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Clinical Laboratories and Pathology Groups

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Mass General Brigham Joins with Best Buy Health to Create Country’s Largest Hospital-at-Home Program

Clinical laboratories with mobile phlebotomy programs are positioned to benefit as demand for at-home blood draws increases

Hospital-at-Home (HaH) models of remote healthcare continue to pick up speed. The latest example comes from the 793-bed Mass General Brigham (MGB) health system which partnered with Best Buy Health to build the largest HaH program in the nation, according to Becker’s Hospital Review. This means clinical laboratories will have new opportunities to provide mobile phlebotomy home-draw services for MGB’s HaH patients.

Headquartered in Somerville, Mass., MGB presented its new “Home Hospital” program at the World Medical Innovation Forum (WMIF) in September.

“The health system now has a capacity for acute hospital care at home of 70 patients and is currently treating about 50 to 60 a day. The goal is to move to 10% of Mass General Brigham’s overall capacity, or about 200 to 300 patients,” Becker’s reported.

Best Buy Health provides MGB’s Home Hospital patients with computer tablets and Internet access, Becker’s noted.

“Healthcare is fragmented, the technology doesn’t always connect. Technology is our expertise,” said Chemu Lang’at, COO, Best Buy Health, during the WMIF presentation.

The hospital is the most expensive site of care in the US healthcare industry. Thus, preventing patients from needing to be hospitalized—or treating them in their homes—could reduce the cost of care considerably for both patients and multihospital systems.

“It’s been estimated that 30% of inpatient care will move to the home in the next five years, representing $82 billion in revenue. This is a tremendous opportunity,” said Heather O’Sullivan, MS, RN, A-GNP, Mass General Brigham’s President of Healthcare at Home, during MGB’s presentation at the World Medical Innovation Forum in September, according to Becker’s Hospital Review. MGB’s HaH program offers clinical laboratories with new opportunities to provide mobile phlebotomy services to the health system’s Hospital-at-Home patients. (Photo copyright: Mass General Brigham.)

Hospital-at-Home

Proponents of HaH call it a “sustainable, innovative, and next-generation healthcare model. [It is] person-centered medical care that keeps patients out of the hospital, away from possible complications, and on to better outcomes,” RamaOnHealthcare reported.

Some of the biggest payoffs of HaH include:

• Cost Savings: Anne Klibanski, MD, President and CEO, MGB, described the HaH program as “a way the health system could stay afloat and thrive amid financial challenges affecting the industry, with lower costs and better outcomes for patients at home,” Becker’s Hospital Review reported.

• Increased Capacity: Having an HaH program can help alleviate bed shortages by treating many conditions in patient’s homes rather than in the ER. “The program … typically treats patients with conditions like COPD flare-ups, heart failure exacerbations, acute infections and complex cellulitis,” Becker’s reported.

“It’s not typically comfortable to be cared for in the emergency room,” said O’Neil Britton, MD, MGB’s Chief Integration Officer, at WMIF.

• Decreased Staff Exhaustion: “Clinicians have described getting an extra level of joy from treating patients at home,” said Jatin Dave, MD, CMO, MassHealth, at WMIF. He added that this could provide one solution to healthcare burnout, Becker’s noted.

• Lab Connection: Clinical laboratories have the opportunity to meet the need for mobile phlebotomists to draw blood specimens from HaH patients in their homes.

• Patient Satisfaction: “The data suggests that for populations studied in multiple areas, [HaH] is a safe service with high-quality care, low readmission rates, low escalation rates, low infection rates and—bottom line—patients love it.” Adam Groff, MD, co-founder of Maribel Health, told RamaOnHealthcare.

HaH Program Going Forward

Britton told the WMIF audience that MGB hopes to “expand the program for surgery, oncology, and pain management patients, recently admitting its first colorectal surgery patient,” Becker’s reported.

However, the future of MGB’s HaH program is not assured. “The Centers for Medicare and Medicaid Services (CMS) waiver to provide acute hospital care at home expires at the end of 2024. A bill to extend the program recently passed a House committee,” Becker’s reported.

Dave said at WMIF that he “hopes the home will one day provide a ‘single infrastructure’ for all levels of care: from primary to inpatient care to skilled nursing,” Becker’s Hospital Review noted, adding, “The home is where, in the long run, we can have this full continuum.”

Hospital-at-Home programs are not new. In “Best Buy Health and Atrium Health Collaborate on a Hospital-at-Home Program, Leveraging the Electronics Retailer’s ‘Specially Trained’ Geek Squad, Omnichannel Expertise,” Dark Daily covered how Best Buy Health had partnered with 40-hospital Atrium Health in an HaH program that the healthcare system plans to scale nationally.

And in “Orlando Health’s New Hospital-in-the-Home Program Brings Quality Healthcare to Patients in the Comfort of their Homes,” we reported how 3,200-bed Orlando Health had launched its Hospital Care at Home program to provide patients in central Florida acute care outside of traditional hospital settings.

Overall, this can be a snapshot of where the HaH movement in the US is currently at, with the Mass General Brigham example showing that this mode of healthcare is delivering results and helping patients. Clinical laboratories across the nation should track efforts by hospitals and health systems in their areas to establish and expand hospital-at-home programs.

—Kristin Althea O’Connor

Related Information:

How Mass General Brigham Built the Largest ‘Hospital at Home’

‘Society Will Greatly Benefit’ from the Transformative Hospital-at-Home Movement

Are Hospital at Home Programs Forgetting about the Patient?

Best Buy Health and Atrium Health Collaborate on a Hospital-at-Home Program, Leveraging the Electronics Retailer’s ‘Specially Trained’ Geek Squad, Omnichannel Expertise

Orlando Health’s New Hospital-in-the-Home Program Brings Quality Healthcare to Patients in the Comfort of their Homes

Kaiser Family Foundation Reports on Prior Authorization Denial Rates by Medicare Advantage Plans

Another report finds nearly half of all healthcare systems planning to opt out of Medicare Advantage plans because of issues caused by prior authorization requirements

Prior-authorization is common and neither healthcare providers (including clinical laboratories) nor Medicare Advantage (MA) health plans are happy with the basic process. Thus, labs—which often must get prior-authorization for molecular diagnostics and genetic tests—may learn from a recent KFF study of denial rates and successful appeals.

“While prior authorization has long been used to contain spending and prevent people from receiving unnecessary or low-value services, it also has been [the] subject of criticism that it may create barriers to receiving necessary care,” KFF, a health policy research organization, stated in a news release.

Nearly all MA plan enrollees have to get prior authorization for high cost services such as inpatient stays, skilled nursing care, and chemotherapy. However, “some lawmakers and others have raised concerns that prior authorization requirements and processes, including the use of artificial intelligence to review requests, impose barriers and delays to receiving necessary care,” KFF reported.

“Insurers argue the process helps to manage unnecessary utilization and lower healthcare costs. But providers say prior authorization is time-consuming and delays care for patients,” Healthcare Dive reported.

“There are a ton of barriers with prior authorizations and referrals. And there’s been a really big delay in care—then we spend a lot of hours and dollars to get paid what our contracts say,” said Katie Kucera (above),Vice President and CFO, Carson Tahoe Health, Carson City, Nev., in a Becker’s Hospital CFO Report which shared the health system’s plan to end participation in UnitedHealthcare commercial and Medicare Advantage plans effective May 2025. Clinical laboratories may want to review how test denials by Medicare Advantage plans, and the time cost of the appeals process, affect the services they provide to their provider clients. (Photo copyright: Carson Tahoe Health.)

Key Findings of KFF Study

To complete its study, KFF analyzed “data submitted by Medicare Advantage insurers to CMS to examine the number of prior authorization requests, denials, and appeals for 2019 through 2022, as well as differences across Medicare Advantage insurers in 2022,” according to a KFF issue brief.

Here are key findings:

  • Requests for prior authorization jumped 24.3% to 46 million in 2022 from 37 million in 2019.
  • More than 90%, or 42.7 million requests, were approved in full.
  • About 7.4%, or 3.4 million, prior authorization requests were fully or partially denied by insurers in 2022, up from 5.8% in 2021, 5.6% in 2020, and 5.7% in 2019.
  • About 9.9% of denials were appealed in 2022, up from 7.5% in 2019, but less than 10.2% in 2020 and 10.6% in 2021.
  • More than 80% of appeals resulted in partial or full overturning of denials in the years studied. Still, “negative effects on a person’s health may have resulted from delay,” KFF pointed out.

KFF also found that requests for prior authorization differed among insurers. For example:

  • Humana experienced the most requests for prior authorization.
  • CVS plans had the highest denial rate with 13%.
  • Anthem had the lowest with 4.2%.

Among all MA plans, the share of patients who appealed denied requests was small. The low rate of appeals may reflect Medicare Advantage plan members’ uncertainty that they can question insurers’ decisions, KFF noted.

Providers Opt Out of MA Market

Nearly 33 million people are members of Medicare Advantage plans, and seniors have about 40 different plans to choose from in 2025, according to the American Association for Medicare Supplement Insurance.

It’s a big market. Nevertheless, “between onerous authorization requirements and high denial rates, healthcare systems are frustrated with Medicare Advantage,”  according to a Healthcare Financial Management Association (HFMA) survey of 135 health system Chief Financial Officers.

According to the CFOs surveyed, 19% of healthcare systems stopped accepting one or more Medicare Advantage plans in 2023, and 61% are planning or considering ending participation in one or more plans within two years.

“Nearly half of health systems are considering dropping Medicare Advantage plans,” Becker’s reported.

Federal lawmakers acted, introducing three bills to help improve timeliness, transparency, and criteria used in prior authorization decision making. Starting in 2023, KFF reported, the federal Centers for Medicare and Medicaid Services (CMS) published final rules on the bills:

Rule One (effective June 5, 2023), “clarifies the criteria that may be used by Medicare Advantage plans in establishing prior authorization policies and the duration for which a prior authorization is valid. Specifically, the rule states that prior authorization may only be used to confirm a diagnosis and/or ensure that the requested service is medically necessary and that private insurers must follow the same criteria used by traditional Medicare. That is, Medicare Advantage prior authorization requirements cannot result in coverage that is more restrictive than traditional Medicare.”

Rule Two (effective April 8, 2024), is “intended to improve the use of electronic prior authorization processes, as well as the timeliness and transparency of decisions, and applies to Medicare Advantage and certain other insurers. Specifically, it shortens the standard time frame for insurers to respond to prior authorization requests from 14 to seven calendar days starting in January 2026 and standardizes the electronic exchange of information by specifying the prior authorization information that must be included in application programming interfaces starting in January 2027.”

Rule Three (effective June 3, 2024), requires “Medicare Advantage plans to evaluate the effect of prior authorization policies on people with certain social risk factors starting with plan year 2025.”

KFF’s report details how prior authorization affects patient care and how healthcare providers struggle to get paid for services rendered by Medicare Advantage plans amid the rise of value-based reimbursements.

Clinical laboratory leaders may want to analyze their test denials and appeals rates as well and, in partnership with finance colleagues, consider whether to continue contracts with Medicare Advantage health plans.

—Donna Marie Pocius

Related Information:

Use of Prior Authorization in Medicare Advantage Exceeded 46 Million Requests in 2022

Medicare Advantage Plans Denied a Larger Share of Prior Authorization Requests in 2022 than in Previous Years

Medicare Advantage Prior Authorization Denials Increased in 2022

One of the Worst Situations a CFO Can Be In: Inside a System’s Split with UnitedHealth

2024 CFO Pain Points Study

One Health System’s Secret to Medicare Advantage Success

Patient Rights Group Says Too Many Hospitals Are Not Complying with CMS Price Transparency Rules

Only about a third of the hospitals surveyed are in full compliance with giving public access to prices, the watchdog group contends, but the AHA disputes its methodology

It’s been almost four years since the Centers for Medicare and Medicaid Services (CMS) enacted its Hospital Price Transparency rule which requires hospitals—including their medical laboratories—to make their prices available and easily accessible to the public. But according to a 2024 report from PatientRightsAdvocate.org (PRA), just 34.5% of reviewed hospitals are fully compliant with the transparency rule. That’s a slight decrease from the 36% compliance rate the PRA listed in its 2023 report, the watchdog group stated in a blog post.

Released on Feb. 29, this was the group’s sixth semi-annual hospital price transparency report since the CMS rule took effect in 2021.

The rule “requires hospitals to post all prices online, easily accessible and searchable, in the form of (i) a single machine-readable standard charges file for all items, services, and drugs by all payers and all plans, the de-identified minimum and maximum negotiated rates, and all discounted cash prices, as well as (ii) prices for the 300 most common shoppable services either as a consumer-friendly standard charges display listing actual prices or, alternatively, as a price estimator tool,” the report states.

The required viewable prices are to be for, among others, medical imaging, clinical laboratory testing, and outpatient procedures such as a colonoscopies, etc.

“With full transparency, consumers can benefit from competition to make informed decisions, protect from overcharges, billing errors, and fraud, and lower their costs,” the report states. “Employer and union plans can use pricing and claims data to improve their plan designs and direct members to lower cost, high-quality facilities. However, continued noncompliance impedes this ability.”

At any time, the US Department of Justice (DOJ) could decide to file charges against a hospital or a clinical laboratory for not posting their prices on their websites in compliance with the federal rule. Such an action by DOJ officials would be to specifically put the entire industry on notice that there will be consequences for non-compliance.

The PRA’s report provides hospitals and clinical laboratories with a reminder that consumer watchdogs are also monitoring compliance.

“Our comprehensive study of 2,000 hospitals indicates nearly two-thirds (65.5%) of hospitals reviewed continue failing to fully comply with the rule, yet the Centers for Medicare and Medicaid Services (CMS) has only fined fourteen hospitals for noncompliance out of the thousands found to not be meeting all of the rule’s requirements. When hospitals don’t post their prices, they can charge whatever they want,” wrote PRA Founder and Chairman Cynthia Fisher (above) in a letter to President Biden. Hospital medical laboratories are also required to post their prices for tests. (Photo copyright: PatientRightsAdvocate.org.)

Increasing Penalties for Non-compliance

In a March 18 Health Affairs blog post on price transparency, two healthcare policy experts—David Muhlestein, PhD, JD, Chief Research Officer at Leavitt Partners, Washington, DC, and Adjunct Assistant Professor of The Dartmouth Institute (TDI) at the Geisel School of Medicine at Dartmouth College; and Yuvraj Pathak, PhD, Associate Director at West Health—argued that CMS should increase penalties for non-compliance, so the dollar amounts are greater than the cost of compliance.

To compile their report, PRA analysts examined the websites of 2,000 US hospitals between September 3, 2023, and January 13, 2023, and found that 1,311, or 65.5%, were not in full compliance, mostly due to “missing or significantly incomplete pricing data,” the report states.

More than 6,000 licensed hospitals operate in the US, the report notes. The group said it focused on hospitals owned by the largest US health systems.

Among the notable findings:

  • The 2023 report found that 98% of Kaiser Permanente’s 42 hospitals were in full compliance with the rule, but in the 2024 study, none were compliant because the hospitals began posting multiple files instead of a single file.
  • In total, 103 hospitals rated as noncompliant in the previous report were found to be compliant in the new analysis. Conversely, 135 hospitals previously rated as compliant were listed as noncompliant in the 2024 report.

The report lauded three hospitals for posting “exemplary files” that were “easily accessible, downloadable, machine-readable, and including all negotiated rates by payer and plan.” Those were Cape Cod Hospital in Hyannis, Mass.; Christus Santa Rosa Medical Center in San Antonio; and UW Health University Hospital in Madison, Wis.

In its discussion of the findings, PRA called on CMS to step up enforcement of the pricing transparency rule. The group also wants the government to close what it describes as the “estimator tool loophole,” which allows hospitals to list non-binding price estimates and price ranges instead of concrete prices.

“Price estimator tools do not achieve the goals of price transparency policy and fundamentally undermine the intent of the regulations,” the PRA’s report contends.

AHA Pushes Back on PRA Assessment

The American Hospital Association (AHA) took issue with PRA’s methodology, as Dark Daily reported in “CMS Proposes New Amendments to Federal Hospital Price Transparency Rule That May Affect Clinical Laboratories and Pathology Groups.”

In response to the 2023 PRA report, AHA Group Vice President for Public Policy Molly Smith issued the following statement, “Once again, Patient Rights Advocate has put out a report that blatantly misconstrues, ignores, and mischaracterizes hospitals’ compliance with federal price transparency regulations. The AHA has repeatedly debunked point-by-point Patient Rights Advocate’s intentionally misleading ‘reports’ on price transparency.”

Citing CMS data, Smith said that as of 2022, 70% of US hospitals had complied with two key federal rules:

  • One requiring hospitals to post machine-readable files with pricing information.
  • The other mandating a list of prices for at least 300 “shoppable” services.

More than 80% of hospitals had complied with at least one of the rules, she contended in an AHA press release.

Speaking to the New Orleans Times-Picayune, PRA Founder and Chairman Cynthia Fisher said her group performs a more in-depth study of pricing data compared with CMS.

“They did not do a comprehensive review,” she told the publication. “We do a deep dive for full compliance.”

The PRA study came on the heels of a January report from Turquoise Health that offered a rosier assessment of hospital compliance, albeit with different criteria. According to the Turquoise report, as of Dec. 15, 2023:

  • 90.7% of 6,357 US hospitals had posted machine-readable files,
  • 83.1% posted information about negotiated rates, and
  • 77.3% posted cash rates.

The Turquoise Health end-to-end price transparency platform uses a 5-point system to rate the quality of hospitals’ machine-readable files and said that more than 50% scored five stars. Clinical laboratory managers and pathologists may find it timely to review their lab organization’s compliance with this federal price transparency rule.

—Stephen Beale

Related Information:

Just 34.5% of Reviewed Hospitals Fully Compliant with Federally-Mandated Price Transparency Rule

Sixth Semi-Annual Hospital Price Transparency Compliance Report

Improving Hospital Compliance with Price Transparency Rules

Only Half of LA Hospitals Publish Prices as Required by Law, Hindering Patient Choice

34.5% of Hospitals Complying with Price Transparency Rule, Report Says

Little Progress Made with Hospital Price Transparency Compliance

CMS Releases Tool to Validate Price Transparency File Compliance

Hospital Price Transparency Compliance Dips: Report

Hospitals Backslide on Price Transparency Test

Moving into 2024: State of Price Transparency

Hospitals Finally Reached Widespread Price Transparency Compliance in 2023

More Hospitals, Payers Compliant with Price Transparency Laws

Ex-Theranos Founder and CEO Elizabeth Holmes Reduced Her Prison Sentence by Nearly Two Years

Good behavior in federal prison by the disgraced founder of the now-defunct clinical laboratory company earned her the reduction in her original sentence of 11 years

Elizabeth Holmes, founder of failed clinical laboratory blood analysis company Theranos, continues to serve a lengthy term in prison after being convicted of multiple counts of fraud in 2022. However, now comes news that good behavior at her federal prison has shortened her sentence by nearly two years, according to NBC News.

The latest reduction took Holmes’ release from December 2032 to August 2032 in her “11-plus-year (135 month) prison sentence for wire fraud and conspiracy,” NBC reported, adding that Holmes, though Theranos, “defrauded investors out of hundreds of millions of dollars.”

Holmes entered FPC Bryan, a federal prison camp in Bryan, Texas, to begin serving her term in May 2023.

“Holmes had her sentence computation done within the first 30 days of arriving at Bryan,” Forbes reported. Given Good Conduct Time (GCT), Holmes was given 608 days off calculated from the start of her sentence. “If she were to incur a disciplinary infraction, some of those days can be taken away. Most all prisoners receive 54 days per year of GCT based on the sentence imposed,” Forbes added.

The Federal Bureau of Prisons (BOP) can additionally shave off up to a year through its Residential Drug Abuse Program (RDAP). “To qualify, the prisoner must not have a disqualifying offense, such as terrorism or gun charge, and voluntarily provided information that they had a drug or alcohol problem prior to their arrest. This disclosure has to be done prior to sentencing during the pre-sentence interview and must be also documented in the Presentence Report, a detailed report used by the BOP to determine things like classification and programming for the prisoner,” Forbes noted.

Additionally, the federal First Step Act, which President Trump signed into law in 2018, enables Holmes to “earn up to 365 days off any imposed sentence by participating in prison programming such as a self-improvement classes, a job, or religious activities,” Forbes reported.

Given the opportunities to shave time off her sentence, Holmes may ultimately serve just 66 months of her original 135 month sentence in federal prison.

Elizabeth Holmes (above) taken backstage at TechCrunch Disrupt San Francisco 2014 when Holmes was at the height of her fame and popularity. At this point, Theranos’ Edison blood testing device had not yet been shown to be a fake. But evidence was mounting as clinical laboratory scientists and anatomic pathologists became aware of the technology’s shortcomings. (Photo copyright: Max Morse/Wikimedia Commons.)

Fall of a Silicon Valley Darling

Theranos boasted breakthrough technology and became an almost overnight sensation in Silicon Valley when it burst onto the scene in 2003. Holmes, a then 19-year-old Stanford University dropout, claimed Theranos would “revolutionize the world of blood testing by reducing sample sizes to a single pin prick,” Quartz reported.

The height of the company saw Theranos valued at $9 billion, which came crashing down when the Wall Street Journal reported in 2015 that questionable accuracy and procedures were being followed by the company, CNN reported.

In “After AACC Presentation, Elizabeth Holmes and Theranos Failed to Convince Clinical Laboratory Scientists and the News Media about Quality of Its Technology,” Dark Daily’s Editor-in-Chief Robert Michel reported on Holmes’ presentation at the American Association of Clinical Chemistry (AACC) annual meeting in 2016, after which the clinical laboratory scientists in attendance were highly skeptical of Holmes’ claims.

“From the moment Holmes concluded her presentation and stepped off the podium on Monday afternoon, she, her company, and her comments became the number one subject discussed by attendees in the halls between sessions and in the AACC exhibit hall,” Michel wrote, adding, “The executive team and the investors at Theranos have burned through their credibility with the media, the medical laboratory profession, and the public. In the future, the company’s claims will only be accepted if presented with scientific data developed according to accepted standards and reviewed by credible third parties. Much of this data also needs to be published in peer-reviewed medical journals held in highest esteem.”

A follow-up Dark Daily ebriefing concerning Theranos covered a fraud settlement with the Securities and Exchange Commission (SEC), sanctions from the Centers for Medicare and Medicaid Services (CMS), investor lawsuits, consumer lawsuits, and a settlement with Walgreens over claims about Theranos’ Edison portable blood analyzer. Theranos’ web of lies was unraveling.

Theranos Saga Continues

Ultimately, investors who had jumped in early with financial support for Theranos were defrauded of hundreds of millions of dollars and Holmes was sentenced to 11 years/three months behind bars. 

“Theranos had only ever performed roughly a dozen of the hundreds of tests it offered using its proprietary technology, and with questionable accuracy. It also came to light that Theranos was relying on third-party manufactured devices from traditional blood testing companies rather than its own technology,” CNN added.

The company shut down in 2018.

And so, the Elizabeth Holmes saga continues with reductions in her prison sentence for “good behavior.” The irony will likely not be lost on the anatomic pathologists, clinical laboratory scientists, and lab managers who followed the federal trials.

—Kristin Althea O’Connor

Related Information:

Elizabeth Holmes Sees More Months Trimmed from Prison Release Date

Theranos Founder Elizabeth Holmes’ Prison Sentence Keeps Getting Shorter

Hot Startup Theranos Has Struggled with Its Blood-Test Technology

Elizabeth Holmes Shaves More Time Off Her Sentence

The Infatuation with Elizabeth Holmes’ Prison Term

After AACC Presentation, Elizabeth Holmes and Theranos Failed to Convince Clinical Laboratory Scientists and the News Media about Quality of Its Technology

Previously High-Flying Theranos Provides Clinical Laboratories and Pathology Groups with Valuable Lesson on How Quickly Consumer Trust Can Be Lost

Preparing for Z-Codes as DEX Genetic Testing Registry Rolls Out to Commercial Health Plans

Palmetto GBA’s Chief Medical Officer will cover how clinical laboratories billing for genetic testing should prepare for Z-Codes at the upcoming Executive War College in New Orleans

After multiple delays, UnitedHealthcare (UHC) commercial plans will soon require clinical laboratories to use Z-Codes when submitting claims for certain molecular diagnostic tests. Several private insurers, including UHC, already require use of Z-Codes in their Medicare Advantage plans, but beginning June 1, UHC will be the first to mandate use of the codes in its commercial plans as well. Molecular, anatomic, and clinical pathologist Gabriel Bien-Willner, MD, PhD, who oversees the coding system and is Chief Medical Officer at Palmetto GBA, expects that other private payers will follow.

“A Z-Code is a random string of characters that’s used, like a barcode, to identify a specific service by a specific lab,” Bien-Willner explained in an interview with Dark Daily. By themselves, he said, the codes don’t have much value. Their utility comes from the DEX Diagnostics Exchange registry, “where the code defines a specific genetic test and everything associated with it: The lab that is performing the test. The test’s intended use. The analytes that are being measured.”

The registry also contains qualitative information, such as, “Is this a good test? Is it reasonable and necessary?” he said.

Bien-Willner will answer those questions and more at the upcoming annual Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management in New Orleans on April 30-May 1. Lab professionals still have time to register and attend this important presentation.

Molecular, anatomic, and clinical pathologist Gabriel Bien-Willner, MD, PhD (above), Palmetto GBA’s Chief Medical Officer, will speak about Z-Codes and the MolDX program during several sessions at the upcoming Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management taking place in New Orleans on April 30-May 1. Clinical laboratories involved in genetic testing will want to attend these critical sessions. (Photo copyright: Bien-Willner Physicians Association.)

Palmetto GBA Takes Control

Palmetto’s involvement with Z-Codes goes back to 2011, when the company established the MolDX program on behalf of the federal Centers for Medicare and Medicaid Services (CMS). The purpose was to handle processing of Medicare claims involving genetic tests. The coding system was originally developed by McKesson, and Palmetto adopted it as a more granular way to track use of the tests.

In 2017, McKesson merged its information technology business with Change Healthcare Holdings LLC to form Change Healthcare. Palmetto GBA acquired the Z-Codes and DEX registry from Change in 2020. Palmetto GBA had already been using the codes in MolDX and “we felt we needed better control of our own operations,” Bien-Willner explained.

In addition to administering MolDX, Palmetto is one of four regional Medicare contractors who require Z-Codes in claims for genetic tests. Collectively, the contractors handle Medicare claims submissions in 28 states.

Benefits of Z-Codes

Why require use of Z-Codes? Bien-Willner explained that the system addresses several fundamental issues with molecular diagnostic testing.

“Payers interact with labs through claims,” he said. “A claim will often have a CPT code [Current Procedural Technology code] that doesn’t really explain what was done or why.”

In addition, “molecular diagnostic testing is mostly done with laboratory developed tests (LDTs), not FDA-approved tests,” he said. “We don’t see LDTs as a problem, but there’s no standardization of the services. Two services could be described similarly, or with the same CPT codes. But they could have different intended uses with different levels of sophistication and different methodologies, quality, and content. So, how does the payer know what they’re paying for and whether it’s any good?”

When the CPT code is accompanied by a Z-Code, he said, “now we know exactly what test was done, who did it, who’s authorized to do it, what analytes are measured, and whether it meets coverage criteria under policy.”

The process to obtain a code begins when the lab registers for the DEX system, he explained. “Then they submit information about the test. They describe the intended use, the analytes that are being measured, and the methodologies. When they’ve submitted all the necessary information, we give the test a Z-Code.”

Then, the test undergoes a technical assessment. Bien-Willner described this as a risk-based process where complex tests, such as those employing next-generation sequencing or gene expression profiling, get more scrutiny than less-complex methodologies such as a polymerase chain reaction (PCR) test.

The assessment could be as simple as a spreadsheet that asks the lab which cancer types were tested in validation, he said. On the other end of the scale, “we might want to see the entire validation summary documentation,” he said.

Commercial Potential

Bien-Willner joined the Palmetto GBA in 2018 primarily to direct the MolDX program. But he soon saw the potential use of Z-Codes and the DEX registry for commercial plans. “It became instantly obvious that this is a problem for all payers, not just Medicare,” he said.

Over time, he said, “we’ve refined these processes to make them more reproducible, scalable, and efficient. Now commercial plans can license the DEX system, which Z-Codes are a part of, to better automate claims processing or pre-authorizations.”

In 2021, the company began offering the coding system for Medicare Advantage plans, with UHC the first to come aboard. “It was much easier to roll this out for Medicare Advantage, because those programs have to follow the same policies that Medicare does,” he explained.

As for UHC’s commercial plans, the insurer originally planned to require Z-Codes in claims beginning Aug. 1, 2023, then pushed that back to Oct. 1, according to Dark Daily’s sister publication The Dark Report.

Then it was pushed back again to April 1 of this year, and now to June 1.

“The implementation will be in a stepwise fashion,” Bien-Willner advised. “It’s difficult to take an entirely different approach to claims processing. There are something like 10 switches that have to be turned on for everything to work, and it’s going to be one switch at a time.”

For Palmetto GBA, the commercial plans represent “a whole different line of business that I think will have a huge impact in this industry,” he said. “They have the same issues that Medicare has. But for Medicare, we had to create automated solutions up front because it’s more of a pay and chase model,” where the claim is paid and CMS later goes after errors or fraudulent claims.

“Commercial plans in general just thought they could manually solve this issue on a claim-by-claim basis,” he said. “That worked well when there was just a handful of genetic tests. Now there are tens of thousands of tests and it’s impossible to keep up.

They instituted programs to try to control these things, but I don’t believe they work very well.”

Bien-Willner is scheduled to speak about Palmetto GBA’s MolDX program, Z-Codes, and related topics during three sessions at the upcoming 29th annual Executive War College conference. Clinical laboratory and pathology group managers would be wise to attend his presentations. Visit here (or paste this URL into your browser: https://www.executivewarcollege.com/registration) to learn more and to secure your seat in New Orleans.

—Stephen Beale

Related Information:

Palmetto Issuing ‘Z-Codes’ to Track Molecular Dx Utilization, Gather Data CPT Codes Can’t Provide

McKesson and Change Healthcare Complete the Creation of New Healthcare Information Technology Company

UnitedHealthcare Commercial: Reimbursement Policy Update Bulletin: January 2024

UnitedHealthcare’s Z-Code Requirement for Genetic Testing Claims Impacts Laboratories and Payers

UHC Delays April 1st Z-Code Commercial Implementation to June 1, 2024

UHC Will Delay Enforcement of Z-Codes for Genetic Test Claims

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