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Will Blowing in a Device Be Useful in Screening for COVID-19? FDA Grants Its First EUA for a Breathalyzer SARS-CoV-2 Screening Test

InspectIR COVID-19 Breathalyzer identifies a chemical signature associated with SARS-CoV-2 in about three minutes with 91.2% sensitivity and 99.3% specificity

One company is hoping that it can make breathalyzers a viable, easier way to screen for SARS-CoV-2. It will soon have the opportunity to learn if consumers will accept this form of screening for COVID-19, as its device recently obtained an Emergency Use Authorization from the FDA.

On April 14, 2022, InspectIR Systems, LLC, of Frisco, Texas, was granted the US Food and Drug Administration’s first-ever emergency use authorization (EUA202006) for a portable breath test device designed to screen for SARS-CoV-2 infection. Clinical laboratories that perform COVID-19 testing will want to compare the high-level sensitivity of this breath test compared to rapid antigen tests currently used for COVID-19 screening.

The InspectIR COVID-19 Breathalyzer uses gas chromatography-mass spectrometry to identify mixtures of five volatile organic compounds (VOCs) uniquely associated with the disease, the FDA said in a news release announcing the EUA.

The device is about the size of a carry-on suitcase. It provides test results in less than three minutes and is currently authorized for use with subjects who are 18 or older.

The FDA’s EUA limits use of the device to “a qualified, trained operator under the supervision of a healthcare provider licensed or authorized by state law to prescribe tests,” the federal agency said. The test “can be performed in environments where the patient specimen is both collected and analyzed, such as doctor’s offices, hospitals, and mobile testing sites.”

Jeffrey Shuren, MD, JD
The InspectIR COVID-19 Breathalyzer device “is yet another example of the rapid innovation occurring with diagnostic tests for COVID-19,” said Jeffrey Shuren, MD, JD (above), director of the FDA’s Center for Devices and Radiological Health (CDRH), in the news release. A portable device that can identify SARS-CoV-2 infections in a few minutes with 91% specificity may be of great interest to clinical laboratory companies operating COVID-19 popup testing sites around the nation. (Photo copyright: US Food and Drug Administration.)

In granting the authorization, the FDA cited results of a study with 2,409 participants in which the test had sensitivity (correct positive results) of 91.2% and specificity (correct negative results) of 99.3%. “The test performed with similar sensitivity in a follow-up clinical study focused on the Omicron variant,” the agency stated.

“The FDA continues to support the development of novel COVID-19 tests with the goal of advancing technologies that can help address the current pandemic and better position the US for the next public health emergency,” said Jeffrey Shuren, MD, JD, director of the FDA’s Center for Devices and Radiological Health (CDRH), in the news release.

In its coverage of the EUA, CNET noted that the InspectIR breath test is more sensitive than rapid antigen tests but not as sensitive as PCR tests. The FDA advised that people who receive a positive test result with the InspectIR COVID-19 Breathalyzer should follow up with a PCR molecular test.

How the InspectIR COVID-19 Breathalyzer Works

InspectIR LLC was founded in 2017 by Tim Wing and John Redmond, Forbes reported. Their original goal was to develop a breathalyzer for detection of cannabis or opioid use. However, with the onset of the COVID-19 pandemic, the entrepreneurs decided to adapt the technology into a SARS-CoV-2 diagnostic test.

Lacking a background in chemistry, they turned to Guido Verbeck, PhD, head of the University of North Texas Laboratory of Imaging Mass Spectrometry (UNT-LIMS) in Denton, Texas, to help develop the breath test.

As described in the FDA’s EUA documents, a subject breathes into the device using a sterilized one-time-use straw. A pre-concentrator collects and concentrates the five targeted VOCs, all from the ketone and aldehyde families of organic compounds. These go to a Residual Gas Analyzer, and an algorithm determines whether the sample contains the chemical signature associated with a SARS-CoV-2 infection.

Redmond told Forbes that the specific mix of VOCs is proprietary. The article notes that Wing, Redmond, and Verbeck have patented the pre-concentrator technology.

The devices are manufactured at a Pfeiffer Vacuum Inc. facility in Indiana. The InspectIR founders told Forbes they expect to produce 100 units per week in a start-up phase with plans to ramp up as sales increase. They also plan to look at applications for other respiratory diseases.

InspectIR has not announced exact pricing, but Time reports that the company will lease the equipment to clients, and that pricing per test will be comparable to rapid antigen tests.

InspectIR’s first breathalyzer device is receiving much positive coverage from the media. Should it prove to effective at spotting COVID-19 at popup testing sites, it may supplant traditional clinical laboratory rapid antigen tests as the screening test of choice.   

Stephen Beale

Related Information:

Coronavirus (COVID-19) Update: FDA Authorizes First COVID-19 Diagnostic Test Using Breath Samples

The First COVID-19 Breathalyzer Test Is Coming to the US

Frisco Startup Gets FDA Approval on COVID Breathalyzer after Teaming Up with UNT Researcher

Meet the Founders of the $2.7 Million Startup Behind the New COVID Breathalyzer

FDA Authorizes First COVID-19 Breath Test

How a New Breath Test Could Make Mass COVID Testing Easier

FDA Authorizes First COVID-19 Breath Test Meet the InspectIR COVID-19 Breathalyzer Test Just Authorized by the FDA

Federal Fraud Trial of Former Theranos President/COO Ramesh ‘Sunny’ Balwani Postponed until June 7

No explanation for the delay was provided by court after nine weeks of testimony in the prosecution of the former clinical laboratory executive

Former Theranos president/chief operating officer Ramesh “Sunny” Balwani’s often-delayed fraud trial was scheduled to resume on May 27 with a full day of defense witness testimony. It will now be delayed until June 7.

According to NBC Bay Area, a court assistant announced the delay but did not provide a reason for the postponement. A copy of the clerk’s notice posted on Twitter by Law360 also provided no further details. Pathologists and clinical laboratory managers must now wait several more months to learn what may be next revealed in testimony during this trial.

It is also yet one more delay in Balwani’s trial. His original trial date was January 2022 before being rescheduled for February. The needs for COVID-19 pandemic protocols further delayed the start multiple times until opening arguments began March 22 in a federal court room in San Jose, Calif.

One part of the trial has concluded. On May 20, the government rested its case against Balwani, who faces 12 counts of wire fraud and conspiracy to commit wire fraud while serving as second in command at Theranos, the now defunct Silicon Valley medical laboratory startup.

Ramesh “Sunny” Balwani
Former Theranos president and COO Ramesh “Sunny” Balwani (above) faces 12 charges of wire fraud and conspiracy to commit wire fraud while serving as chief operating officer of Theranos, the company that boldly declared it would disrupt the clinical laboratory testing industry. His trial, which began in March in US District Court in San Jose, Calif., is now delayed until June 7, when his defense attorneys will begin their first full day of witness testimony. (Photo copyright: Stephen Lam/Reuters/The New York Times.)

According to The Wall Street Journal (WSJ), nine weeks of testimony in US District Court in San Jose, Calif., included testimony from 24 witnesses. Prosecutors aimed to convince jurors Balwani controlled much of the day-to-day decision-making at Theranos and was a full participant in the fraud scheme.

NBC Bay Area stated prosecutors worked to link Balwani to two key decisions:

  • The rollout of the failed Edison blood testing device in Walgreens, and
  • The company’s improper use of the Pfizer logo on a report to Walgreens executives that appeared to validate Theranos’ technology.

Before this latest postponement, Balwani’s attorneys had begun their client’s defense by putting a naturopathic physician from Arizona on the stand. The witness testified to sending more than 150 patients to Theranos and to using the company’s blood tests for herself, the WSJ reported.

In addition, Jeffrey Coopersmith, JD, one of Balwani’s attorneys and Partner at Orrick Herrington and Sutcliffe, LLP, made a verbal motion for an acquittal at the conclusion of the government’s case, which the judge deferred.

Prosecution Strategy Angers Theranos Customers

Bloomberg reported that prosecutors followed the previous outline used to gain the conviction of Elizabeth Holmes, founder and former CEO of Theranos, with many of the same witnesses from her trial reappearing on the stand to testify in the Balwani trial.

Prosecutors primarily focused their case on the injury to investors, which has angered some former Theranos customers.

“I feel like I belong to a group of people who were on the receiving end of a crime,” said Erin Tompkins—a Theranos customer who testified against both Holmes and Balwani—outside the courthouse shortly after finishing her testimony in the Balwani case, Bloomberg reported.

According to CNBC, Tompkins testified she was misdiagnosed as having HIV after having her blood drawn from a Theranos device at a Walgreens in Arizona.

“Despite the dedication and support of prosecutors, patient witnesses have been treated as peripheral” compared to the investors, Tompkins told Bloomberg. “We were defrauded because we trusted them with our blood and however many dollars for the test. But we weren’t robbed of millions of dollars.”

Susanna Stefanek, editorial manager at Apple Inc. who served on the Holmes jury, told Bloomberg, “[The prosecution] didn’t really prove that these patients were persuaded to get these blood tests by something she said or did, or even the advertising. The connection between Elizabeth Holmes and the patients was not that strong to us.”

Proving Patient Fraud

Michael Weinstein, JD, a former federal prosecutor turned Chair of White-Collar Litigation and Government at Cole Schotz in New Jersey, told Bloomberg that to convict Balwani of patient fraud, prosecutors must prove Balwani knew what was going on inside Theranos and that his misrepresentations caused patients to suffer.

“The government wants to show there was an inconsistency between what he was learning internally versus what he was saying externally,” Weinstein said.

With the Balwani trial likely to conclude this month, clinical laboratory directors and pathologists who have closely followed Theranos’ rise and fall should prepare for the final chapter in the saga. 

Andrea Downing Peck

Related Information:

Sunny Balwani Trial Postponed Until June 7: Court

Did Sunny Balwani Make Decision to Use Pfizer Logo When Promoting Theranos?

Former Theranos Patient Testifies That a Blood Test at Walgreens Came Back with False Positive for HIV

Prosecution Rests in Trial of Former Theranos President Ramesh “Sunny” Balwani

Elizabeth Holmes Beat Charges of Patient Fraud. Will Ramesh “Sunny” Balwani?

Researchers Use Machine Learning to Identify Thousands of New Marine RNA Viruses in Study of Interest to Microbiologists and Clinical Laboratory Scientists

Screening and analysis of ocean samples also identified a possible missing link in how the RNA viruses evolved

An international team of scientists has used genetic screening and machine learning techniques to identify more than 5,500 previously unknown species of marine RNA viruses and is proposing five new phyla (biological groups) of viruses. The latter would double the number of RNA virus phyla to 10, one of which may be a missing link in the early evolution of the microbes.

Though the newly-discovered viruses are not currently associated with human disease—and therefore do not drive any current medical laboratory testing—for virologists and other microbiologists, “a fuller catalog of these organisms is now available to advance scientific understanding of how viruses evolve,” said Dark Daily Editor-in-Chief Robert Michel.

“While scientists have cataloged hundreds of thousands of DNA viruses in their natural ecosystems, RNA viruses have been relatively unstudied,” wrote four microbiologists from Ohio State University (OSU) who participated in the study in an article they penned for The Conversation.

The OSU study authors included:

Zayed was lead author of the study and Sullivan led the OSU research team.

The researchers published their findings in the journal Science, titled, “Cryptic and Abundant Marine Viruses at the Evolutionary Origins of Earth’s RNA Virome.”

Matthew Sullivan, PhD
“RNA viruses are clearly important in our world, but we usually only study a tiny slice of them—the few hundred that harm humans, plants and animals,” explained Matthew Sullivan, PhD (above), Director, Center of Microbiome Science, in an OSU news story. Sullivan led the OSU research team. “We wanted to systematically study them on a very big scale and explore an environment no one had looked at deeply, and we got lucky because virtually every species was new, and many were really new,” he added. (Photo copyright: University of Ohio.)

RNA versus DNA Viruses

In contrast to the better-understood DNA virus, an RNA virus contains RNA instead of DNA as its genetic material, according to Samanthi Udayangani, PhD, in an article she penned for Difference Between. Examples of RNA viruses include:

One major difference, she explains, is that RNA viruses mutate at a higher rate than do DNA viruses.

The OSU scientists identified the new species by analyzing a database of RNA sequences from plankton collected during a series of ocean expeditions aboard a French schooner owned by the Tara Ocean Foundation.

“Plankton are any aquatic organisms that are too small to swim against the current,” the authors explained in The Conversation. “They’re a vital part of ocean food webs and are common hosts for RNA viruses.”

The team’s screening process focused on the RNA-dependent RNA polymerase (RdRp) gene, “which has evolved for billions of years in RNA viruses, and is absent from other viruses or cells,” according to the OSU news story.

“RdRp is supposed to be one of the most ancient genes—it existed before there was a need for DNA,” Zayed said.

The RdRp gene “codes for a particular protein that allows a virus to replicate its genetic material. It is the only protein that all RNA viruses share because it plays an essential role in how they propagate themselves. Each RNA virus, however, has small differences in the gene that codes for the protein that can help distinguish one type of virus from another,” the study authors explained.

The screening “ultimately identified over 44,000 genes that code for the virus protein,” they wrote.

Identifying Five New Phyla

The researchers then turned to machine learning to organize the sequences and identify their evolutionary connections based on similarities in the RdRp genes.

“The more similar two genes were, the more likely viruses with those genes were closely related,” they wrote.

The technique classified many of the sequences within the five previously known phyla of RNA viruses:

But the researchers also identified five new phyla—including two dubbed “Taraviricota” and “Arctiviricota”—that “were particularly abundant across vast oceanic regions,” they wrote. Taraviricota is named after the Tara expeditions and Arctiviricota gets its name from the Arctic Ocean.

They speculated that Taraviricota “might be the missing link in the evolution of RNA viruses that researchers have long sought, connecting two different known branches of RNA viruses that diverged in how they replicate.”

In addition to the five new phyla, the researchers are proposing at least 11 new classes of RNA viruses, according to the OSU story. The scientists plan to issue a formal proposal to the International Committee on Taxonomy of Viruses (ICTV), the body responsible for classification and naming of viruses. 

Studying RNA Viruses Outside of Disease Environments

“As the COVID-19 pandemic has shown, RNA viruses can cause deadly diseases. But RNA viruses also play a vital role in ecosystems because they can infect a wide array of organisms, including microbes that influence environments and food webs at the chemical level,” wrote the four study authors in The Conversation. “Mapping out where in the world these RNA viruses live can help clarify how they affect the organisms driving many of the ecological processes that run our planet. Our study also provides improved tools that can help researchers catalog new viruses as genetic databases grow.”

This remarkable study, which was partially funded by the US National Science Foundation, will be most intriguing to virologists and microbiologists. However, clinical laboratories also should be interested in the fact that the catalog of known viruses has just expanded by 5,500 types of RNA viruses.

Stephen Beale

Related Information:

Researchers Identified Over 5,500 New Viruses in the Ocean, Including a Missing Link in Viral Evolution

Cryptic and Abundant Marine Viruses at the Evolutionary Origins of Earth’s RNA Virome

There’s More to RNA Viruses than Diseases

Differences Between DNA and RNA Viruses

Ocean Water Samples Yield Treasure Trove of RNA Virus Data

Global Survey of Marine RNA Viruses Sheds Light on Origins and Abundance of Earth’s RNA Virome

Scientists Find Trove of over 5,000 New Viruses Hidden in Oceans

Virologists Identify More than 5,000 New Viruses in the Ocean

Scientists Use Thousands of Genetic Markers to Develop Risk Scores for Six Common Diseases: Findings May Have Implications for Clinical Laboratories

Study demonstrates how precision medicine is advancing because of new insights from the use and interpretation of whole-genome sequencing

As part of the Genomic Medicine at Veterans Affairs Study (GenoVA), researchers from Harvard Medical School, Veterans Affairs Boston Healthcare System, and Brigham and Women’s Hospital in Massachusetts used thousands of genetic markers to develop and validate polygenic risk scores (PRS) for six common illnesses. These findings may eventually provide clinical laboratories and anatomic pathology groups with useful biomarkers and diagnostic tests.

The focus of the ongoing GenoVA study is to “determine the clinical effectiveness of polygenic risk score testing among patients at high genetic risk for at least one of six diseases measured by time-to-diagnosis of prevalent or incident disease over 24 months,” according to the National Institutes of Health.   

The scientists used data obtained from 36,423 patients enrolled in the Mass General Brigham Biobank. The six diseases they researched were:

The polygenic scores were then tested among 227 healthy adult patients to determine their risk for the six diseases. The researchers found that:

  • 11% of the patients had a high-risk score for atrial fibrillation,
  • 7% for coronary artery disease,
  • 8% for diabetes, and
  • 6% for colorectal cancer.

Among the subjects used for the study:

  • 15% of the men in the study had a high-risk score for prostate cancer, and
  • 13% of the women in the study had a high score for breast cancer. 

The researchers concluded that the implementation of PRS may help improve disease prevention and management and give doctor’s a way to assess a patient’s risk for these conditions. They published their findings in the journal Nature Medicine, titled, “Development of a Clinical Polygenic Risk Score Assay and Reporting Workflow.”

“We have shown that [medical] laboratory assay development and PRS reporting to patients and physicians are feasible … As the performance of PRS continues to improve—particularly for individuals of underrepresented ancestry groups—the implementation processes we describe can serve as generalizable models for laboratories and health systems looking to realize the potential of PRS for improved patient health,” the researchers wrote.

Using PRS in Clinical Decision Support

Polygenetic risk scores examine multiple genetic markers for risk of certain diseases. A calculation based on hundreds or thousands of these genetic markers could help doctors and patients make personalized treatment decisions, a core tenet of precision medicine.

“As a primary care physician myself, I knew that busy physicians were not going to have time to take an entire course on polygenic risk scores. Instead, we wanted to design a lab report and informational resources that succinctly told the doctor and patient what they need to know to make a decision about using a polygenic risk score result in their healthcare,” epidemiologist Jason Vassy, MD, told The Harvard Gazette. Vassy is Associate Professor, Harvard Medical School at VA Boston Healthcare System and one of the authors of the research.

Jason Vassy, MD
“This is another great example of precision medicine,” Jason Vassy, MD (above), Adjunct Assistant Professor, General Internal Medicine at Boston University School of Medicine, told WebMD. “There’s always been a tantalizing idea that someone’s genetic makeup might help tailor preventative medicine and treatment.” Personalized clinical laboratory testing is increasingly becoming based on an individual’s genetics. (Photo copyright: Harvard Medical School.)

Increasing Diversity of Patients in Genomic Research

The team did encounter some challenges during their analysis. Because most existing genomic research was performed on persons of European descent, the risk scores are less accurate among non-European populations. The researchers for this study addressed this limitation by applying additional statistical methods to qualify accurate PRS calculations across multiple racial groups.

“Researchers must continue working to increase the diversity of patients participating in genomics research,” said Matthew Lebo, PhD, Chief Laboratory Director, Laboratory Molecular Medicine, at Mass General Brigham and one of the authors of the study. “In the meantime, we were heartened to see that we could generate and implement valid genetic scores for patients of diverse backgrounds,” he told The Harvard Gazette.

The team hopes the scores may be utilized in the future to help doctors and patients make better decisions regarding preventative care and screenings.

“It’s easy to say that everyone needs a colonoscopy at age 45,” Vassy told WebMD. “But what if you’re such a low risk that you could put it off for longer? We may get to the point where we understand risk so much that someone may not need one at all.”

Future of PRS in Clinical Decision Making

The scientists plan to enroll more than 1,000 patients in a new program and track them for two years to assess how medical professionals use PRS in clinical care. It is feasible that patients who are at high risk for certain diseases may opt for more frequent screenings or take preventative medicines to mitigate their risk.

“Getting to that point will take time,” Vassy added. “But I can see this type of information playing a role in shared decision making between doctor and patient in the near future.”

The team also established resources and educational materials to assist both doctors and patients in using the scores.

“It’s still very early days for precision prevention,” Vassy noted, “but we have shown it is feasible to overcome some of the first barriers to bringing polygenic risk scores into the clinic.”

More research and studies are needed to prove the effectiveness of using PRS tests in clinical care and determine its role in customized treatment plans based on personal genetics. Nevertheless, pathologists and medical scientists will want to follow the GenoVA study.  

“It is probably most helpful to think of polygenic risk scores as a risk factor for disease, not a diagnostic test or an indication that an individual will certainly develop the disease,” Vassy said. “Most diseases have complex, multifactorial etiologies, and a high polygenic risk score is just one piece of the puzzle.”

Pathologists and clinical laboratory managers may want to stay informed as researchers in the GenoVA study tease new useful diagnostic insights from their ongoing study of the whole human genome. Meanwhile, the GenoVA team is moving forward with the 1,000-patient study with the expectation that this new knowledge may enable earlier and more accurate diagnoses of the health conditions that were the focus of the GenoVA study.

JP Schlingman

Related Information:

Genetic Risk Scores Developed for Six Diseases

Development of a Clinical Polygenic Risk Score Assay and Reporting Workflow

What If You Knew Your Unique Risk for Every Disease?

Polygenic Risk Scores May Assist Decision-making in Primary Care

Maryland’s Statewide Value-Based Payment Models Benefit both Healthcare Providers and Patients

By shifting away from fee-for-service, the state encouraged collaboration between hospitals and physicians to improve care and lower costs

Maryland “leads the way” in value-based payment reform, according to a series of articles published in Health Affairs. “The evidence is clear,” the article declares, “Maryland’s application of uniform prices within global budgets lowers total care costs, reduces unnecessary utilization, and incentivizes proactive preventive and chronic disease management care. Can other states implement Maryland-like payment models and achieve similar financial success?” It’s a fair question.

It is widely-known that clinical laboratory testing is integral to early and accurate diagnosis, and, under Maryland’s current reimbursement model, hospital/health system C-suite administrators have recognized that a robust clinical laboratory service is invaluable to showing progress toward cost containment and patient outcomes goals. But how did that come about? And what can other states learn from Maryland’s success?

Focusing on Better Patient Outcomes at Reduced Costs

Maryland’s current value-based payment arrangement set its first roots back in 2014. That is the year when the state of Maryland and the federal Centers for Medicare and Medicaid Services (CMS) announced a “new initiative to modernize Maryland’s unique all-payer rate-setting system for hospital services aimed at improving patient health and reducing costs,” declared a press release at that time.

Dubbed Maryland’s “All-Payer Model,” the press release went on to say, “This initiative will replace Maryland’s 36-year-old Medicare waiver to allow the state to adopt new policies that reduce per capita hospital expenditures and improve health outcomes as encouraged by the Affordable Care Act. Under this model, Medicare is estimated to save at least $330 million over the next five years.” Did that happen? Apparently so.

The state designed its “All-Payer Model” hospital payment system to render reimbursements based on populations served and the quality of care provided. The program focused on better patient outcomes and higher quality care at a reduced cost, instead of concentrating on the volume of care. The system incentivized hospitals to prevent readmissions, infections, and other potentially avoidable events. 

“By shifting away from traditional fee-for-service payment, Maryland’s new model encourages collaboration between hospitals and physicians to improve patient care, promotes innovative approaches to prevention, and accelerates efforts to avoid unnecessary admissions and readmissions,” said pediatrician Joshua Sharfstein, MD, Vice Dean for Public Health Practice and Community Engagement at the Johns Hopkins Bloomberg School of Public Health in a 2014 CMS press release.

Sharfstein was the Secretary of Maryland’s Department of Health from 2011 to 2014.  

Then, in 2019, Maryland implemented the successor to the state’s “All-Payer Model” dubbed the “Total-Cost-of-Care (TCOC) Model.”

According to the CMS, whereas the All-Payer Model “established global budgets for certain Maryland hospitals to reduce Medicare hospital expenditures and improve quality of care for beneficiaries,” the TCOC “builds on the success of the Maryland All-Payer Model by creating greater incentives for healthcare providers to coordinate with each other and provide patient-centered care, and by committing the State to a sustainable growth rate in per capita total cost of care spending for Medicare beneficiaries.”

The TCOC began on January 1, 2019, and runs through December 31, 2026.

Nicole Stallings of the Maryland Hospital Association
“Our focus is really on the health of our communities,” Nicole Stallings of the Maryland Hospital Association told State of Reform. “We don’t have a public hospital system, we don’t have tiered hospitals, we don’t have hospitals that are having to close because we are able to spread cost really equitably across our system. Equity being a core pillar is something that we know is critically important to maintain. We want to see more alignment there as we now try to tackle these population health goals. But we believe there’s more collaboration happening here than anywhere else,” she added. Clinical laboratories have an important role to play in population health. (Photo copyright: Center Maryland/Vimeo.)

Results of Maryland’s All-Payer-Model Program

In general, an all-payer system allows a state to manage healthcare prices via rate setting where all healthcare payers, including the government, private insurers, and employer healthcare plans, pay similar prices for services provided at individual hospitals.

When it announced the results of the five-year All-Payer-Model program, Maryland’s Health Services Cost Review Commission—the state agency responsible for regulating cost and quality of hospital care in Maryland—declared the program’s targets had been achieved. They included:

  • 1.92% average annual growth per capita in hospital revenue (goal was to be less than or equal to 3.58%).
  • $1.4 billion cumulative Medicare savings in hospital expenditures.
  • 53% reduction in hospital-acquired conditions (goal was 30% reduction over five years).
  • Below national average for hospital readmissions of Medicare patients within five years.
  • All of Maryland’s 47 acute-care hospitals paid based on health populations served—not number of services rendered—with 98% of total hospital revenue under Global Budget Revenue (GBR) payment method.

In addition, the Maryland HSCRC report indicated that innovative care was a key tenet of the model and that hospitals benefitted from being given the ability to:

  • Invest in new healthcare programs that improve collaboration with other providers in the community.
  • Implement new clinical protocols, patient safety techniques, and follow-up procedures for high-risk patients at hospital discharge.
  • Create hubs of care to triage needs, coordinate important services, and ensure patients in need are connected to services outside the hospital.

After the success of the Maryland All-Payer Model, the state’s Total-Cost-of-Care Model program continued to focus on healthcare cost savings to Medicare. But it introduced population health improvement activities across the entire healthcare delivery system.

Future of Maryland’s Total-Cost-of-Care Model Program

Maryland’s TCOC Model program seeks more than $1 billion in Medicare savings by the end of 2023, or the fifth performance year of the program. According to the CMS Innovation Models webpage, Maryland’s TCOC Model includes the following three programs:

  • The Hospital Payment Program, where each hospital receives a population-based payment amount which covers all hospital services provided during a year.
  • The Care Redesign Program, which allows hospitals to make incentive payments to nonhospital healthcare providers who partner with hospitals to provide care.
  • The Maryland Primary Care Program, which incentivizes primary care providers to offer advanced care services to their patients.

An analysis of the first two years of the TCOC program found some significant improvements particularly in the areas of care management, access, and continuity.

In the first performance year of Maryland’s TCOC model, the state reduced spending by $365 million, relative to national trends, according to a Mathematica implementation report.

Part of the success of the model is due to its use of global, fixed budgets that are set for every hospital. Rates are established by an independent commission which prevents cost shifting and provides a more equitable system for patients where they pay the same price for the same service at all hospitals throughout the state, Mathematica noted. 

“We believe [global budgets are] a real distinguishing factor, because unlike the rest of the country, our hospitals aren’t paid more to do more,” said Nicole Stallings, told State of Reform. Stallings is Chief External Affairs Officer and Senior Vice President, Government Affairs and Policy at the Maryland Hospital Association (MHA).

Expanding Maryland’s All-Payer-Model Program to Other States

In 2016, CMS established the Center for Medicare and Medicaid Innovation (CMMI) to identify ways to improve healthcare quality and reduce overall costs in the Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) programs. Maryland’s All-Payer model has produced the most savings out of any of the projects and experimental payment programs researched by CMMI. The success of Maryland’s programs prompted CMMI to look at expanding similar programs in other states.  

Reductions in hospital costs combined with improved outcomes can only benefit patients and the healthcare industry in the long run. Since clinical laboratory testing is integral to early diagnoses and treatment of diseases, under Maryland’s current reimbursement model a robust clinical laboratory service is invaluable for succeeding at cost containment and patient outcome goals.   

JP Schlingman

Related Information:

Meaningful Value-Based Payment Reform, Part 1: Maryland Leads the Way

Meaningful Value-Based Payment Reform, Part 2: Expanding The Maryland Model to Other States

The National Implications of Maryland’s All-Payer System

The Total Cost of Care Model: Uniquely Maryland, Uniquely Successful

CMS and Maryland Announce Joint Initiative to Modernize Maryland’s Health Care System to Improve Care and Lower Costs

Maryland All-Payer Model to Deliver Better Care and Lower Costs

CMS: Maryland All-Payer Model

CMS: Maryland Total-Cost-of-Care Model

Maryland’s All-Payer Model Results

Evaluation of the Maryland Total Cost of Care Model: Implementation Report

Maryland Total Cost of Care Model Reduced Spending by $365 Million in First Year

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