New program draws bipartisan criticism and concern from patients and doctors.
Shrewd labs will keep an eye on the latest Centers for Medicare & Medicaid Services (CMS) prior authorization pilot that leans on artificial intelligence (AI) to determine treatment options for Medicare patients. While the Wasteful and Inappropriate Service Reduction Model pilot (WISeR) doesn’t directly mention lab tests, staying on the pulse of this growing trend will keep labs thinking ahead on how to minimize impact on bottom line, paperwork, and workflows when these pilots infiltrate lab testing.
An article from POLITICO reported that CMS will start a pilot version of the program as early as January 2026 in six states including Ohio, Texas, Oklahoma, Ariz., N.J., and Wash. Private AI companies will assist and focus on “services that have been vulnerable to fraud, waste and abuse in the past,” the article noted. The voluntary model is slated to span six years through December 31, 2031, according to the Centers for Disease Control and Prevention (CDC).
Among the types of procedures encumbered by the pilot program are knee arthroscopy for osteoarthritis, skin and tissue substitutions, and electrical nerve stimulator implants, CMS noted. All outpatient and emergency services would currently be excluded, they added, as well as “services that would pose a substantial risk to patients if substantially delayed.”
“All recommendations for non-payment will be determined by appropriately licensed clinicians who will apply standardized, transparent, and evidence-based procedures to their review,” CMS added.
The premise of the pilot is to eliminate wasteful spending, with CMS citing 25% of US healthcare spending falling in this category. “According to the Medicare Payment Advisory Commission Medicare spent up to $5.8 billion in 2022 on unnecessary or inappropriate services with little to no clinical benefit,” their website noted.
A Sour Reception
The pilot program is receiving a less-than-warm welcome from both parties—doctors, and patients alike, Politico noted. “It’s been referred to as the AI death panel. You get more money if you’re that AI tech company if you deny more claims. That is going to lead to people getting hurt,” Greg Landsman (D-Ohio) said during the committee hearing.
Landsman noted in the article from POLITICO that a bipartisan desire to put a halt to the program exists among growing concerns about patient harm coming from the program. Landsman “called for the program to be shut down until an independent review board could be erected to review the liability questions and ensure the AI prior authorization pilot doesn’t harm patients.”
“I’m concerned that this AI model will result in denials of lifesaving care and incentivize companies to restrict care,” Frank Pallone (D-N.J.) and House Energy and Commerce Committee ranking member said at the subcommittee meeting on the use of AI in health care held on Sept. 3.
“We have pretty good evidence that prior authorization as a process itself is fraught, adding that AI’s ability to improve the process for patients remains unproven,” Michelle Mello, Stanford University health law professor and witness at the hearing, said.
Looking Ahead
The involvement of AI in healthcare will only continue, and learning what aspects positively impact healthcare versus cause damage will continue to evolve.
Worth noting, there are already two unrelated lawsuits, against UnitedHealthcare and Cigna, that challenge the safety of AI use to deny patient care, POLITICO noted in the article.
Laboratory leaders should keep their eyes open and their ears to the ground on not only the pilot but all AI healthcare trends.
Bill has bipartisan support and, if passed, would require physician involvement in any decision of medical necessity
Harmful effects caused by delays in care due to payer preauthorization requirements are receiving renewed attention with the refiling of the Reducing Medically Unnecessary Delays in Care Act of 2025 in the US House of Representatives. The bill intends to “ensure that prior authorization medical decisions under Medicare are determined by physicians” and not by non-medical personnel.
Originally introduced by Representative Mark Green, MD, (R-TN) in 2022 and reintroduced in March 2025, the bill notes that “board-certified physicians in the same specialty are the ones making these important decisions. It would also direct Medicare, Medicare Advantage, and Medicare Part D plans to comply with requirements that restrictions must be based on medical necessity and written clinical criteria, as well as additional transparency obligations,” according to a press release from Green’s office.
Thus, to ensure physician involvement in determinations of medical necessity, the bill includes the following requirement:
“Prior to establishing, or substantially or materially altering, written clinical criteria for purpose of preauthorization review, the Medicare administrative contractor, Medicare Advantage plan, or prescription drug plan, respectively, shall obtain input from actively practicing physicians within the service area where the written clinical criteria are to be employed.”
The bill has bipartisan support. Green partnered with Doctor Caucus co-chair Greg Murphy, MD, (R-NC) and Congressional Democratic Doctors Caucus co-chair Kim Schrier, MD, (D-WA) to draft the bill.
“Americans don’t want bureaucrats sitting in on their doctor’s appointments, and they don’t want them to determine their treatment plans,” said House Representative Mark Green, MD, in a press release. (Photo copyright: Department of Homeland Security.)
‘Life Threatening Barriers’
Many major medical associations also support the bill. They include the:
American Medical Association (AMA),
American Osteopathic Association,
American College of Emergency Physicians, and many more.
“According to the AMA, 23% of physicians report that prior authorization has led to a patient’s hospitalization, while 18% report that it has led to a life-threatening event. In the same 2024 survey, 94% of physicians believed that prior authorization requirements negatively impacted patient care,” Green’s press release states.
“As a physician myself, I’ve seen firsthand how prior authorization has created life threatening barriers to essential and standard care,” said Schrier in the press release. “This commonsense legislation is something everyone should get behind to ensure patients can access the treatment they need when they need it by putting medical decisions back in their physician’s hands.”
Burdensome Regulations
The matter is also personal to Green. In the press release, he described his own experience in the healthcare system. “As a survivor of both colon and thyroid cancer, I know how critical it is to start treatment as soon as possible. Burdensome regulations keeping patients from accessing life-saving treatment, like colonoscopies, is not only inconvenient but life-threatening.”
Back in 2022 when he first introduced the bill, he said, “At their core, these determinations are medical decisions, and they should be made by those with the appropriate medical training and expertise. The doctor-patient relationship is vital to the practice of medicine, but the current practice of prior authorization amounts to placing a bureaucrat in the middle of the doctor’s office. Physicians are forced to jump through hours of unnecessary and arbitrary paperwork simply to prove to third-party administrators that a procedure is medically necessary. We need to remove the red tape and let doctors do what they do best—treating patients and saving lives.”
The resurrection of this bill is timely. At the end of March, Dark Daily reported KFF’s findings that in 2023 health insurers denied 19% of all in-network claims, including many in anatomic pathology and clinical laboratories.
Judge decides injuries claimed by pathologists are not antitrust injuries and that plaintiffs have no standing to bring antitrust lawsuit
Four pathologists who filed an antitrust lawsuit alleging their former employer “engaged in a series of unfair and deceptive practices” in an effort to maintain a monopoly on clinical pathology services in central Iowa had their lawsuit dismissed by a federal judge. The plaintiffs appealed the decision. Two related state lawsuits are still pending, one in which the plaintiffs are the defendants.
It is common for pathologists in a community to leave one pathology practice and either establish a new practice or join a nearby practice. What is less common is litigation that involves the original group practice and the departed pathologists.
Thus, this example of lawsuits and counter lawsuits is interesting because it creates court rulings about the strengths and weaknesses of the arguments asserted by both plaintiffs and defendants in situations where pathologists leave their employer but continue to practice in the same community.
The court decisions in these cases demonstrate how judges are handling these issues involving antitrust allegations, market share, and non-compete agreements.
“As a result of Defendants’ alleged conduct, Goldfinch asserts its ability to compete has been severely undermined and ‘has the potential to harm patients,’” wrote federal judge Rebecca Goodgame Ebinger, JD (above), in her order granting defendants’ motion to dismiss. “These injuries are not antitrust injuries because they do not stem from conduct affecting competition in the pathology and dermatopathology markets generally.” Clinical laboratories and anatomic pathology practices can learn from the decisions handed down in this court case. (Photo copyright: Wikipedia.)
Pathologists Accuse Defendants of Suppressing Competition
In their original complaint, which was filed May 13, 2024, in the US District Court for the Southern District of Iowa, the plaintiffs said that, beginning in 2021, IPA “strongly pressured” them to sign an employment agreement that would have prevented them from launching a competing practice in the Des Moines area. They refused to comply, but “the administrator of these corporations told these pathologists that the Agreement was in effect even though they had not signed it,” the complaint states.
On October 2022, they informed IPA that they intended to leave to form their own pathology practice, according to the complaint.
The new practice, Goldfinch Laboratory in Urbandale, Iowa, began offering pathology services in February 2023.
“Prior to the formation of Goldfinch, IPA was the only independent pathology practice in central Iowa that was not exclusively tied to one source of referrals,” the complaint states. In addition, “it was the only independent pathology practice in central Iowa that offered dermatopathology services.”
After they notified IPA and RLC of their intention to leave, the plaintiffs alleged that the employer engaged in a series of efforts to “suppress competition” and monopolize the local market for pathology and dermatopathology services.
Plaintiffs Allege Defendants’ Behavior Could Have Harmed Patients
The pathologists were barred from entering IPA’s offices, leaving potential referring physicians with the impression that “these pathologists were no longer practicing,” the complaint states, and preventing them from “maintaining on-going relations with potential referral sources.”
IPA, the complaint alleges, “refused to share biopsy slides with Goldfinch pathologists when those slides were required for continuity of care of the patient—even though this practice was contrary to the standard of care and could well have caused harm to patients.” The complaint characterized this as “an effort to induce referral sources not to make referrals to Goldfinch.”
The plaintiffs also alleged that IPA and RLC made “false and deceptive statements to dissuade referral sources from making referrals to Goldfinch,” for example by claiming that legal problems would force the practice to close.
Given their “monopoly power” in the local market, the plaintiffs argued, IPA and RLC “were able to charge supracompetitive prices for their services.” A $1.4 million contract with one hospital corporation was “in the top 5% of Part A contracts in the United States,” the complaint alleges, and rural hospitals paid “at least 400% of the actual Medicare fee schedule amount for the technical component of pathology services for Medicare patients.”
Defendants’ Response to Allegations
In their motion to dismiss the suit, the defendants argued that Goldfinch was “a classic ‘disgruntled competitor’” that had not demonstrated an “antitrust injury” as defined by federal and state law.
“Goldfinch’s owners used to work for IPA and RLC, voluntarily left, and now seek to litigate their personal financial losses under the guise of federal and state antitrust claims,” the motion states.
The defendants also argued that Goldfinch lacked standing to file an antitrust claim.
Goldfinch “alleges the ‘antitrust practices’ of IPA and RLC are harmful to patients and other payers for pathology and dermatopathology services,” the motion states. “But patients and payers are quite capable of noticing and seeking redress for the alleged harms and Goldfinch need not do so on their behalf.”
In addition, the defendants argued, Goldfinch failed to adequately define a “plausible” product market or geographic market that was subject to the alleged monopoly power.
“Goldfinch’s alleged geographic market is vaguely ill-defined as ‘central Iowa,’” the motion states. “But there is a difference between the service area and a geographic market.” The motion cited an earlier decision in which the US Court of Appeals for the Seventh Circuit “deemed a relevant market for a pathology practice to be nationwide.”
“As a result of Defendants’ alleged conduct, Goldfinch asserts its ability to compete has been severely undermined and ‘has the potential to harm patients,’” she wrote. “These injuries are not antitrust injuries because they do not stem from conduct affecting competition in the pathology and dermatopathology markets generally. These injuries, instead, are a result of Defendants’ alleged actions targeting Goldfinch and demonstrate an injury to Goldfinch as a competitor—the loss of some patients and referral sources.”
She also agreed with the defendants that Goldfinch lacked sufficient standing to bring an antitrust claim, and that the plaintiffs had failed “to adequately allege a relevant market for pathology and dermatopathology services.”
Goldfinch filed a Notice of Appeal on Jan. 10.
State Lawsuits Pending
Meanwhile, both parties are awaiting a decision in a state court lawsuit in which the Goldfinch partners are the defendants, according to the Iowa Capital Dispatch.
IPA filed the suit late in 2022, shortly after learning that the four pathologists planned to leave and start their own practice. It alleged “breach of contract, breach of the common law duty of loyalty, civil conspiracy and tortious interference,” Iowa Capital Dispatchreported at the time, claiming that the pathologists were improperly attempting to lure clients away.
In a related case, Goldfinch pathologists Milless and Halverson have filed a state discrimination lawsuit against their former employer, “alleging they were paid $200,000 to $350,000 annually, which they claim was far less than what some of the less qualified male doctors were paid,” Iowa Capital Dispatch reported. That case goes to trial in August.
This is a plethora of lawsuits involving pathologists and the pathology practices in the communities where they formally practiced. Pathologists and group pathology managers may find useful insights from a study of the legal arguments made by the two parties, as well as the decisions laid down by judges in these court cases.
Managers of pathology groups and clinical laboratories can learn from the challenges confronting the radiology profession
Members of the Intersociety Committee of the American Society of Radiology (ACR) recently met in Coronado, Calif., to discuss the “most pressing” challenges to their profession and investigate possible solutions, according to Radiology Business. Many of these challenges mimic similar challenges faced by anatomic pathology professionals.
The radiology leaders identified seven of the “most important challenges facing radiology today.” They include: declining reimbursement, corporatization and consolidation, inadequate labor force, imaging appropriateness, burnout, turf wars with nonphysicians, and workflow efficiency, according to a report on the meeting published in the Journal of the American College of Radiology (JACR).
“Solving these issues will not be easy,” said Bettina Siewert, MD, diagnostic radiologist at Beth Israel Deaconess Medical Center (BIDMC) in Boston, Mass., professor of radiology at Harvard, and lead author of the JACR report, in the JACR. “This is a collection of ‘wicked’ problems defined as having (1) no stoppable rule, (2) no enumerable set of solutions or well-described set of permissible operations, and (3) stakeholders with very different worldviews and frameworks for understanding the problem,” she added.
“The Intersociety Committee is a freestanding committee of the ACR established to promote collegiality and improve communication among national radiology organizations,” JACR noted.
“Taken together, a ‘perfect storm’ of pressures on radiologists and their institutions is brewing,” said Bettina Siewert, MD (above), diagnostic radiologist at Beth Israel Deaconess Medical Center in Boston, Mass., professor of radiology at Harvard, and lead author of the JACR report. Wise pathology and clinical laboratory leaders will see the similarities between their industry’s challenges and those facing radiology. (Photo copyright: Beth Israel Deaconess Medical Center.)
How Radiology Challenges Correlate to Pathology Practices
Here are the seven biggest challenges facing radiology practices today as identified by the Intersociety Committee of the ACR.
Declining Reimbursement: According to the ACR report, radiologists in 2021 performed 13% more relative value units (RVUs) per Medicare beneficiary compared to 2005. However, the inflation-adjusted conversion factor fell by almost 34%––this led to a 25% decline in reimbursements.
This issue has plagued the pathology industry as well. According to an article published in the American Journal of Clinical Pathology (AJCP), prior to adjusting for inflation, the average physician reimbursement increased by 9.7% from 2004 to 2024 for all included anatomic pathology CPT codes. After adjusting for inflation, the average physician reimbursement decreased by 34.2% for included CPT codes. The greatest decrease in reimbursement observed from 2004 to 2024 was for outside slide consultation at 60.5% ($330.12 to $130.49), followed by pathology consultation during surgery at 59.0% ($83.54 to $34.29). The average CAGR was -2.19%,” the authors wrote.
“Our study demonstrates that Medicare physician reimbursement for common anatomic pathology procedures is declining annually at an unsustainable rate,” the AJCP authors added.
The radiologists who identified this trend in their own field suggest that medical societies could lead the push to minimize the reimbursement cuts. Pathologists could also adopt this ‘strength in numbers’ mentality to advocate for one another.
Corporatization Consolidation: The authors of the ACR report identified this issue as limiting job opportunities for radiologists particularly in private practice. Pathology professionals have seen the same trend in their field as well. Increasingly, small pathology groups have been consolidated into larger regional groups. Some of those larger regional pathology groups will then be acquired by public laboratory corporations.
The authors of the ACR report suggest radiologists should be educated on the pros and cons of consolidation. They also suggest pursuing unionization.
Inadequate Labor Force: In both radiology and pathology there is a supply-and-demand issue when it comes to labor. Staffing shortages have been felt across all of healthcare, but particularly among pathology groups and clinical laboratories. Siewert and her co-authors suggest a three-pronged approach to address this issue:
Creating residency positions in private practice.
Recruiting international medical graduates.
Increasing job flexibility.
Pathology professionals could apply these same ideas to help close the gap between the open positions in the field and the number of professionals to fill them.
Imaging Appropriateness: A gap between service capacity and service demand for radiology imaging has created a frustrating mismatch between radiologists and clinicians. Radiology experts point to overutilization of the service causing the supply-and-demand crisis. Comparatively, pathologists see a similar issue in complex cases requiring more pathologist time to come to an appropriate diagnosis and identify a care plan.
“To facilitate this reduction, better data on imaging outcomes for specific clinical questions are urgently needed,” the authors of the ACR report wrote as a possible solution. “Considering the magnitude of the mismatch crisis, radiologists may also need to consider expanding their consultative role to include that of a gatekeeper, as is done in other more resource-controlled countries.”
Burnout: Perhaps one of the most talked about subjects in the medical field has been burnout. The issue has been thrust to the forefront with the COVID-19 pandemic; however, the burnout crisis began before the pandemic. About 78% of radiologists surveyed for this report claimed to be exceeding their personal work capacity.
The authors of the ACR report suggest a structured approach to air grievances without descending into despair. “Using a team approach based on the concept of listen-sort-empower, burnout can be combatted by fostering free discussion between frontline workers and radiologists,” they said. “Facilitators unaffiliated with the radiology department can help to maintain focus on gratitude for positive attributes of the work and the institution as well as to keep the sessions on task and prevent them from devolving into complaint sessions with a subsequent loss of hope.”
A similar approach could be applied to pathology groups and clinical laboratory to combat worker burnout as well.
Turf Wars with Nonphysicians: Over the last five years the number of imaging exams being interpreted by nonphysician providers has increased by 30%, according to the ACR report. The writers emphasized the need for increased understanding and awareness about the importance of physician-led care. They suggest solidarity among hospital medical staff to provide a united front in addressing this issue in hospital bylaws.
In pathology, the counterpart is how large physician groups are bringing anatomic pathology in-house. This has been an ongoing trend for the past 20 years. It means that the pathologist is now an employee of the physician group (or a partner/shareholder in some cases).
Increase Workflow Efficiency: Image interpretation accounts for only 36% of the work radiologists perform, the ACR report noted. This issue has a direct counterpart in pathology where compliance requirements and various tasks take time away from pathologist diagnosis. These issues could be solved by working AI into tasks, delegating non-interpretive tasks to other workers, and improving the design of reading rooms. All of these possible solutions could also be applied to clinical pathologists.
These issues being faced by radiologists compare directly to similar issues in the clinical pathology world. Pathologists and pathology group managers would be wise to learn from the experience of their imaging colleagues and possibly adopt some of the ACR’s suggested solutions.
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.
