committee to “narrow the discretion so that stakeholders may better evaluate and understand the implications of this legislation.”
Decades ago, clinical laboratory researchers were allowed to develop assays in tandem with clinicians that were intended to provide accurate diagnoses, earlier detection of disease, and help guide selection of therapies. Since the 1990s, however, an industry of investor-funded laboratory companies have brought proprietary LDTs to the national market. Many recognize that this falls outside the government’s original intent for encouragement of laboratory-developed tests to begin with.
In a federal lawsuit, seven healthcare organizations and hospitals systems allege HHS exceeded its statutory authority and clinical laboratories will want to watch how this court case unfolds
There is quite a brouhaha over the final new federal rule requiring hospitals to allow patients and the public to see the prices they charge for services—including clinical laboratory and anatomic pathology prices. Some very influential hospital associations and healthcare systems are opposing implementation of this rule.
For more than a decade, Dark Daily has
reported on the federal government’s efforts to enact pricing transparency in
healthcare. In many e-briefings, we advised pathologists
and medical
laboratory leaders that the outcome of those efforts will likely affect
clinical laboratory workflows and bottom lines, and that many clinical laboratories
are not prepared to negotiate directly with customers over the price of their
services.
Now, the federal Centers for Medicare and Medicaid Services
(CMS) has passed a final
rule (CMS-1717-F2) that expands on an earlier rule mandating pricing
transparency for hospital procedures—including medical
laboratory and anatomic
pathology services. This new rule requires hospitals to disclose not only
their chargemaster
prices, but also prices negotiated with payers.
Hospital leaders are not pleased by this, and though the
final rule does not go into effect until January 1, 2021, they are already
pushing back through representative organizations such as the American Hospital Association (AHA), which has
brought a lawsuit to federal court that seeks to overturn the new rule.
New Transparency Rules Include Rates Negotiated with Health
Insurers
Beginning Jan. 1, 2019, CMS required hospitals to disclose chargemaster prices to customers. These are essentially the “list prices” for hospital procedures. However, as Dark Daily reported in “California Healthline Report Finds Hospital Chargemaster Prices Fluctuate Dramatically Even Among Hospitals Located Near Each Other,” June 12, 2019, there were problems. Chargemaster prices typically do not reflect the actual fees charged to patients or payers. Thus, consumers still found it problematic to price shop before committing to healthcare.
In an effort to remedy this, the
new 2020 final rule expands the pricing information hospitals are required to
provide and includes several categories of prices negotiated with health insurers.
Simultaneous to this final rule, CMS also announced a
proposed rule (CMS-9915-P) titled, “Transparency
in Coverage,” that if passed, will require health insurers to disclose
pricing for healthcare services as well.
In a federal Department of Health and Human Services (HHS) press
release, the Trump Administration stated that both rules will “increase
price transparency to empower patients and increase competition among all
hospitals, group health plans, and health insurance issuers in the individual
and group markets.”
“Under the status quo, healthcare prices are about as clear
as mud to patients,” said CMS Administrator Seema Verma in the HHS press
release. “This final rule and the proposed rule will bring forward the
transparency we need to finally begin reducing the overall healthcare costs.”
AHA Sues HHS in Federal Court
In response, four hospital organizations and three health
systems filed a
lawsuit in federal court against the HHS. The suit alleges the final rule
“exceeds the agency’s statutory authority,” and violates the First Amendment by
requiring public disclosure of prices negotiated with payers. This information,
they say, is “highly confidential and commercially sensitive.”
In court
documents, the plaintiffs argue that “the Final Rule is arbitrary and
capricious and lacks any rational basis. The agency’s explanation for the Final
Rule runs counter to both logic and evidence. In fact, it is belied by the
agency’s own research regarding what patients care about most when selecting a
hospital: their own out-of-pocket costs. The agency’s justification for the
Final Rule therefore does not stand up to even the barest of scrutiny. That is
the epitome of arbitrary and capricious agency action.”
A brief
filed by the plaintiffs contends that patients’ actual out-of-pocket costs
are determined by a complex set of factors and aren’t reflected in negotiated
rates. In addition, the brief states, “the sheer burden of compliance with the
rule is staggering, and way out of line with any projected benefits associated
with the rule.”
Charles N. Kahn III (above), President and CEO, Federation of American Hospitals (FAH), said in an AHA press release that, “CMS’ final rule fails to offer patients easy-to-understand information regarding their out-of-pocket obligations for care, so we feel obligated to contest the regulation. We contend the agency exceeded its authority and should go back to the drawing board.” (Photo copyright: FAH.)
Details of the Final Rule on Hospital Price Transparency
If it goes forward, starting Jan. 1, 2021, the final rule
requires hospitals to disclose five types of standard charges, according to the
HHS and AHA press releases:
The chargemaster rate, also known as the gross
charge;
The discounted cash price, which CMS defines as
the amount the hospital will accept from self-paying patients;
The payer-specific negotiated charge, defined as
“the charge that the hospital has negotiated with a third-party payer for an
item or service.” This would be the charge that applies if a patient uses an
in-network provider;
The maximum charge negotiated with payers; and
The minimum charge negotiated with payers.
Hospitals must list these charges for all billable “items
and services,” including medical laboratory and pathology services, in a
machine-readable format, such as a CSV file that
can be opened in a spreadsheet program.
In addition, they must provide a “consumer-friendly” list of charges for at least 300 “shoppable services,” defined as services that consumers can schedule in advance. Each list would include 70 services specified by CMS and an additional 230 services selected by the hospital.
The CMS-specified shoppable services include 14 laboratory
and pathology tests. They include:
Basic metabolic panel
Blood test, comprehensive group of blood
chemicals
Obstetric blood test panel
Blood test, lipids (cholesterol and triglycerides)
Kidney function panel test
Liver function blood test panel
Manual urinalysis test with examination using
microscope
Automated urinalysis test
PSA (prostate specific antigen)
Blood test, thyroid stimulating hormone (TSH)
Complete blood cell count, with differential
white blood cells, automated
Complete blood count, automated
Blood test, clotting time
Coagulation assessment blood test
Blood Brother Clinical Laboratories Also Affected by
Price Transparency
Price transparency is also at the center of two federal
lawsuits involving Laboratory Corporation of America (LabCorp) and Quest
Diagnostics. The Dark Report, Dark Daily’s sister publication, reported
on these suits in “Lawsuits
Alleging Overcharges to Proceed in Two Courts in 2020,” December 16, 2019.
The plaintiffs in those cases are uninsured or underinsured
customers who claim they were charged far more for medical laboratory tests
than customers covered by insurance. In both cases, customers were charged at
the chargemaster rates. The plaintiffs contend that the medical laboratories
should have disclosed their rates in advance.
Whichever way this all goes, clinical laboratories will need
to monitor the multiple efforts by the states and the federal government to
make it easy for patients to see the prices of hospital, physician, and other
medical services in advance of treatment. This has the potential to be a disruptive
trend, particularly for hospitals.
Professor-led classroom lectures end as students are expected to do much of their traditional learning outside of class. Will this influence how many medical students go on to choose pathology for their residency?
Medical Colleges, hospital universities, and healthcare trade schools nationwide are considering “Active Learning” techniques to replace lectures. These bastions of higher education—where anatomic pathologists, medical laboratory scientists, doctors, nurses, clinical laboratory technicians, and other healthcare professionals learn their skills—are adopting evidence-based teaching styles that resonate with modern technology-savvy students.
“What we know about learning in general is different than it was decades ago,” Lisa Howley, PhD, AAMC Senior Director of Strategic Initiatives and Partnerships, told Inside Higher Education. “Our medical students are of a generation that has grown up differently when it comes to technology and the impact that has on their ability to receive and retain information.”
Dubbed a “flipped classroom,” students do homework before classes rather than after, as would be done in a traditional education setting. They are expected to learn material online and through textbooks, and then complete self-assessments to gauge their understanding of what they’ve learned. Classroom time involves so-called “active learning,” which includes problem-solving in small groups, question-and-answer sessions, and group discussions.
A growing body of research, such as this study published in the Proceedings of the National Academy of Sciences of the United States of America (PNAS), indicates that active learning improves student performances, especially in science, technology, engineering, and mathematics. With the specialties of pathology and medical laboratory medicine heavily dependent on technology and science, this may be a favorable development for medical students who decided to specialize in these fields.
“We teach evidence-based medicine all the time,” William Jeffries, PhD, Senior Associate Dean for Medical Education at UVM, stated in the Inside Higher Education article. “If you have the evidence to show one treatment is better than the other, you would naturally use that treatment. So, if we know that there are methods superior to lecturing, why are we lecturing at all?”
Kelly J. (McDonough) Butnor, MD (center), Surgical Pathologist and Professor of Pathology and Laboratory Medicine at University of Vermont College of Medicine, conducts a team-based learning session with second-year students. (Photo and caption copyright: The Washington Post, Erin Post, Larner College of Medicine.)
In “Lecture Halls without Lectures—A Proposal for Medical Education,” published in the New England Journal of Medicine (NEJM), Prober and Heath wrote, “Students are being taught roughly the same way they were taught when the Wright brothers were tinkering at Kitty Hawk.” They suggested five years ago that active learning and short online videos were more effective and a better use of students’ limited time than auditorium-style mandatory lectures. Today, with mobile technologies and streaming Internet technologies, their argument is even more valid.
Lack of Funds Blocks Innovation
Jeffries contends the cost of making wholesale changes in how students are taught, which requires retraining faculty and renovating classrooms, keeps most medical schools from overhauling teaching methods. “Most schools do not have the resources to turn the battleship around,” he told Inside Higher Education.
At UVM, however, a $66-million gift last year by Robert Larner, MD, and his wife Helen, is helping fund the school retrain its medical school teaching staff and redesign classroom spaces to support active learning. Larner is a dual-degree alum whose name now adorns the medical school.
In a recent NEJM article, Richard M. Schwartzstein, MD, Professor, Beth Israel Deaconess Medical Center (BIDMC) at Harvard Medical School, and David H. Roberts, MD, Dean for External Education at Harvard Medical School, point out that “the movement away from traditional lecture-based courses has been under way in US medical schools for more than three decades.” They question, however, whether the push to do away with all lectures is “merely the latest fad in medical education” or is it truly evidence-based?
“We can often serve our students best by fusing elements of various methods, such as team-based or case-based learning and interactive large-group learning sessions, rather than feeling obliged to adhere to a particular format,” they wrote. “But we must also use evidenced-based approaches whenever possible and rigorously evaluate our innovations, acknowledging that important outcomes may include student engagement and problem-solving skills, team dynamics, and the learning environment as much as exam scores.”
Prober told the Washington Post that medical school students already vote with their feet for the type of teaching format they prefer.
“When you go into a lecture in medical schools across the nation, you will find a minority of students actually present,” he said. “Medical students are adults. One generally believes adults try to make decisions that are in their best interests. They have seemingly made the decision that it is not in the lectures.”
For the past two decades, many pathologists have regularly pointed out that advances in technologies and procedures in both anatomic pathology and clinical laboratory medicine have outpaced the ability of medical schools and residency programs to incorporate these new developments into training programs. Thus, clinical laboratory scientists and pathologists will be watching with interest to see if these new models for medical school education are capable of incorporating new advances in laboratory medicine into their training formats in a timely fashion.
Patients using a concierge medicine practice expect to pay cash at the time of service, but few medical laboratories are equipped to collect from patients at time of service
One big challenge for clinical laboratories and anatomic pathology groups is how to adapt to the changing role of the consumer in healthcare. It a major goal of healthcare policymakers to have patients pay more out of pocket for clinical care so as to motivate them to select hospitals, physicians, and clinical labs based on a combination of cost and quality.
One sector of healthcare that is benefiting from this consumer-first dynamic is concierge medicine. Statistics show that recent increases in the number of people seeking concierge medicine is changing the way many individuals utilize the healthcare system in the United States. (more…)
Issue does not directly affect clinical laboratories and pathology groups, but puts spotlight on some hospitals and physicians who frequently use these codes.
Could increased use of electronic health records (EHR) systems be causing more hospitals and physicians to commit fraud because of upcoding? That’s the assertion of certain federal health officials. They attribute the increased proportion of Medicare claims for more complex and more expensive services by some providers to be, in some part, acts of fraud.
Most pathologists and clinical laboratory managers will notice the irony in these allegations that providers are upcoding services to Medicare patients in fraudulent ways. After all, the federal government is currently paying billions of dollars in financial incentives to encourage providers to implement and use certified EHR systems with the goal of lowering healthcare costs, while improving patient outcomes.
OIG Audit Findings Are Source of Fraud Allegations
Insinuations of provider fraud came after the public learned of findings of an audit done by Health and Human Services’ Office of Inspector General (OIG). The OIG determined that payments for more complex Level 5 E/M services increased by 21% between 2001 and 2010. During that same period, payments for medium-complexity patient services decreased by 11%.
For all of 2010, the Centers for Medicare and Medicaid Services (CMS) paid out $33.5 billion for E/M billings. This was about one-third of Medicare Part B payments for physician services. These numbers were part of a story published in Modern Healthcare.
Now that much larger numbers of physicians and hospitals are using electronic health record (EHR) systems, Medicare has noticed a steady increase in the proportion of claims submitted at higher and more complex codes, increasing reimbursement. In response to one federal government audit, Kathleen Sebellius, Secretary of Health and Human Services (r) and Attorney General Eric Holder (l) held a joint press conference to announce to healthcare providers that there would be stricter audits of providers who are using billing codes for complex patient visits with greater frequency. (Photo by Manuel Balce Ceneta, copyright Associated Press.)
