News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

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News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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California Company Creates ‘Uber for Blood’ to Speed the Transport of Life-Saving Medical Laboratory Supplies and Blood Products in Rwanda

High-flying service expected to take flight in other African countries this year, as Tanzania announces launch of ‘world’s largest’ drone network for medical supply and clinical laboratory specimen deliveries

Anatomic pathologists and medical laboratories know that blood is a scarce and life-saving commodity. This is especially true in developing countries. Rising to that need, a California-based logistics company is using drones to provide on-demand access to vital blood supplies in Rwanda and Tanzania, creating a so-called “Uber for blood” delivery service that is poised for deployment to other regions in Africa as well.

Silicon Valley Start-up Zipline is an American automated logistics company based in California that transported more than 5,500 units of blood in 2017 to 12 regional hospitals from a base in the east of Rwanda, reported The Guardian.

The high-flying Silicon Valley startup began operating in the African nation in October 2016 and has cut blood delivery time from four hours to an average of about 30 minutes! Shipments arrive by parachute, dropping within a narrow target landing zone.

Though the Rwandan government, which is funding the project, has not officially released data quantifying the drones’ impact, the fixed-wing drones (called Zips) have been credited with reducing deaths due to malaria, childbirth, and other medical emergencies.

World’s Largest Drone Delivery Network

In August, Zipline announced plans to launch what it claims is the world’s largest drone delivery network in partnership with the government of Tanzania, a country of 56 million people. Zipline will open four distribution centers in the country during the next four years, with the first drones taking to the air in the first quarter of 2018 from the Tanzanian capital city of Dodoma, according to Cargo Forwarder Global (CFG), a cargo and logistics industry news website.

“Every life is precious. The government of Tanzania through the Ministry of Health, Community Development, Gender, Elderly and Children, has made great achievements in improving health services including the availability of medicines in all public health facilities,” Mpoki Ulisubisya, MD, Permanent Secretary of the Tanzania Ministry of Health, stated in a press release. “Our vision is to have a healthy society with improved social well-being that will contribute effectively to personal and national development; working with Zipline will help make that vision a reality.”

Zipline co-founder and CEO Keller Rinaudo (above) speaking at a 2017 TEDTalk on partnering with Rwanda and Tanzania to deliver life-saving medical supplies—including blood and medical laboratory products—by drone up to 500 times each day. Click on image above to view video. (Photo copyright: TEDTalk.)

Zipline co-founder and CEO Keller Rinaudo (above) speaking at a 2017 TEDTalk on partnering with Rwanda and Tanzania to deliver life-saving medical supplies—including blood and medical laboratory products—by drone up to 500 times each day. Click on image above to view video. (Photo copyright: TEDTalk.)

Each of the four distribution centers will be equipped with up to 30 drones, capable of making 500 on-demand delivery flights per day. Drones will provide access to more than 1,000 clinics, many of which lack well-functioning supply chains due to surface roads that “become increasingly bumpy and eventually impassable, particularly during the rainy season,” the CFG website reported.

“We strive to ensure that all 5,640 public health facilities have all the essential medicines, medical supplies, and laboratory reagents they need, wherever they are—even in the most hard-to-reach areas,” Laurean Bwanakunu, Director General of Tanzania’s Medical Stores Department, said in a news release. “But that mission can be a challenge during emergencies, times of unexpected demand, bad weather, or for small but critical orders. Using drones for just-in-time deliveries will allow us to provide health facilities with complete access to vital medical products no matter the circumstance.”

According to Zipline, health workers at remote clinics and hospitals text orders to Zipline for the medical products they need, which are stored in distribution centers. Within minutes, a Zipline Distribution Center can pack and prepare blood and other stored medical products for the 60-mph flight to any delivery site within a 93-mile round trip.

A Zipline worker technician launches a drone in Muhanga. (Photo copyright: Stephanie Aglietti/AFP/Getty Images. Caption copyright: The Guardian.)

A Zipline worker technician launches a drone in Muhanga. (Photo copyright: Stephanie Aglietti/AFP/Getty Images. Caption copyright: The Guardian.)

In a CFG statement, Keller Rinaudo, Zipline’s co-founder and Chief Executive Officer, said the expansion to Tanzania will make East Africa a world leader in drone logistics.

“Millions of people across the world die each year because they can’t get the medicine they need when they need it,” noted Rinaudo. “It’s a problem we can help solve with on-demand drone delivery. Now African nations are showing the world how it’s done.”

Rinaudo told IEEE Spectrum that Zipline expects to expand its operations to several other countries in 2018, though he did not specify where Zips will be flying next. He said the next generation of Zips will be able to fly longer distances, carry larger payloads, and make more deliveries per day.

“Rwanda has shown such remarkable success that a lot of other countries want to follow in its footsteps,” noted Rinaudo. “The problems we’re solving in Rwanda aren’t Rwanda problems, they’re global problems—rural healthcare is a challenge everywhere.”

Drones Delivering Medical Laboratory Specimens Globally

Africa is not the only part of the world where drones are taking flight to deliver blood and medical laboratory specimens. Johns Hopkins University Medicine researchers set a record in America for the longest distance drone delivery of viable medical specimens when its test drone traveled 161 miles across the Arizona desert, an event that Dark Daily reported on in November.

And in Switzerland, an eight-hospital medical group in Lugano partnered with Swiss Post (Switzerland’s postal service) and transportation technology manufacturer Matternet of Menlo Park, Calif., to successfully use drones to transport medical laboratory samples between hospitals, as noted in another Dark Daily report.

As drone technology improves, use of UAVs to transport blood and medical supplies and clinical laboratory specimens from point A to point B will likely become commonplace. They soon could be overflying a neighborhood near you!

—Andrea Downing Peck


Related Information:

‘Uber for blood’: How Rwandan Delivery Robots Are Saving Lives

Tanzania Announces World’s Largest National Drone Delivery Network Partnering with Zipline

Tanzania on Way to Becoming Drone Champion

Zipline Expands its Medical Delivery Drones Across East Africa

Johns Hopkins Test Drones Travels 161 Miles to Set Record for Delivery Distance of Clinical Laboratory Specimens

Drones Used to Deliver Clinical Laboratory Specimens in Switzerland

Continued ‘Aggressive Audit Tactics’ by Private Payers and Government Regulators Following 2018 Medicare Part B Price Cuts Will Strain Profitability of Clinical Laboratories, Pathology Groups

Medical laboratory leaders must take steps to protect their lab’s financial stability and know how to prepare and respond to investigations and regulatory threats

Clinical laboratories and anatomic pathology groups may soon face a new normal that includes more frequent and tougher audits by both private payers and the government, resulting in larger monetary demands. The financial strain medical laboratories will experience from more aggressive audits will be compounded by the roll out on January 1, 2018, of new Medicare Part B price cuts.

Attorney Richard S. Cooper, Co-chair, National Healthcare Practice Group, McDonald Hopkins, LLC, in Cleveland, says audit activity has been “ramping up” during the past 18 months, but has accelerated in recent months.

“We are seeing a dramatic increase in the number of audits and the dollar amount the payers are trying to recoup as a result of those audits,” Cooper said in an interview with Dark Daily, noting monetary demands can reach “seven to eight” figures.

“We’re seeing that with both government payers as well as commercial payers and we’re seeing much more aggressive audit tactics being utilized than we have in the past.”

Payers Put Clinical Laboratories Under Increased Scrutiny

While toxicology/pharmacogenomics and molecular/genetic testing laboratories frequently are the targets of the increased scrutiny, Cooper says no medical laboratory is immune from questioning. The “medical necessity” of providing and billing for diagnostic tests or services, and laboratory waivers of “patient responsibility” for copays and deductibles, are the two most common compliance issues being cited, states Cooper, who points to Cigna, UnitedHealthcare and Blue Cross Blue Shield as among the most active commercial payers his firm encounters.

“There are large dollars at stake and they are going after those dollars,” Cooper explains.

In this new environment, Cooper maintains medical directors and lab executives must:

  1. Protect the lab’s financial stability in 2018 by considering operational changes and taking other steps to prepare for revenue losses due to PAMA (Protecting Access to Medicare Act).
  2. Get educated about practices that can trigger audits by commercial payers, or state and federal regulators, and consider conducting self-audits using an independent third-party.
  3. Know how to respond if a lab is charged with proficiency test violations, which can result in significant penalties from Centers for Medicaid and Medicare Services (CMS), such as loss of a lab’s CLIA license and revocation of the medical director’s license to operate a medical laboratory for two years.
  4. Expect scrutiny of “piggyback” arrangements with toxicology labs that could raise compliance concerns and violate commercial payer contracts. A “piggyback” arrangement is where a lab bills under the payer contract of another provider because it is unable to contract with the payer directly. This often involves “piggybacking” on lab or hospital (usually Critical Access Hospital) contracts. In many cases, the billing entity does not perform the lab services for which they are billing. The services are instead performed by the non-participating lab, and the billing provider pays most of the collections back to the non-billing laboratory, retaining a fee for using the contracts. There may not be disclosure to the payers about which entity actually performed the test.

Navigating Tougher Clinical Laboratory Laws and Regulations

To help medical laboratory and pathology group leaders prepare for the perils they face, and take proactive steps to navigate the tough lab regulations and legal issues that lay ahead, click here to register for Dark Daily’s upcoming webinar “Tougher Lab Regulations and New Legal Issues in 2018: More Frequent Payer Audits, Problems with Contract Sales Reps, Increased Liability for CLIA Lab Directors, Proficiency Testing  Violations, and More,” (or place this link into your browser:

Attorney Richard S. Cooper, Co-chair, National Healthcare Practice Group, McDonald Hopkins LLC, in Cleveland will be a featured speaker and moderator during a new Dark Daily webinar on the Medicare Part B price cuts, and the critical legal and compliance issues clinical laboratories and pathology groups face starting in 2018. (Photo copyright: McDonald Hopkins LLC.)

This crucial learning event takes place on Wednesday, November 8, 2017, at 1 p.m. EST.

Cooper, who will moderate the webinar, will be joined by David W. Gee, JD, a Partner at Davis Wright Tremaine LLP in Seattle, and Jeffrey J. Sherrin, JD, President and Partner, O’Connell and Aronowitz in Albany, New York.

These three attorneys are among the nation’s foremost experts in issues unique to clinical laboratories, pathology groups, hospital labs, toxicology/pharmacogenomics labs, and molecular/genetic testing labs. Following our speakers’ presentations, there will be a question and answer period, during which you can submit your own specific questions to our experts.

You can’t afford to miss this opportunity. Click here to get up to speed on the most serious regulatory, compliance, and managed care contracting issues confronting all labs today. This webinar will provide solutions to the perils facing labs now and in 2018 by helping you map a proactive and effective course of action for your clinical lab or pathology group.

—Andrea Downing Peck

Related Information:

Tougher Lab Regulations and New Legal Issues in 2018: More Frequent Payer Audits, Problems with Contract Sales Reps, Increased Liability for CLIA Lab Directors, Proficiency Testing Violations, and More

What Every Lab Needs to Know about the Medicare Part B Clinical Laboratory Price Cuts That Take Effect in Just 157 Days, on Jan. 1, 2018

Nation’s Most Vulnerable Clinical Laboratories Fear Financial Failure If Medicare Officials Cut Part B Lab Fees Using PAMA Market Price Data Final Rule

FDA Looks to Clamp Down on Laboratory-Developed Tests and Put an End to ‘Wild West of Medicine’: Might CLIA Problems at Theranos Support FDA’s Position?

The Wall Street Journal examines the FDA’s position on LDTs and looks at the pros and cons of LDT regulation by the federal agency

National news coverage over the deficiencies uncovered by Clinical Laboratory Improvement Amendments (CLIA) inspections of the clinical laboratory operated by Theranos in Newark, Calif., may have an interesting consequence that affects all medical laboratories and pathology groups.

Over the past 30 months, Theranos has regularly asserted that its laboratory-developed tests (LDTs) were under review by the Food and Drug Administration (FDA). For example, in an interview published in the December 14, 2014, issue of The New Yorker, Theranos Founder and CEO Elizabeth Holmes stated, “We believe that to realize our vision we must operate at the highest levels of excellence… And the FDA’s stamp of approval is seen as an indicator of the quality of a product.”

Thus, it would be ironic if the problems in the quality of clinical laboratory tests uncovered by federal CLIA inspectors at the Theranos lab facility in Newark was used by the FDA to justify their intent to regulate LDTs. The FDA has already released a report to the public that identified instances where laboratories running LDTs were alleged to have reported inaccurate lab test results to patients and their physicians. (more…)

Mobile DNA Testing Van Cruises New York City Streets and Asks “Who’s Your Daddy?”

Mobile testing truck makes DNA testing approachable and accessible to the community while competing with established clinical laboratories

You may have seen recent news coverage of a van cruising the streets of New York City that was offering on-the-spot DNA testing with signs plastered on sides reading “Who’s Your Daddy”—“DNA Testing.” Certainlyany passing pathologist or clinical chemist might do a double take.

According to abc News coverage of the story, passersby can hail the 28-foot recreational vehicle to have their DNA tested. Of course, no testing is performed in the mobile van. Rather, a technician collects a sample from the customer, packages it, and sends it to a laboratory in Ohio for testing. Results come back in three to five days. Prices for the testing service start at $299. (more…)

British Researchers Working on a Way to Use Cell Phones to Perform Pathology Tests for STDs

Clinical laboratory-on-a-chip would cost under £1 and allow young people to test themselves for sexually-transmitted diseases

Some wags call a new diagnostic testing concept the “pee in the cell phone” pathology lab test. The humor is directed at cell phone-based medical laboratory tests under development in the hopes that this confidential and private diagnostic test method will encourage more young people to undergo testing for sexually-transmitted diseases (STDs).

Newspapers in the United Kingdom are reporting on a research project—funded in part by the government—to develop STD tests that can be run on a USB-size chip that is inserted into a smart phone or a personal computer.

This project is a response to the significant rise in sexually transmitted infections (STIs) among young people. In the United Kingdom, the rate of new infections for herpes, chlamydia and gonorrhea are rising to record levels.

Clinical Laboratory Test on a Cell Phone or Personal Computer