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Clinical Laboratories and Pathology Groups

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Presidents of Roche Diagnostics and Mayo Clinic Laboratories Discuss PAMA Reform and Upcoming Deep Cuts to Reimbursement for Common Lab Test

Organizations representing clinical laboratories and other critical healthcare providers urged Congress to pass the Saving Access to Laboratory Services Act by January 1, 2023, to prevent deep cuts in reimbursements

Lessons about the essential role of clinical laboratories during a pandemic was the central theme in a significant publication released recently. The authors were the presidents of two of the nation’s largest healthcare companies and their goal was to connect the value clinical labs delivered during the COVID-19 pandemic to the financial threat labs face should the Protecting Access to Medicare Act of 2014 (PAMA) fee cuts coming to the Medicare Part B Clinical Laboratory Fee Schedule (CLFS) be implemented.

The two healthcare executives are William G. Morice II, MD, PhD, CEO/President, Mayo Clinic Laboratories in Rochester, Minn., and Matt Sause, President of Roche Diagnostics North America in Indianapolis. On January 1, 2023, Sause will become Global CEO of Roche Diagnostics, Basel, Switzerland.

They published their article in RealClearPolicy titled, “Medicare Cuts for Diagnostic Tests Would Show the Government Has Taken the Wrong Lessons from COVID-19.”

William G. Morice II, MD, PhD and Matt Sause

In an article for RealClearPolicy, healthcare executives William G. Morice II, MD, PhD (left), CEO/President, Mayo Clinic Laboratories, and Matt Sause (right), President of Roche Diagnostics North America wrote, “Without PAMA reform, labs could face drastically reduced reimbursement for commonly performed lab tests for a host of diseases.” (Photo copyrights: Mayo Clinic Laboratories/Roche Diagnostics.)

IVD Companies and Clinical Laboratories Sound Alarm

Morice and Sause warn that—without PAMA reform—the nation’s vital medical laboratories will face “drastically reduced reimbursement” for commonly performed lab tests for diseases, including diabetes, heart disease, and cancer. Reimbursement cuts may cause clinical labs serving “the most vulnerable and homebound” to reduce services or close, they noted.

“To emerge from nearly three years of a pandemic by sending the signal that austerity is our nation’s health policy when it comes to testing and diagnostics would be a significant mistake,” they wrote.

“If the proposed cuts to reimbursements for diagnostic tests are allowed to take effect, disparities caused by challenges with accessing diagnostic tests will likely grow even further,” the authors continued.

However, they added, “The Saving Access to Laboratory Services Act [SALSA] would reform PAMA to require accurate and representative data from all laboratory segments that serve Medicare beneficiaries to be collected to support a commonsense Medicare fee schedule that truly represents the market.”

How PAMA Affects Clinical Laboratory Reimbursements

PAMA, which became law in 2014, was aimed at marrying Medicare Part B Clinical Laboratory Fee Schedule (CLFS) reimbursement rates to rates medical laboratories receive from private payers, the National Independent Laboratory Association (NILA) explained in a news release.

But from the start, in its implementation of the PAMA statute, the methods used by the federal Centers for Medicare and Medicaid Services (CMS) to collect data on lab test prices paid by private payers—which were the basis for calculating new lab test prices for the Medicare program—were criticized by many laboratory professionals and other health experts.

Critics frequently pointed out that several types of clinical laboratories were excluded from reporting their private payer lab test prices. Thus, the data collected and used by CMS did not accurately represent the true range of prices paid for clinical lab tests by private health insurance plans, said lab industry groups.

CMS regulations “exclude most hospital outreach laboratories and physician office laboratories from data collection. This approach depresses median prices and has led to deep cuts to lab reimbursement. Many tests were cut up to 30% in 2018 when the new system went into effect,” the America Association for Clinical Chemistry (AACC) noted in a statement.

On September 8, just weeks after publication of the article authored by Morice and Sause,  26 organizations representing clinical laboratories and diagnostics manufacturers sent a letter to Congressional leaders. In it they described the financial impact on labs due to the current law’s omission of some outreach and physician office lab testing, and they urged the passage of the SALSA legislation.

The organizations included the:

“The significant under-sampling led to nearly $4 billion in cuts to those labs providing the most commonly ordered test services for Medicare beneficiaries,” the organizations wrote in their letter. “For context, the total CLFS spend for 2020 was only $8 billion.”

Reimbursement Cuts to Lab Tests are Coming if SASLA Not Passed

“Without Congressional action, beginning on Jan. 1, 2023, laboratories will face additional cuts of as much as 15% to some of the most commonly ordered laboratory tests,” the NILA said.

“Enactment of the Saving Access to Laboratory Services Act (SALSA/H.R. 8188/S.4449) is urgently needed this year, to allow laboratories to focus on providing timely, high quality clinical laboratory services for patients, continuing to innovate, and building the infrastructure necessary to protect the public health,” NILA added.

In an editorial she wrote for Clinical Lab Products, titled, “Be a Labvocate: Help Pass SALSA Legislation,” Kristina Martin, Clinical Pathology Operations Director, Department of Pathology, University of Michigan Medicine said, “The SALSA legislation provides a permanent, pragmatic approach to evaluating the CLFS, eliminating huge swings, either positive or negative as it pertains to Medicare reimbursement. It also allows for a more comprehensive evaluation of data to be collected from a broader sampling of laboratory sectors.”

According to an ACLA fact sheet, SALSA:

  • Uses statistical sampling for widely available tests performed by a “representative pool of all clinical laboratory market segments.”
  • Introduces annual “guardrails” aimed at creating limits for reductions as well as increases in CLFS rates.
  • Excludes Medicaid managed care rates since they are not true “market rates.”
  • Gives labs the option to exclude mailed remittances from reporting if less than 10% of claims.
  • Eases clinical labs’ reporting requirements by changing data collection from three years to four.

Make Your Views Known

Proponents urge Congress to act on SALSA before the end of the year. Clinical laboratory leaders and pathologists who want to express their views on SALSA, test reimbursement, and the importance of access to medical laboratory testing can do so through Stop Lab The website is sponsored by the ACLA.

Donna Marie Pocius

Related Information:

Medicare Cuts for Diagnostic Tests Would Show the Government Has Taken the Wrong Lessons from COVID-19

H.R.8188: Saving Access to Laboratory Services Act

S.4449: Saving Access to Laboratory Services Act

NILA Applauds Introduction of the Saving Access to Laboratory Services Act

AACC Supports Saving Access to Laboratory Services Act

Letter from Leading Provider Groups on Passing the Saving Access to Laboratory Services Act

Be a Labvocate: Help Pass SALSA Legislation

Set a Sustainable Path for Patient Access to Laboratory Services, and Keep Our Clinical Laboratory Infrastructure Healthy

Pathologists at Michigan Health Find Evidence That COVID-19 Survivors Who Continue to Experience Respiratory Symptoms May Have Had Lung Disease Prior to Being Exposed to the SARS-CoV-2 Coronavirus

These findings hint at the role of pre-existing conditions in raising the risk of an individual having a severe case of COVID-19 once infected

At the University of Michigan, a team of pathologists have been researching the factors that might cause some patients infected by SARS-CoV-2 to suffer persistent respiratory problems, often described as “long COVID.” They have identified factors that place some individuals at higher risk for these problems.

Little is known about how the SARS-CoV-2 coronavirus affects the body long-term. Millions of people who have survived COVID-19 infections are living with chronic symptoms, including persistent respiratory problems such as shortness of breath. However, until now, it was not clear what may be causing these symptoms in some people but not others, even after the coronavirus has completely cleared their bodies.

Now, anatomic pathologists at Michigan Medicine, formerly the University of Michigan Health, believe they may have discovered what is causing ongoing respiratory problems in some patients who have recovered from the COVID-19 infection—pre-existing conditions.

The researchers examined lung biopsies from COVID-19 patients who continued to experience lingering symptoms. They discovered in some individuals lung damage that was present prior to contracting the virus.

Jeffrey Myers, MD

“Some of the early publications and popular press around long COVID has implied or assumed that once you had COVID, everything that happens next is COVID-related,” said anatomic pathologist and senior author of the study Jeffrey Myers, MD (above), Vice Chair for Clinical Affairs and Quality at Michigan Medicine, in a news release. “Of course, that might or might not be true,” he added. (Photo copyright: University of Michigan.)

The research team analyzed lung biopsies from 18 COVID-19 survivors who were still experiencing respiratory symptoms or had abnormal computed tomography (CT) scans after the virus was no longer present in their bodies. The researchers found ground glass opacities on the radiological scans of 14 of those patients.

According to the news release, this finding indicates there were “areas of the lungs that appear as a cloudy gray color as opposed to the dark color of normal air-filled lungs, on a chest X-ray or CT scan.”

The biopsies exhibited evidence of pre-existing lung scarring and proof of diffuse alveolar damage, which is typically seen in patients with acute respiratory illnesses. Only five of the patients examined in the study were known to have lung disease prior to their COVID-19 diagnoses.

The researchers found that the most common condition present in these 18 patients was usual interstitial pneumonia (UIP). This condition, also known clinically as idiopathic pulmonary fibrosis (IPF), is a common form of pulmonary fibrosis that is characterized by progressive scarring and stiffening of both lungs.

“We were seeing a lot of UIP, which isn’t the pattern we tend to associate with acute lung injury,” said Kristine Konopka, MD, Clinical Associate Professor at Michigan Medicine and lead author of the study, in the news release. “So, we think these are patients who had lung disease prior to COVID and maybe they just weren’t being followed by primary care physicians. They then had COVID, are still sick, and their UIP is finally being picked up.”

Could Patients Have Lung Disease and Not Know it?

“The notion,” Myers noted in the news release, “that a person could have chronic lung damage and not know it was unheard of until relatively recently.” He also explained that UIP/IPF is a progressive disease that gets worse with time and that an infection like COVID-19 can accelerate the illness to a more serious condition known as an acute exacerbation of IPF, which can lead to death.

“SARS-CoV-2 comes along and does to the lung, from a pathology perspective, exactly what happens with an acute exacerbation,” Myers said.

The researchers also stated that it’s impossible to determine for certain whether the SARS-CoV-2 virus caused the UIP/IPF without the existence of full clinical histories of the patients prior to their COVID-19 diagnoses. They hope their research will motivate clinicians to be cautious before automatically attributing respiratory symptoms to long COVID in survivors of the virus. It is possible that the lung damage was present prior to the coronavirus.

“You shouldn’t make assumptions but [instead] ask the right questions, the first of which would be ‘I wonder if this is really COVID?’ What you do after that depends on the answer to that question,” he added.

The Michigan Medicine researchers published their findings in the journal eClinicalMedicine, titled, “Usual Interstitial Pneumonia Is the Most Common Finding in Surgical Lung Biopsies from Patients with Persistent Interstitial Lung Disease Following Infection with SARS-CoV-2.”

This research is an example of how pathologists can add insight and value into the deeper understanding of the processes involved in specific diseases. Dark Daily invites any of our readers who are aware of other pathologist-authored studies or published papers about COVID-19 to alert us to the availability of those works.

JP Schlingman

Related Information:

Pathologists Find Evidence of Pre-existing Chronic Lung Disease in People with Long COVID

Usual Interstitial Pneumonia is the Most Common Finding in Surgical Lung Biopsies from Patients with Persistent Interstitial Ling Disease Following Infection with SARS-CoV-2

Even Higher-Income Americans are Frustrated with High Health Insurance Costs; Many Drop Coverage and Switch to Concierge Care; Clinical Laboratories May Be Affected by Trend

From reduced medical laboratory test ordering to dealing with high-deductible health plans (HDHPs), clinical laboratories and anatomic pathology groups are impacted daily by rising healthcare costs. Until now, however, one demographic was not affected—affluent Americans. But that is no longer the case.

According to Bloomberg, thousands of people—some earning more than $125,000 a year—are now foregoing health insurance altogether and instead choosing concierge medicine because it costs less.

“We’re not poor people, but we can’t afford health insurance,” Mimi Owens, a resident of Harahan, La., told Bloomberg.

Priced Out of the Market

Bloomberg also reported on a Marion, N. C., family whose monthly insurance premium of $1,691 in 2017—triple their house mortgage payment—was increasing to $1,813 in 2018. The couple, who had no children and an income of $127,000 from a small IT business plus a physical therapy job, had a $5,000 deductible. However, their total annual insurance investment after premiums was about $30,000, and that was before any healthcare claims.

They decided, instead, to purchase care through a membership in a physician practice.

“Self-employed people are being priced out of the market,” Donna Harper, an insurance agent in Crystal Lake, Ill., told Fierce Healthcare. The self-employed business owner reportedly had to cancel her Blue Cross Blue Shield (BCBS) plan because the premiums totaled $11,000 annually with a $6,000 per year deductible.

“I haven’t been in the hospital for 40 years, so I’m going to roll the dice,” she stated.

Increasingly, this is the choice many people with higher incomes are making and it is impacting both the healthcare and health plan industries.

Huge Deductibles, Skyrocketing Premiums!

Regardless of whether people purchase their health coverage through the Affordable Care Act (ACA) Health Exchanges or their employers, deductibles can be as high as $5,000/year for individuals and $10,000/year for family coverage, or more.

And, in 2017, annual premiums for workers averaged $18,764, a Kaiser Employer Survey reported.

According to CNN Money, ACA premiums for silver plans in 2018 were 37% higher than the previous year, and the average increase for all health exchange plans since 2017 was 24% nationwide.

And, while financial assistance is available, people making more than 400% over the Federal Poverty Level will not qualify for premium subsidies from the ACA, according to

Lots of “Essential” Services, But Narrow Networks

Critics of the ACA point out that one of the reasons Health Exchange plans are so expensive is because every plan is required to have “essential health benefits” that many enrollees to not need or want. For example, a childless couple in their 50s has to pay for an ACA plan that includes services such as maternity, newborn, and pediatric care.

Another cause for sky rocketing costs are the ACA’s limited number of health plans in many regions. In fact, according to Bloomberg, half of the counties in the US—which together cover 30% of all Americans—have just one insurance company available to the Health Exchange customers.

Uninsured Rate Edges Up in 2017

So, it may come as no surprise that after declining over recent years, the uninsured rate noted at 2017 year-end actually increased by 1.3%, which translates to 3.2-million Americans, a Gallup and Sharecare analysis found (see image below).

That report attributes the uptick in the uninsured population, the largest since ACA’s start, to:

  • Health insurance companies pulling out of the ACA exchanges;
  • Costs for remaining insurance plans too high for consumers to bear; and,
  • Those Americans who earn too much for federal subsidies opting to go without health insurance.

Concierge Care Instead of Health Insurance

Many people do not have health insurance, but that does not mean they are without healthcare. For example, the N.C. couple named in the Bloomberg article decided to pay $198 a month (instead of the $1,813 annual premium) for private membership (AKA, concierge care) in a doctor’s office practice. The fee gives them unlimited office visits, discounts on prescription drugs, and lab tests.

The Detroit News, in its report on the launch of University of Michigan Medicine’s Victors Care in April, called membership-based practice programs a “revolutionary shift in medicine.” Victors Care plans, which start at $225 a month, reportedly give people unlimited office visits. (See Dark Daily, “Some Hospitals Launch Concierge Care Clinics to Raise Revenue, Generating both Controversy and Opportunity for Medical Laboratories,” April 23, 2018.)

And HealthLeaders Media noted that about 34% of medical practices surveyed indicated that within three years they may add a membership-based payment model.


Dr. James Mumper, MD (left), founder and chief medical officer of PartnerMD, a concierge care practice in Richmond, Va., treats Howard Cobb (right), who has been Mumper’s patient for 14 years. (Photo copyright: Richmond Magazine/Jay Paul.)

For the doctor’s part, concierge medicine has appeal. Physician want to spend more time with their patients and have fewer patients, noted the Richmond Times-Dispatch.

“So much of being a good primary care physician is listening and having time to listen,” stated Jim Mumper, MD, Chief Medical Officer, PartnerMD, a concierge medical practice he helped start in Richmond, Va. “This model allows the physicians to do the things that cause them to want to go to medical school and do all the training and all the sleepless nights—to feel at the end of the day that they’ve really helped a lot of people.”

Clearly, the healthcare and health insurance industries are under enormous pressure to address rising costs and evolve to better business models. Clinical laboratories are necessarily along for that ride, and in many ways, must be ready to react quickly to changes coming from both marketplaces.

 —Donna Marie Pocius

Related Information:

Why Some Americans are Risking It and Skipping Health Insurance

Plans with More Restrictive Networks Comprise 73% of Exchange Market

Millions More Americans Were Uninsured in 2017

2017 Employer Health Benefits Survey

Premiums for the Benchmark Silver Obamacare Plan Will Soar 37%, on Average, for 2018, According to Federal Data

US Uninsured Rate at 12.2% in Fourth Quarter 2017

University of Michigan Fuels Debate on Retainer-Based Health Care

34% of Medical Practice Models Considering Membership Practice Models

A Different Kind of Practice

Back to the Future of Healthcare with A Higher Price Tag: Concierge Medicine Offers Patients Unique Care

Some Hospitals Launch Concierge Care Clinics to Raise Revenue, Generating both Controversy and Opportunity for Medical Laboratories