However, effective communication can bring more harmony to medical lab managers and scientists when it comes to compliance
Depending on how lab professionals view it, clinical laboratory regulations can be characterized as a series of checklists to fill out or an opportunity to grow an organization.
Leaning into the latter option will preserve regulatory compliance while also ensuring the operational health of the clinical laboratory.
At the Lab Manager Leadership Summit, Kelly VanBemmel, MS, MB(ASCP)CM (above) pressed attendees to open the lines of communication between bench scientists and lab managers when it comes to clinical laboratory regulations. (Photo copyright: Scott Wallask.)
‘There’s a Gap’ in How Both Sides View Regulatory Compliance
VanBemmel spent her presentation aiming to bridge the rift between how bench scientists look at clinical laboratory regulations compared to the views of medical lab managers.
“There’s a gap between how staff experience regulations and how management does,” she noted. “Staff typically think of compliance as a checklist to do their jobs.” Managers, however, need to understand a wider compliance picture. She illustrated her point by comparing views on the following regulatory bodies.
Staff understand that the FDA clears tests and devices for use in non-research environments, though not all consumables or equipment are in that setting.
Managers understand that the FDA develops rules and guidance for CLIA complexity categorization.
Communication Leads to Common Ground with Clinical Laboratory Regulations
Given the above differences among managers and staff, VanBemmel explained that both sides must frequently talk to each other to fill in the missing details.
“When you’re in the thick of regulations, communication becomes critical,” she said.
For example, bench staff may feel it is solely their manager’s responsibility to comply with clinical laboratory regulations. Savvy lab leaders will point out non-compliant conditions—such as diagnostic analyzer malfunctions and sample cross contamination—over which bench staff have direct control, helping workers better understand their responsibility when it comes to compliance.
On the other hand, lazy communication from managers to their bench scientists can stunt compliance efforts. She recalled a prior supervisor who often answered questions about regulations by asking: What does the standard operation procedure state?
“That answer wasn’t particularly helpful,” VanBemmel recalled. “That made me think that my supervisor didn’t understand nuance.”
Thorough communication builds greater trust, and seasoned clinical laboratory professionals of all ranks will quickly recognize the compliance benefits when the worker-manager relationship gels.
Disclosures, mandated by the Affordable Care Act, provide a limited snapshot of claim denials
Claim denials have created financial headaches for virtually all healthcare providers, including clinical laboratories and anatomic pathology groups. Reliable data about denials is hard to come by, but a recent analysis by KFF (formerly the Kaiser Family Foundation) revealed that insurers selling plans on HealthCare.gov denied 19% of claims for in-network services in 2023, the latest year for which data is available.
This is the highest rate since 2015, when KFF began tracking the data, according to the analysis. Claim denials for out-of-network services were even higher, amounting to 37%.
Patients and doctors “are saying that it’s become an even bigger hassle in recent years than it has been in the past,” said Kaye Pestaina, JD, co-author of the report, in a video report from CNBC. Pestaina is a KFF vice president and director of the organization’s program on patient and consumer protection.
The analysis, released Jan. 27, noted that the Affordable Care Act (ACA) requires insurers to provide data about health plans to state and federal regulators as well as the public. “However, federal implementation of this requirement has so far been limited to qualified health plans (QHP) offered on the federally facilitated Marketplace (HealthCare.gov) and does not include QHPs offered on state-based Marketplaces or group health plans.”
“One thing that we’ve seen [when] surveying consumers across different insurance types is that they simply don’t know that they have an appeal right,” said Kaye Pestaina, JD (above), VP and director of KFF’s program on patient and consumer protection, in a video report from CNBC. “If appeals were used more often, it might operate as a check on carriers. From what we can see now, so few are appealed, so it’s not operating as a check.” Clinical laboratories and anatomic pathology groups don’t often see data about the rate of claims denials by payers made public. (Photo copyright: KFF.)
Scarce Information
The federal marketplace covers 32 states, which means that the data does not include the 18 other states or the District of Columbia, all of which have their own exchanges. Nor does it include employer-sponsored plans, Medicare Advantage plans, or Medicaid Managed Care plans.
“In the big picture, we’re still operating from a scarce amount of information about how carriers review claims,” Pestaina told the Minneapolis Star-Tribune.
Within this limited dataset, KFF found wide variation in denial rates among the parent companies of health plans. The companies with the highest rates were as follows:
Rates also varied by state, from a high of 34% in Alabama to a low of 6% in South Dakota. However, the report noted that these averages sometimes obscured wide variations within each state. For example, in Florida, the statewide average was 16%, but denial rates for individual insurers ranged from 8% to 54%.
In most cases, in-network denial rates did not vary much based on plan levels. Rates were 15% for Platinum plans, compared with 18% for Silver and Gold plans, and 19% for Bronze plans. The rate for catastrophic plans was 27%.
The data offered only limited insights about the reasons for claim denials. The federal Centers for Medicare and Medicaid Services (CMS), which administers the rules, requires plans to report denial reasons, but it allows for an “Other” category that accounts for the largest number of denials:
Other reason not listed – 34%
Administrative reason – 18%
Service excluded – 16%
Enrollee benefit limit reached – 12%
Lack of referral or prior authorization – 9%
Not medically necessary (excluding behavioral health) – 5%
Member not covered – 5%
Not medically necessary (behavioral health only) – 1%
“We hear anecdotal stories about certain treatments that are denied, that arguably should not have been denied,” Pestaina told the Star-Tribune. “How often is that happening? It’s difficult to come to a conclusion with the kind of ‘reason’ information we have here.”
Health Insurers Pushback
In addition to claim denials, CMS requires insurers to report the number of appeals once a claim has been denied.
“As in KFF’s previous analysis of federal claims denial data, we find that consumers rarely appeal denied claims and when they do, insurers usually uphold their original decision,” the report states.
In total, insurers on the federal exchange denied 73 million in-network claims. Among these, less than 1% (376,527) were appealed internally to the insurers, which upheld 56% of the denials.
The report notes that, in some cases, consumers have a right to an external appeal in which a third party reviews the claim. However, in a separate survey, KFF found that only 40% of all consumers, and 34% of Marketplace enrollees, were aware of that right.
Health insurers pushed back on KFF’s analysis. In a statement reported by the Star-Tribune, UnitedHealth Group described the numbers as “grossly misleading” because the dataset represents only 2% of total claims.
“Across UnitedHealthcare, we ultimately pay 98% of all claims received that are for eligible members, when submitted in a timely manner with complete, non-duplicate information,” the company stated. “For the 2% of claims that are not approved, the majority are instances where the services did not meet the benefit criteria established by the plan sponsor, such as the employer, state or Centers for Medicare and Medicaid Services.”
Holmes says life in prison is ‘Hell’ and that Theranos was a failure but ‘not fraud’
For some reason disgraced Theranos founder and ex-CEO Elizabeth Holmes, in a lengthy interview with People magazine, described life in prison while raising her two children even as a three-judge panel of the US 9th Circuit Court of Appeals affirmed her conviction and 11.25-year sentence for fraud.
In June of 2024, Holmes’ defense team appealed to have her conviction overturned due to alleged errors in her trial. According to court documents containing the federal judges’ decisions, her attorneys argued that:
Former Theranos employees who testified as lay witnesses should not have been allowed to offer improper expert testimony.
The court abused its discretion by allowing testimony that Theranos voided all patient sample tests run on a device used in Theranos’s clinical laboratory.
Her rights were violated under the Confrontation Clause of the Sixth Amendment when she was prohibited from cross-examining a former Theranos laboratory director on aspects of his post-Theranos employment.
In February 2025, the judges rejected all points and denied her appeal. Holmes is serving her sentence in a minimum security federal prison camp in Texas and is currently scheduled to be released in 2032.
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 as clinical laboratory scientists and anatomic pathologists studied the technology it was shown to be incapable of producing the results claimed by Holmes and her company president Ramesh Balwani. Today, both are serving lengthy prison sentences for defrauding investors. (Photo copyright: Max Morse/Wikimedia Commons.)
‘Nothing More than a Mirage’
Holmes was convicted in 2022 and sentenced to 135 months for her role in the Theranos fraud case. She was also ordered to pay approximately $452 million in restitution due to her offense, which resulted in significant financial losses to various entities and individuals.
Holmes’ one-time romantic partner and former president of Theranos Ramesh “Sunny” Balwani also was convicted of several fraud charges and sentenced to 155 months in prison.
Theranos claimed to have invented a device called Edison that could run a variety of fast, accurate, and affordable clinical laboratory diagnostic tests from a single finger prick of blood. That’s in contrast to traditional testing methods that require veinous blood drawn with a hypodermic needle. The reality, however, was that the Edison device did not work as described to investors.
“The vision sold by Holmes and Balwani was nothing more than mirage,” wrote 9th Circuit Judge Jacqueline Nguyen, JD, in the panel’s decision, adding that the “grandiose achievements touted by Holmes and Balwani were half-truths and outright lies.”
The judges continued: “Theranos’s blood-testing device failed to deliver faster and more accurate testing results than conventional technology. Pharmaceutical companies never validated the technology, as Holmes and Balwani had told investors. Contrary to the rosy revenue projections shared with investors and business partners, Theranos was running out of money.”
Life Behind Bars
Holmes told People she has adjusted to prison life, waking up every morning just after 5 AM. Her routine includes daily exercise and working as a reentry clerk. Holmes, who was once touted as having an estimated worth of $4.5 billion, now earns just 31 cents an hour teaching fellow inmates how to prepare resumes and apply for jobs and government benefits.
“So many of these women don’t have anyone, and once they’re in there, they’re forgotten,” she told People.
Holmes also teaches French and participates in cognitive and behavioral therapy for post-traumatic stress disorder (PTSD) to address past traumas, including the downfall of Theranos, which was once valued at $9 billion.
“It’s surreal,” she said. “People who have never met me believe so strongly about me. They don’t understand who I am. It forces you to spend a lot of time questioning belief and hoping the truth will prevail. I am walking by faith and, ultimately, the truth. But it’s been hell and torture to be here.”
Raising Children from Prison
Holmes’ trial was delayed three times due to the COVID-19 pandemic and then a fourth time due to a pregnancy. She gave birth to son William a few weeks before her trial began. She later gave birth to daughter Invicta. Both children are being raised by their father Billy Evans, Holmes’ current partner.
Critics allege Holmes only had children to gain sympathy and attempt to avoid prison time. In the People interview, she tried to dispel those claims.
“I know how the optics look, but I always wanted to be a mother,” she said. “I wanted to have children, be a mom. I truly did not think I would ever be convicted or found guilty. I kept talking to my lawyers and they also assured me we would never get this far.
“It wasn’t planned, and I can’t worry about what others think,” she added. “It’s just when the timing happened.”
Holmes’ children will be nine and 10 years-old when she’s slated for release in 2032. She continues to maintain her innocence and considers her trial and conviction a miscarriage of justice. She asserts that while Theranos was a flop, “failure is not fraud.”
“First it was about accepting it happened. Then it was about forgiving myself for my own part. [And] I refused to plead guilty to crimes I did not commit,” Holmes said.
Interestingly, Holmes intends to return to the healthcare industry upon her release. “There is not a day I have not continued to work on my research and inventions,” she told People. “I remain completely committed to my dream of making affordable healthcare solutions available to everyone.”
How she plans to do that given the federal government has banned her for life from operating a clinical laboratory and participating in federal health programs is anyone’s guess.
And thus the life and times saga of Elizabeth Holmes continues.
Clinical laboratories will need new methods for accommodating the increase in senior patients seeking rapid access to medical laboratory testing and pathology services
Experts within the healthcare industry are predicting existing care delivery models will need to be revised within the next few years to accommodate a rapidly aging population dubbed a “silver tsunami.” Many hospital systems are actively taking steps to prepare for this coming sharp increase in the number of senior citizens needing healthcare services, including clinical laboratory testing.
Multi-hospital health systems will have to accommodate demand for healthcare delivered in ways that meet the changing expectations of seniors. These include rapid access to clinical laboratory testing and anatomic pathology services, electronic health records, and telehealth visits with their doctors.
These trends will also require clinical laboratories to evolve in ways consistent with meeting both the volume of services/testing and improved levels of personal, speedy access to test results that seniors expect.
All of this is problematic given the current state of hospital staff shortages across the nation.
Investopedia defines the term “silver tsunami” as “the demographic shift caused by the increasing number of older adults in society, led by the baby boom generation.”
Baby boomers are individuals who were born between 1946 and 1964. The US Census Bureau estimates there are 76.4 million baby boomers living in the country today, and that by 2030 all boomers will be 65 years of age or older.
“In the next five years, the most significant disruptor to healthcare will be the capacity challenges associated with the ‘silver tsunami’ of baby boomers hitting the age of healthcare consumption,” said Jonathan Washko, MBA, FACPE, NRP, AEMD (above), director at large, National Association of Emergency Medical Technicians (NAEMT) and assistant vice president, CEMS Operations, in an interview with Becker’s Hospital Review. Clinical laboratories will have to engage with these senior patients in new ways that fit their lifestyles. (Photo copyright: EMS1.)
Silver Tsunami Could Transform Healthcare
Approximately 10,000 people turn 65 in the US every day, making them eligible for Medicare. This increase in recipients is likely to strain the government system. Healthcare organizations are seeking new ways to prepare for the anticipated boost in seniors requiring health services.
Washko believes the population shift will cause healthcare leaders to develop novel care models based on “intelligent and intentional design for better outcomes, lower costs, and faster results,” Becker’s Hospital Review reported.
“Solutions will require shifts to care in the home, new operational care models, and technology integration,” Washko noted. “These will allow the medicine being delivered to be effectively and efficiently optimized, vastly improving the productivity of existing and net new capacity.”
A recent HealthStream blog post outlined some of the methods hospitals can use to adapt to an aging population. They include:
Facility Design: Modifying lighting, using large-print signage, providing reading glasses and hearing amplifiers, purchasing taller chairs with arms and lower examination tables.
Technology: Offering assistive devices, creating more telehealth options, developing more user-friendly websites and electronic medical records.
Healthcare Delivery: Training staff on geriatric care, offering services intended for an older population, such as geriatric psychology, fall prevention programs, and establishing a more patient-centered environment.
“Anticipated regulatory challenges post-election will influence healthcare operations. The looming recession may alter how individuals access healthcare and treatment based on affordability,” Shelly Schorer, CFO CommonSpirit Health, told Becker’s Hospital Review. “Despite these headwinds and challenges, at CommonSpirit we are prepared to pivot and meet the changing needs of our communities by accurately predicting and addressing their healthcare needs efficiently.”
“This represents the greatest market disruption on the near-horizon,” said Ryan Nicholas, MD, Chief Quality Officer at Mercy Medical Group. “This has prompted Mercy Medical Group to move rapidly into value-based care with focus on total cost of care and network integrity.”
Nichols told Becker’s Hospital Review that Mercy’s Medicare population has increased by 24% over the last year, and that Mercy is anticipating a growth of 28% over the next year. These increases have convinced the organization to shift its view of service functions and to invest in additional resources that meet the growing demands for senior healthcare.
“Expanding ambulatory services and improving access for primary care services to reduce unnecessary [emergency department] utilization and shorten length of stay is our top priority,” Nichols said.
Shifting Demand for Clinical Laboratory Testing
This is not the first time Dark Daily has covered how shifting demographics are changing the landscape of healthcare services in nations where populations are aging faster than babies are being born.
Thus, many healthcare organizations are taking a proactive approach to the expected increase in seniors needing care for age-related and chronic illnesses.
“This along with other risk and value-based models will continue to drive integration of healthcare services and the value proposition through improving quality while reducing costs,” Alon Weizer, MD, chief medical officer and senior vice president, Mount Sinai Medical Center, Miami Beach, Fla., told Becker’s Hospital Review. “While we are investing heavily to be successful in these models through primary care expansion and technology that will help reduce the need for acute care services, we continue to focus our culture on providing safe and high quality care to our patients.”
Clinical laboratories will need to adapt to the changing needs of older patients to ensure all people receive high quality care. The coming “silver tsunami” will require labs to evolve in ways consistent with meeting the growing needs of seniors and providing better levels of personal services and access to cost-effective, fast, and accurate lab testing.
Anatomic pathologists understand that, along with breast cancer, diagnostic testing for prostate cancer accounts for a high volume of clinical laboratory tests. Thus, a recent study indicating that a new artificial intelligence (AI)-based software tool can dramatically improve physicians’ ability to identify the extent of these cancers will be of interest.
“The study found that Unfold AI’s patient-specific encapsulation confidence score (ECS), which is generated based on multiple patient data points, including MRI scans, biopsy results, PSA [prostate-specific antigen] data, and Gleason scores, is critical for predicting treatment success,” an Avenda press release states. “These findings emphasize the importance of Unfold AI’s assessment of tumor margins in predicting treatment outcomes, surpassing the predictive capability of conventional parameters.”
“Unfold AI’s ability to identify tumor margins and provide the ECS will improve treatment recommendations and allow for less-invasive interventions,” said study co-author Wayne Brisbane, MD, a urologic oncologist and UCLA medical professor, in another press release. “This more comprehensive approach enhances our ability to predict treatment outcomes and tailor interventions effectively to individual patient needs.”
“This study is important because it shows the ability of AI to not only replicate expert physicians, but to go beyond human ability,” said study co-author Wayne Brisbane, MD (above), a urologic oncologist and UCLA medical professor, in a press release. “By increasing the accuracy of cancer identification in the prostate, more precise and effective treatment methods can be prescribed for patients.” Clinical laboratories that work with anatomic pathologists to diagnose prostate and other cancers may soon have a new AI testing tool. (Photo copyright: UCLA.)
How Unfold AI Works
To gauge the extent of prostate tumors, surgeons typically evaluate results from multiple diagnostic methods such as PSA tests and imaging scans such as MRIs, according to a UCLA press release. However some portions of a tumor may be invisible to an MRI, causing doctors to underestimate the size.
Unfold AI, originally known as iQuest, was designed to analyze data from PSA, MRI, fusion biopsy, and pathology testing, according to a company brochure. From there, it generates a 3D map of the cancer. Avenda’s website says the technology provides a more accurate representation of the tumor’s extent than conventional methods.
“Accurately determining the extent of prostate cancer is crucial for treatment planning, as different stages may require different approaches such as active surveillance, surgery, focal therapy, radiation therapy, hormone therapy, chemotherapy, or a combination of these treatments,” Brisbane said in the UCLA press release.
Putting AI to the Test
In the new study, the UCLA researchers enlisted seven urologists and three radiologists to review 50 prostate cancer cases. Each patient had undergone prostatectomy—surgical removal of all or part of the prostate—but might have been eligible for focal therapy, a less-aggressive approach that uses heat, cryotherapy, or electric shocks to attack cancer cells more selectively.
The physicians came from five hospitals and had a wide range of clinical experience from two to 23 years, the researchers noted in The Journal of Urology.
They reviewed clinical data and examined MRI scans of each patient, then “manually drew outlines around the suspected cancerous areas, aiming to encapsulate all significant disease,” the press release states. “Then, after waiting for at least four weeks, they reexamined the same cases, this time using AI software to assist them in identifying the cancerous areas.”
The researchers analyzed the physicians’ work, evaluating the accuracy of the cancer margins and the “negative margin rate,” indicating whether the clinicians had identified all of the cancerous tissue. Using conventional approaches, “doctors only achieved a negative margin 1.6% of the time,” the press release states. “When assisted by AI the number increased to 72.8%.”
The clinicians’ accuracy was 84.7% when assisted by AI versus 67.2% to 75.9% for conventional techniques.
They also found that clinicians who used the AI software were more likely to recommend focal therapy over more aggressive forms of treatment.
“We saw the use of AI assistance made doctors both more accurate and more consistent, meaning doctors tended to agree more when using AI assistance,” said Avenda Health co-founder and CEO Shyam Natarajan, PhD, who was senior author of the study.
“These results demonstrate a marked change in how physicians will be able to diagnose and recommend treatment for prostate cancer patients,” said Natarajan in a company press release. “By increasing the confidence in which we can predict a tumor’s margins, patients and their doctors will have increased certainty that their entire tumor is treated and with the appropriate intervention in correlation to the severity of their case.”
UCLA’s study found that AI can outperform doctors both in sensitivity (a higher detection rate of positive cancers) and specificity (correctly detecting the sample as negative). That’s relevant and worth watching for further developments.
Pathologists and clinical laboratory managers should consider this use of AI as one more example of how artificial intelligence can be incorporated into diagnostic tests in ways that allow medical laboratory professionals to diagnose disease earlier and more accurately. This will improve patient care because early intervention for most diseases leads to better outcomes.
