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Clinical Laboratories and Pathology Groups

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California Doles Out $300 Million in No-Interest Loans to Save its Financially Struggling Hospitals

State’s new program helps ensure local communities have access to a community hospital and its physicians and clinical laboratories

Like phoenixes rising from ashes, a number of bankrupt and shuttered California hospitals have new life due in part to a state-run program offering the healthcare providers interest-free loans. The medical staff in these hospitals—including the clinical laboratories—will be happy to learn that their local communities refused to let their preferred healthcare providers shut down and disappear.

California’s Distressed Hospital Loan Program, operated by the state’s Department of Health Care Access and Information (HCAI) and the California Health Facilities Financing Authority, is making awards of nearly $300 million in no-interest loans to 17 healthcare providers, an HCAI news release announced.

“The program, established through Assembly Bill 112, offers interest-free, working capital loans to nonprofit and publicly operated financially-distressed hospitals, including facilities that belong to integrated healthcare systems with less than three separately licensed hospital facilities,” according to the news release.

This clearly demonstrates that even as both physicians and patient are increasingly comfortable with telehealth consultations—and having their healthcare conditions managed in ambulatory settings—the concept of the community hospital as an essential medical resource continues to motivate local governments and citizens to invest money in money-losing hospitals.

Elizabeth Landsberg

“Today we have provided much needed assistance to community hospitals across the state that desperately need financial help to provide the care their communities need,” said HCAI Director Elizabeth Landsberg (above). “I’m grateful to the legislature for spearheading this effort to help make sure these vital healthcare institutions are fiscally stable so they can continue to provide quality, affordable healthcare for all Californians.” Thanks to these loans, clinical laboratories in these hospitals will continue to perform critical testing for their communities. (Photo copyright: Gilbert Perez/HCAI.)

Providers Get Support with Conditions

Among the 17 healthcare providers receiving loans is Madera Community Hospital, a 106-bed hospital that served a rural area in California’s Central Valley. Madera, which closed in December and filed for Chapter 11 bankruptcy earlier this year, is one of 17 “troubled hospitals” in California getting a “lifeline,” KFF Health News reported.

Madera will receive a $2 million bridge loan earmarked toward operational costs. It is also eligible for a $50 million loan once Adventist Health, Madera’s intended new administrator, offers up a “comprehensive hospital turnaround plan,” HCAI noted.

“California hospitals face many financial challenges, and for independent rural hospitals, these challenges can sometimes be almost insurmountable,” said Kerry Heinrich, JD, President and CEO of Adventist Health, in a blog post leading up to the state’s announcement of loan awards. “If Madera succeeds in getting the financial resources it needs, Adventist Health will provide Madera Community Hospital with the expertise of a large healthcare system, helping to secure a sustainable future for healthcare in Madera County.”

It’s interesting to note that potential “operators” are watching to see if the hospital or State of California can arrange tens of millions of dollars in loans or other financing before they agree to come in and manage the hospital. 

The Distressed Hospital Loan Program aims to provide “loans (repayable over six years) to not-for-profit hospitals and public hospitals, as defined, in significant financial distress or to governmental entities representing a closed hospital to prevent the closure or facilitate the reopening of a closed hospital,” according to California Assembly Bill 112.

“The hospitals approved for this program have shown a detailed plan for financial recovery, and these funds will help them keep the doors open so they can keep serving their communities,” Fiona Ma, CPA, California State Treasurer, told Cal Matters.

Also receiving financial support is Beverly Hospital, a 202-bed Montebello, California, provider set to be purchased by Adventist Health White Memorial of Los Angeles, Cal Matters reported.

Beverly Hospital received a $5 million bridge loan to use toward operation costs while it is “purchased out of bankruptcy,” HCAI said in the news release.

Another hospital getting a “lifeline” is Hazel Hawkins Memorial in Hollister, California. The 25-bed level IV trauma center will receive a $10 million loan.

Other Ailing Hospitals Getting Interest-free Loans

According to HCAI, the other 14 hospitals receiving loans include:

What Led California’s Hospitals to Financial Hardship? 

According to Cal Matters, hospitals in California are “distressed” due to rising labor costs and inadequate reimbursement from Medicare, Medi-Cal, and commercial insurance.

In addition, the COVID-19 pandemic had a “staggering” impact on California hospitals’ financial health, Kaufman Hall reported in its April “California Hospital Financial Impact Report.”

The consulting firm’s report also found:

  • One in five California hospitals is at risk of closure due to “an unsustainable combination of negative margins, decreasing cash positions, and increasing debt.”
  • Hospital expenses in 2022 were $23.4 billion over pre-pandemic levels, outpacing revenue increases.
  • Operating income in 2022 was $8.5 billion less than in 2019.

Will Consumer Demand Affect California’s Success?

California’s commitment to its financially struggling hospitals comes amid national trends suggesting physicians and patients—especially younger healthcare consumers—are becoming increasingly comfortable with remote healthcare monitoring and receiving primary care in non-traditional environments, such as retail pharmacies and clinics.

In “Survey Indicates Zoomers and Millennials Are Ready for Pharmacies to Play a Bigger Role in Their Primary Care,” Dark Daily reported how demand for low cost, convenient access to doctors and drugs is driving transformation to decentralized medical care, and how retail pharmacy chains are seeing opportunity in offering primary care services.

Will younger Californian’s demand for low-cost, convenient healthcare render the state’s attempt to rehabilitee its failing hospitals moot? Time will tell. The ongoing financial woes of California hospitals will be watched by hospital-based clinical lab managers and pathologists in other states. That’s because California has a reputation for being first in the nation in attempts to address problems or regulate activity.

Regardless, it’s clear that—at this moment—the state is willing to invest in hospitals with a history of deteriorating financial performance as a way of ensuring access to healthcare for all of its citizens.   

Donna Marie Pocius

Related Information:

California Offers Lifeline to 17 Troubled Hospitals

California Announces $300 Million in Financial Support for Community Hospitals Across the State

Assembly Bill 112

Adventist Health to Manage Madera Community Hospital

California Bails Out Distressed Hospitals, Offers Interest-Free Loans to 17 Troubled Providers

San Benito Health Care District Receives Letter of Intent

California Hospital Financial Impact Report

Survey Indicates Zoomers and Millennials Are Ready for Pharmacies to Play a Bigger Role in Their Primary Care

Chicago Conference Attracts a Sizeable Crowd of Enthusiastic Hospital and Health System Clinical Laboratory Outreach Leaders

Sessions at this annual medical laboratory conference demonstrated that lab outreach continues to be a productive clinical and business line at numerous hospitals and IDNs

Sept. 26-Chicago: During the past 24 months, there have been multiple news stories announcing that different hospitals or integrated delivery networks (IDNs) had signed agreements to sell their clinical laboratory outreach businesses to one of the two multi-billion-dollar commercial lab corporations. Some Wall Street analysts have taken these lab outreach acquisitions as a sign that hospitals are struggling to compete in the outreach laboratory marketplace. They predict that the big commercial labs will continue to scoop up hospital laboratory outreach businesses at a brisk pace.

However, this may be an example of popular wisdom not reflecting the true state of the outpatient/outreach market for clinical laboratory testing services. Evidence of the contrary view—that many hospitals and IDNs have flourishing lab outreach programs—was in plain view last week here in the Windy City.

Last Tuesday and Wednesday, Mayo Clinic Laboratories presented its 33rd annual “Leveraging the Laboratory: Dimensions of Outreach” conference at the Intercontinental Hotel on Chicago’s Magnificent Mile. It was a sold-out event with about 150 attendees. Organizers said this was the largest attendance at this lab outreach meeting in the past 10 years.

Group at outreach conference

During last week’s “Leveraging the Laboratory” outreach conference in Chicago, produced by Mayo Clinic Laboratories, the individuals pictured above each presented different aspects of success in operating an effective hospital clinical laboratory outreach program. Front row top to bottom they are Henry Givray, Leadership’s Calling; Brianne Newton, Mayo Clinic Laboratories; Nilesh Kachalia, Yuma Medical Center; Trudie Milner, PhD, Yuma Regional Medical Center. And rear row top to bottom: Robert Michel, The Dark Report; Tony Bull, Medical University of South Carolina; Nicholas Rambow, Corewell Health; Jane Hermansen, Mayo Clinic Laboratories; Ellen Dijkman Dulkes, Mayo Clinic Laboratories. (Photo copyright: The Dark Report.)

Optimism was High at Mayo’s Lab Outreach Conference

Throughout the two days of the conference, there was enthusiasm for the viability of hospital laboratory outreach programs. There was also optimism that these local and regional outreach businesses will continue to be profitable and can support better patient care. Had any of the Wall Street analysts been in attendance, they would have heard the other side of the coin about the profitability and viability of hospital laboratory outreach programs—a story documented by the presentations of different hospital and IDNs that operate flourishing lab outreach programs.

“What makes this meeting unique is that it is the longest-running and biggest conference devoted to best practices in hospital and health system laboratory outreach programs,” said Jane Hermansen, Manager, Outreach and Network Development at Mayo Clinic Laboratories. “There are signs that increased integration within multi-hospital health systems requires a common lab test menu with consistent methodologies and reference ranges.

“During the conference, we heard many participants describe one part of their lab testing services to office-based physicians as ‘inreach’ when it involves employed providers of the parent health system,” she continued. “This is evidence that health system administration recognizes the value of a full longitudinal lab test record for their patients—whether from inpatient, inreach, or outreach testing.

“As well, this year’s exceptionally large attendance shows that hospital-based labs across the United States are forging ahead with their lab outreach services in ways that generate many benefits,” Hermansen noted. “The most important is to help physicians deliver better care to patients. At the same time, the added test volumes from a productive hospital laboratory outreach program improves the productivity of the laboratory while generating much needed income that helps that lab’s parent organization.”

Day one of this two-day event featured presentations about successful hospital laboratory outreach programs. Speakers included:

Day two was organized around hands-on workshops that addressed the management, operational, financial, and sales/marketing elements that make up a growing, dynamic hospital laboratory outreach business. Attendees were fully engaged in these sessions as they learned best practices. Innovations and clever approaches to increasing physician and patient satisfaction were shared during peer-to-peer exchanges.

Local Clinical Laboratories Serving their Communities

Hospital laboratories are uniquely positioned to deliver value to the physicians and other providers in the towns and regions they served. The obvious benefit is that the lab, its employees, and its clinical pathologists all live in the community. They have professional relationships that may go back decades with the physicians who order medical laboratory tests for their patients.

These local hospital labs can report many test results on the same day that they get the specimens from the doctors’ offices. Another benefit for those physicians and patients is that when a hospital lab performs all the tests originated in inpatient, outreach, and outpatient settings, it has a full longitudinal record of a patient’s lab test results, which often covers years of testing. This is important when patients show up in specialists’ offices or hospital emergency departments. Physicians in these settings can see all of the patient’s lab test history, and the tests are performed with the same methodology and have the same reference ranges.

Ways to Differentiate Hospital Laboratory Outreach Services

Hospital and health system laboratory outreach programs have multiple ways to differentiate their lab testing services. During his presentation, Tony Bull, System Administrative Officer, Pathology and Laboratory Medicine, Medical University of South Carolina, Charleston, South Carolina, provided the following list of different benefits that a lab outreach program can offer to local physicians, patients, and consumers:

  • Ease of access
  • Patient experience
  • Couriers
  • Pricing
  • Payer contracts
  • Customer service
  • Marketing and sales
  • Physician perception

One point of competitive advantage the speakers emphasized was the outreach laboratory’s access to lab test data. When lab data is combined with patient demographics and other sets of data, an outreach laboratory can develop clinically actionable intelligence that helps physicians and health insurers improve patient care, while lowering the total cost of care. When packaged correctly, these enriched data offerings can generate a new source of revenue for lab outreach programs.

Given the tough finances experienced by health systems and hospitals across the United States in recent years, it’s notable that the attendees at Mayo Clinic Laboratories’ “Leveraging the Laboratory” conference reported positive growth and profitable results from their laboratory outreach programs.

That’s solid evidence that there continues to be an opportunity for pathologists and clinical laboratory leaders of IDNs to ramp up their laboratory outreach businesses to win new client-physicians and produce additional cash flow for their labs.  

—Michael McBride

Related Information:

Mayo Clinic Laboratories’ “Leveraging the Laboratory: Dimensions of Outreach” Conference Will Be Held Sept. 26–27, 2023, in Chicago

Hospital Laboratory Outreach: Benefits and Planning

Leveraging the Laboratory: A Community Focus

Dimensions of Lab Outreach

Mayo Clinic Laboratories’ 33rd Outreach Conference

Video Podcast: Leveraging the Laboratory, Mayo Clinic Laboratories

Understanding Gen Z’s Approach to Healthcare Helps Clinical Laboratories Learn How to Better Meet Their Needs

Healthcare providers of all types will benefit from acknowledging Gen Z’s preference for digital interactions, self-testing, and over-the-counter medications

Each generation has its own unique connection to how it manages its health, and the latest studies into the healthcare habits of Generation Z (aka, Gen Z or Zoomers) are providing valuable insight that savvy clinical laboratory managers and pathologists—in fact all healthcare providers—can use to better serve their Gen Z patients.

According to McKinsey and Company, Gen Z’s “identity has been shaped by the digital age, climate anxiety, a shifting financial landscape, and COVID-19.” And Pew Research states that Zoomers “are also digital natives who have little or no memory of the world as it existed before smartphones.”

As the largest demographic, “Gen Z stands 2.6 billion members strong. … Globally, they hold purchasing power of more than $500 billion and mobile buying power of $143 billion,” wrote Stacy Rapacon, Managing Editor at Senior Executive Media, in an article she penned for HP’s The Garage.

Meeting Gen Zers’ healthcare needs on their terms would seem to be a judicious choice.

Bernhard Schroeder

“Gen-Z’s buying power may exceed $3 trillion,” wrote Bernhard Schroeder (above), a clinical lecturer on integrated/online marketing at San Diego State University, in Forbes. “Their spending ability exceeds the gross domestic product of all but about 25 of the world’s countries.” Thus, it behooves healthcare leaders, including clinical laboratory managers and pathologists, to consider how best to approach treating Gen Z patients. (Photo copyright: San Diego State University.)

Gen Z Leads in Digital Healthcare Use, Self-testing, OTC Drugs

“Gen Z engages in every type of digital healthcare activity more than other generations,” a recent study by PYMNTS noted. A total of 2,735 consumers were surveyed, and though all reported using digital healthcare to some degree, Gen Z stood out.

Patient portal access was the highest digital method accessed by Zoomers (62%), followed by telemedicine appointment usage (55%), the PYMNTS report found.

Knowing the direction Gen Z is trending may lead clinical laboratory leaders to expect self-testing to be on the rise, and that hunch would be correct. “There are two converging trends; the rise of women’s health technology and increased use of at-home sample collection for diagnosis tests,” Clinical Lab Products reported.

“Ongoing innovation in these areas could significantly improve the accessibility of women’s health testing. It will also have repercussions for labs, potentially changing the way samples are received and processed, and the way results are distributed. The quantity and quality of samples may be impacted, too. It’s important for labs to be aware of likely developments so they can prepare, and potentially collaborate with the health technology companies driving change,” CLP noted.

Another area feeling the impact of Gen Z’s healthcare spending is the over-the-counter (OTC) drug market.

“Since the pandemic began, more Americans are paying closer attention to their symptoms and looking for easily accessible information about over-the-counter medications, especially for allergies, coughs, and headaches,” said Kim Castro, Editor and Chief Content Officer for US News and World Report, in a press release.

Zoomers Want Healthcare on Their Own Terms

Gen Z grew up with the internet, Amazon, Netflix, Google, and social media since birth.

“The ‘norm’ they experienced as children was a world that operated at speed, scale, and scope. They developed an early facility with powerful digital tools that allowed them to be self-reliant as well as collaborative,” anthropologist Roberta Katz, PhD, a senior research scholar at Stanford’s Center for Advanced Study in the Behavioral Sciences (CASBS) told Stanford News.

As digital natives, Gen Z can be more science and data driven and yet still expect to find health advice on YouTube or TikTok. According to an article published by Harvard Pilgrim Healthcare, “Gen Z is the first generation to grow up surrounded by digital devices, and they expect their health benefits to be digital, too. From choosing a benefits package to finding a provider, Gen Z wants to take care of their health on their own terms. And that may just include video chatting with a doctor from the back of an Uber.”

In its 2022 US Digital Health Survey, research firm Insider Intelligence found that “Half of Gen Z adults turn to social media platforms for health-related purposes, either all the time or often.”

“Gen-Z will make up 31% of the world’s population by 2021 and they have deeply formed perceptions and beliefs … This has led to an amazing change in the way Gen-Z is disrupting several industries simultaneously,” wrote Bernhard Schroeder (above), a clinical lecturer on integrated/online marketing at San Diego State University, in Forbes.

What Can Clinical Laboratories Learn from These Findings

Gen Z seeks accuracy and trustworthy information. “Gen-Zers’ natural penchant for skepticism and frugality—coupled with low levels of confidence in the US healthcare system—makes them less likely to trust providers, more likely to research prices before seeking care, and more apt to worry that their health insurance won’t cover their treatment,” Insider Intelligence noted.

According to Contract Pharma, “Gen Z is concerned with holistic health and self-care, rather than a one size fits all pharmaceutical approach. They share a hesitancy for traditional healthcare models but with very interesting differences. By understanding these differences, the consumer healthcare industry can focus on agile and distinctive brands to harness Gen Z’s tremendous purchasing power.”

Savvy clinical laboratory leaders can better serve their Gen-Z client physicians and patients by better understanding why Zoomers are more inclined to order their own lab tests (without a physician), collect their own specimens to send into labs, and/or collect their own specimens to do home testing (think COVID-19 self-test kits). Zoomers may need an entirely new business model from their healthcare providers, including clinical laboratories.

Kristin Althea O’Connor

Related Information:

What is Gen Z?

On the Cusp of Adulthood and Facing an Uncertain Future: What We Know about Gen Z So Far

How Gen Z is Redefining Their World through Technology

Gen Z Is ‘Generation Digital Health’ as 62% Use Digital Patient Portals

What Self-Sampling for Women’s Health Testing Means for Labs

US News Top Recommended Over-the-Counter Health Products

Gen Z Are Not ‘Coddled.’ They Are Highly Collaborative, Self-Reliant and Pragmatic, According to New Stanford-Affiliated Research

Who is Gen Z and How Are They Shaping the Future of Health Benefits?

Generation Z: Transforming Consumer Healthcare

Gen Z’s Take on Healthcare

US Generation Z Healthcare Behaviors

Australian Researchers Develop Static Droplet Microfluidic Device That Can Detect Cancer Cells via a Simple Blood Test

This is another approach to the liquid biopsy that clinical laboratories and pathologists may use to detect cancer less invasively

Screening for cancer usually involves invasive, often painful, costly biopsies to provide samples for diagnostic clinical laboratory testing. But now, scientists at the University of Technology (UTS) in Sydney, Australia, have developed a novel approach to identifying tumorous cells in the bloodstream that uses imaging to cause cells with elevated lactase to fluoresce, according to a UTS news release.

The UTS researchers created a Static Droplet Microfluidic (SDM) device that detects circulating tumor cells (CTC) that have separated from the cancer source and entered the bloodstream. The isolation of CTCs is an intrinsic principle behind liquid biopsies, and microfluidic gadgets can improve the efficiency in which problematic cells are captured.

The University of Technology’s new SDM device could lead the way for very early detection of cancers and help medical professionals monitor and treat cancers.

The UTS researchers published their findings in the journal Biosensors and Bioelectronics titled, “Rapid Metabolomic Screening of Cancer Cells via High-Throughput Static Droplet Microfluidics.”

“Managing cancer through the assessment of tumor cells in blood samples is far less invasive than taking tissue biopsies. It allows doctors to do repeat tests and monitor a patient’s response to treatment,” explained Majid E. Warkiani, PhD, Professor, School of Biomedical Engineering, UTS, and one of the authors of the study, in a news release. Clinical laboratories and pathologists may soon have a new liquid biopsy approach to detecting cancers. (Photo copyright: University of New South Wales.)

Precision Medicine a Goal of UTS Research

The University of Technology’s new SDM device differentiates tumor cells from normal cells using a unique metabolic signature of cancer that involves the waste product lactate

“A single tumor cell can exist among billions of blood cells in just one milliliter of blood, making it very difficult to find,” explained Majid E. Warkiani, PhD, a professor in the School of Biomedical Engineering at UTS and one of the authors of the study, in the news release.

“The new [SDM] detection technology has 38,400 chambers capable of isolating and classifying the number of metabolically active tumor cells,” he added.

“In the 1920s, Otto Warburg discovered that cancer cells consume a lot of glucose and so produce more lactate. Our device monitors single cells for increased lactate using pH sensitive fluorescent dyes that detect acidification around cells,” Warkiani noted.

After the SDM device has detected the presence of questionable cells, those cells undergo further genetic testing and molecular analysis to determine the source of the cancer. Because circulating tumor cells are a precursor of metastasis, the device’s ability to identify CTCs in very small quantities can aid in the diagnosis and classification of the cancer and the establishment of personalized treatment plans, a key goal of precision medicine.

The new technology was also designed to be operated easily by medical personnel without the need for high-end equipment and tedious, lengthy training sessions. This feature should allow for easier integration into medical research, clinical laboratory diagnostics, and enable physicians to monitor cancer patients in a functional and inexpensive manner, according to the published study. 

“Managing cancer through the assessment of tumor cells in blood samples is far less invasive than taking tissue biopsies. It allows doctors to do repeat tests and monitor a patient’s response to treatment,” stated Warkiani in the press release.

The team have filed for a provisional patent for the device and plan on releasing it commercially in the future.

Other Breakthroughs in MCED Testing

Scientists around the world have been working to develop a simple blood test for diagnosing cancer and creating optimal treatment protocols for a long time. There have been some notable breakthroughs in the advancement of multi-cancer early detection (MCED) tests, which Dark Daily has covered in prior ebriefings.

In “NHS Trial Analysis Finds That Grail’s Galleri Clinical Laboratory Blood Test Can Detect 50 Cancers and Identify the Location of the Cancer,” we reported how the UK’s National Health Service (NHS) had conducted a trial study of an MCED test developed by a California-based healthcare technology company that could provide a less painful/invasive cancer test experience to UK residents.

And in “University Researchers Develop Microfluidic Device That Partitions Cancer Cells According to Size in Effort to Create a Useful Liquid Biopsy Method,” we covered how researchers at the University of Illinois at Chicago (UIC) and Queensland University of Technology (QUT) in Australia had unveiled a diagnostic device that uses microfluidic technology to identify cell types in blood by their size and isolate individual cancer cells from patient blood samples.

According to the Centers for Disease Control and Prevention (CDC), cancer ranks second in the leading causes of death in the US, just behind heart disease. There were 1,603,844 new cancer cases reported in 2020, and 602,347 people died of various cancers that year in the US. 

According to the National Cancer Institute, the most common cancers diagnosed in the US annually include:

Cancer is a force in Australia as well. It’s estimated that 151,000 Australians were diagnosed with cancer in 2021, and that nearly one in two Australians will receive a diagnosis of the illness by the age of 85, according to Cancer Council South Australia.

The population of Australia in 2021 was 25.69 million, compared to the US in the same year at 331.9 million.

The development of the University of Technology’s static droplet microfluidic device is another approach in the use of liquid biopsies as a means to detect cancer less invasively.

More research and clinical studies are needed before the device can be ready for clinical use by anatomic pathology groups and medical laboratories, but its creation may lead to faster diagnosis of cancers, especially in the early stages, which could lead to improved patient outcomes. 

—JP Schlingman

Related Information:

New Technology to Improve Cancer Detection and Treatment

This Device Can Easily, Cheaply Detect Cancer Cells in a Blood Sample

Rapid Metabolomic Screening of Cancer Cells via High-throughput Static Droplet Microfluidics

Multi-cancer Early Detection (MCED) Tests

Static Droplet Microfluidic, the Cancer Cell Analysis Device

NHS Trial Analysis Finds That Grail’s Galleri Clinical Laboratory Blood Test Can Detect 50 Cancers and Identify the Location of the Cancer

University Researchers Develop Microfluidic Device That Partitions Cancer Cells According to Size in Effort to Create a Useful Liquid Biopsy Method

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

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

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

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

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

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

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

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

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

Physicians Also Take to Social Media to Complain about Denials

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

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

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

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

Affordable Care Act Loophole?

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

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

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

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

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

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

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

Is Complaining on Social Media an Effective Tactic?

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

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

Federal Government and States Step In

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

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

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

—Stephen Beale

Related Information:

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

Delays Related to Prior Authorization in Inflammatory Bowel Disease

Why You Shouldn’t Engage with Customer Complaints on Twitter

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

“Damaged Care” Premiere Features HMO Whistleblower

Major Insurers to Ease Prior Authorizations Ahead of Federal Crackdown

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

Payers Request More Claims Documentation

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