Diagnostic laboratories must dig into where their suppliers source their items to avoid surprises
Clinical laboratories in the US are under additional financial and operational pressure because of tariff fluctuations from the federal government among global trading partners. This brief overview explores clinical lab tariff strategies that may help organizations better prepare for difficult stretches.
Across the overall laboratory industry—including diagnostics settings—average duties on imported lab equipment and consumables hover around 23%, with personal protective equipment, lab instruments, and supply chains facing even higher tariffs depending on their origin, according to a report from Lab Manager, a sibling brand to Dark Daily.
“Don’t assume that just because something is made in the United States that it will be tariff free because many of the components are not,” Drew Kevorkian, founder and CEO at ARES Scientific, told Lab Manager. ARES Scientific maintains a useful online tariff guide.
These nuances can escalate costs, complicate budgeting, and squeeze margins, all of which pose a risk to financial viability for clinical labs.
When it comes to clinical lab tariff strategies, the starting point is clear. “Assume costs are going up one way or another. The best thing to do is be well informed,” Drew Kevorkian, founder and CEO at ARES Scientific, told Lab Manager. (Photo copyright: Ares Scientific.)
Tariff-Influenced Areas for Clinical Labs to Consider
Managers and others who oversee budgeting or product procurement should think about the following aspects as they plan out their clinical lab tariff strategies:
Component audits. Labs should undertake an audit of their consumables down to the stock-keeping unit (SKU), which is an alphanumeric descriptor that identifies a product. The goal is to identify the source of the products to determine if they come from tariff-affected countries, Kevorkian noted. This exercise allows clinical lab professionals to forecast cost scenarios and make informed procurement decisions.
Reused lab instruments. Tariffs introduce an opportunity to think about acquiring certified refurbished lab equipment. Such items, often already in the US, can offer meaningful savings and avoid import duties, according to Lab Manager.
Investigate in vitro diagnostics (IVD) sourcing. Clinical labs should look into where their IVD suppliers get their components, according to The Dark Report. Even if a lab buys from American-based suppliers, the IVD companies a laboratory works with might have ties overseas that aren’t immediately obvious. “All IVD companies get components from China,” Rob LaCroix, executive director of global strategy at LTC LLC, told attendees at the 2025 Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management. “Just-in-time [purchasing] with tariffs is a problem,” he noted.
Clinical Lab Tariff Strategies Should Model Various Budget Scenarios
Lab Manager suggested that laboratories build tiered budget models that consider various tariff scenarios:
Baseline case assumes stable tariffs (around 23% as noted earlier).
Worst case simulates escalation or new restrictions.
Optimistic case explores tariff relief or exemptions.
These forecast ranges enable clinical labs to develop contingency plans, such as temporarily reducing discretionary spending or exploring ways to pass on incremental costs.
However, effective communication can bring more harmony to medical lab managers and scientists when it comes to compliance
Depending on how lab professionals view it, clinical laboratory regulations can be characterized as a series of checklists to fill out or an opportunity to grow an organization.
Leaning into the latter option will preserve regulatory compliance while also ensuring the operational health of the clinical laboratory.
At the Lab Manager Leadership Summit, Kelly VanBemmel, MS, MB(ASCP)CM (above) pressed attendees to open the lines of communication between bench scientists and lab managers when it comes to clinical laboratory regulations. (Photo copyright: Scott Wallask.)
‘There’s a Gap’ in How Both Sides View Regulatory Compliance
VanBemmel spent her presentation aiming to bridge the rift between how bench scientists look at clinical laboratory regulations compared to the views of medical lab managers.
“There’s a gap between how staff experience regulations and how management does,” she noted. “Staff typically think of compliance as a checklist to do their jobs.” Managers, however, need to understand a wider compliance picture. She illustrated her point by comparing views on the following regulatory bodies.
Staff understand that the FDA clears tests and devices for use in non-research environments, though not all consumables or equipment are in that setting.
Managers understand that the FDA develops rules and guidance for CLIA complexity categorization.
Communication Leads to Common Ground with Clinical Laboratory Regulations
Given the above differences among managers and staff, VanBemmel explained that both sides must frequently talk to each other to fill in the missing details.
“When you’re in the thick of regulations, communication becomes critical,” she said.
For example, bench staff may feel it is solely their manager’s responsibility to comply with clinical laboratory regulations. Savvy lab leaders will point out non-compliant conditions—such as diagnostic analyzer malfunctions and sample cross contamination—over which bench staff have direct control, helping workers better understand their responsibility when it comes to compliance.
On the other hand, lazy communication from managers to their bench scientists can stunt compliance efforts. She recalled a prior supervisor who often answered questions about regulations by asking: What does the standard operation procedure state?
“That answer wasn’t particularly helpful,” VanBemmel recalled. “That made me think that my supervisor didn’t understand nuance.”
Thorough communication builds greater trust, and seasoned clinical laboratory professionals of all ranks will quickly recognize the compliance benefits when the worker-manager relationship gels.
Robert Michel, founder of TDIG and editor-in-chief of The Dark Report, explained that the acquisition serves as step one to winding down his long career.
“First and most important, this starts my path toward retirement,” Michel said in the March 10 issue of The Dark Report. “I’ve served in the clinical laboratory industry for 34 years now. That’s one-third of a century!”
More Options Ahead for Dark Daily Readers
In purchasing the assets of TDIG, LabX Media Group adds to its powerhouse of resources for clinical laboratory leaders, including Today’s Clinical Lab, G2 Intelligence, and Lab Manager.
The deal will give readers of Dark Daily further options from which to get their laboratory science and operations information, as Today’s Clinical Lab provides free content in areas such as pathology and clinical laboratory technology.
Additionally, “The lab science coverage in Today’s Clinical Lab complements the business intelligence of The Dark Report, allowing LabX Media to offer a more comprehensive range of information for clinical lab professionals,” Today’s Clinical Lab wrote last week.
“The good news for all the clients and long-time readers of The Dark Report is that LabX has both the capital and the specialized expertise required to keep The Dark Report, Dark Daily, and the Executive War College at the top of their games going forward,” said Robert Michel (above), founder of The Dark Intelligence Group, which sold its assets to LabX Media Group. (Photo copyright: LabX.)
Statement on LabX Purchase of The Dark Intelligence Group
In a statement about this transaction, LabX Media Group CEO Bob Kafato said: “We are excited to formally recognize these new additions to the LMG family. TDIG’s flagship publication, The Dark Report, has a 30-year track record of delivering timely business intelligence to the leaders of North America’s most successful clinical laboratories, genetic testing companies, and anatomic pathology groups. During these same 30 years, the Executive War College has become the biggest and the highest-profile laboratory management conference in North America.”
Michel will serve as an advisor to LabX Media Group to ensure a smooth transition while continuing to provide strategic consulting services to the lab industry.
Who is LabX Media Group?
LabX Media Group is a leading business-to-business science media company delivering award-winning editorial coverage, essential industry news, analysis, and insights for members of the scientific research and life science communities. LabX Media Group connects laboratory professionals with resources to help them make smarter buying decisions through powerful, market-leading brands.
One interesting final fact: TDIG and LabX Media Group both were founded in 1995 and are celebrating their respective 30-year anniversaries, Michel noted.
Dettwyler is set to retire at age 92 after a long career helping clinical laboratories with their coding and billing systems
When William Dettwyler, MT, began working in a clinical laboratory, Harry Truman was president of the United States and scientists had not yet discovered the structure of DNA. Now, as he approaches his 92nd birthday in March, he is finally ready to retire from a career that has spanned more than seven decades, from bench work as a medical laboratory technician (MLT) to assisting labs with their medical coding and medical billing challenges.
Along the way, one of his coding innovations helped the State of Oregon save substantial sums in its Medicaid program. He also helped many medical laboratories increase reimbursement by correcting their coding mistakes. This from someone who left school after eighth grade to help on his family’s farm in rural Oregon.
In an exclusive interview with Dark Daily, Dettwyler discusses his long career and offered pointers for labs on improving their coding and reimbursement procedures.
Back in the 1980s, when he began his consulting work for labs, “they were very poor at billing,” he recalled. “Hospital billing staff didn’t understand lab coding. Reference laboratories didn’t do a good job of picking the right codes or even billing all the codes. Up until around the 1970s, hospitals didn’t even have to bill individual lab procedures with CPT codes. They billed with a revenue center code for all their lab services.”
These days “people are much more sophisticated,” he notes. “There are fewer coding problems compared to what it was in the 1980s and 1990s up to the 2010s.” However, he says he still has a handful of clients who call on his expertise.
“It was not unusual to go to a large university medical center and in three days tell the CFO on my exit review that the following year their lab would bring in about a half million more in revenue, just from my coding review. But I did not reveal to them that I had only gone to the eighth grade in a little one room school and was the lone graduate in my eighth-grade class,” wrote William Dettwyler, MT (above), owner of Codus Medicus in Salem, Ore., in an article he penned for Medical Laboratory Observer. For 75 years Dettwyler worked in the clinical laboratory industry. For much of that time he helped labs all over America improve their coding and reimbursement systems. (Photo copyright: LinkedIn.)
How It All Began
Dettwyler got his first taste of lab work in the early 1950s as a teenager washing glassware for a medical laboratory technician at a local medical practice. A few years later he completed an MLT program at Oregon Institute of Technology in Klamath Falls and landed his first lab tech job at a clinic in Portland.
His entry to consulting came in the early 1970s while he was working for a medical group in Salem. “I was helping the accounting personnel with their billing and noticed that Medicaid was not paying for a common test for syphilis that I was performing,” he recalled. “I contacted Medicaid, and they told me they didn’t understand laboratory procedures.”
After that, “they started to call me frequently with laboratory questions,” he said. “It wasn’t long before they asked me to help them on a part-time basis.” He also assisted with questions related to radiology.
By 1976, Dettwyler was devoting 35 hours a week to assisting the state Medicaid agency while still working as a lab tech.
Simple Hack Ends Overpayments
One of his career highlights came around 1981, when he discovered that the agency was overpaying for some pathology and radiology procedures by as much as 200%.
“Pathologists and radiologists are paid based on whether they are performing the complete procedure—the technical component and the professional component—or just the professional component, where they interpret the results,” he explained.
When billing for just the professional component, the physicians would add two digits to the standard code, so it might come in as 88305-26. However, the state’s computer system could only accommodate a five-digit code, so the state was paying as if the providers had done everything.
“The computer techs said the software couldn’t handle a seven-digit number in a five-digit box, so I devised a way for the computer to read the equivalent of seven digits,” he recalled.
His solution was to modify the codes so that the last digit was an alphabetic character. Instead of billing for code 88305-26, the physicians would bill for 8830F, and the state would pay them correctly.
Around that time, Dettwyler also began assisting a Medicare office in Portland. This forced him to cut back on his work as a lab tech. But he still worked around 60 hours a week.
“For most of my life, I’ve worked three jobs,” he said. “Work is my hobby.” He also had a large family to support—by 1976, he and his wife had 10 kids.
Transition to Lab Consulting
In 1986, the state was facing a budget shortfall and cut its Medicaid consultants, so Dettwyler decided to seek consulting work with labs while continuing to work at the bench.
“I really liked the coding because I had very little competition,” he said. “But I wanted to keep working in the laboratory mainly to understand the problems.”
While working for the state, Dettwyler attended coding seminars and workshops. He noticed that labs were losing revenue due to poor billing practices. “They didn’t understand all the coding complexities, so they really hungered for this kind of assistance.”
But first, he had to find clients. So he partnered with another lab tech who was offering similar consulting services.
Business picked up after Dettwyler contributed an article to the trade publication Medical Laboratory Observer about his process, which he calls “procedure code verification and post payment analysis.”
“That went like gangbusters,” he said. “We started getting calls from all over the country.”
Dettwyler later split from his partner and went to work on his own.
“I would sit down with the person who was responsible for coding, usually the lab or radiology manager,” he explained. “We would go over the chargemaster and cover every procedure to make sure the code and units were correct. When I was done, I would give them a report of what codes we changed and why we changed them.”
Beginning in 1989, he signed on as a contractor for another consultancy, Health Systems Concepts on the East Coast, where he remained until 2019.
Advice to the Current Generation
What is Dettwyler’s advice for someone who wants to follow in his footsteps and assist labs with their coding? “I wouldn’t recommend it now,” he said. “There’s less need for that kind of assistance than in the past.”
However, he does find that labs still run into problems. The greatest need, he says, is in molecular diagnostics, due to the complexity of the procedures.
In addition, labs are sometimes confused by coding for therapeutic drug monitoring, in which a doctor is gauging a patient’s reaction to a therapy versus screening for substance abuse. “Those issues are often misunderstood,” he said.
Microbiology also poses coding challenges, he noted, because of the steps required to identify the pathogen and determine antibiotic susceptibility. “It requires quite a bit of additional coding,” he said. “Some labs don’t understand that they can’t just bill a code for culture and sensitivity. They have to bill for the individual portions.”
Labs that work with reference labs also have to be careful to verify codes for specific procedures. “I’ll review the codes used by reference labs and, surprisingly, they’re not always correct. Reference labs sometimes get it wrong.”
If someone does want to become a coding expert, Dettwyler suggests that “they should first have experience as a lab tech, especially in microbiology, because of the additional coding. And they should try to work with somebody who is already doing it. Then, they should work with the billing department to learn how it operates.”
He also advises clinical laboratory managers to follow the latest developments in the field by reading lab publications such as The Dark Report. “You have to do that to keep current,” he said.
Despite never completing high school, Dettwyler eventually received his GED and an associate degree. “But the degrees didn’t really help me,” he said. “Much of it was on-the-job training and keeping my eyes open and listening.”
“The timing of EWC with the release of this policy couldn’t be better,” CEO and founder of Momentum ConsultingValerie Palmieri told Dark Daily in an interview at Monday night’s opening reception. “It’s a great conference to not only catch up with colleagues but really hear and have those difficult discussions about where we are today, where we’re going, and where we need to be.”
Final LDT rule ‘radically’ different than draft
Tim Stenzel, MD, PhD, former director of the FDA’s Office of In Vitro Diagnostics called the finalized rule “radically different” from the proposed rule. In some ways it is less complex: “The bar is lower,” he said, noting that he was voicing his personal views and not those of the federal agency. “I was convinced that there would be lawsuits, but I’m now not sure if that’s advisable.”
Still, laboratory teams will have to parse the more than 500-page document to determine how the final rule relates to their specific circumstances. After that, it won’t be as challenging, Stenzel said.
His advice: First, read the rule. Second, reach out to FDA for help—he’s sure, he said, that the office is geared up to respond to a “ton of questions” about the implications for individual labs and are standing by to answer emails from labs. And, he added in a discussion session, emailing the agency is free.
The final rule will be in force 60 days after it’s published. Stenzel provided a timeline for some of the milestones:
1 Year: Comply with MD(AE) reporting and reporting of corrections and removals.
2 Years: Comply with labeling, registration and listing, and investigational use requirements.
3 Years: QS records and, in some cases, design controls and purchasing controls.
3.5 Years: Comply with high risk (class III) premarket review requirements.
4 Years: Comply with moderate and low-risk premarket review requirements.
Executive Chair and CEO of XiFin, Inc.Lâle White welcomed the audience with a morning keynote entitled “Big Changes in Healthcare” on new regulations and diagnostics players poised to reshape lab testing.
The diagnostics business is in constant flux, she noted, from payer requirements to greater regulatory and compliance burdens on labs. Other factors include the growing senior population and increasingly complex health conditions, rising costs throughout the healthcare ecosystem, falling funding and reimbursement, and staffing shortages.
As for the economic challenges, consumers are increasingly making decisions based on cost, convenience and quality. The population is shifting to Medicare advantage, which is more cost effective. But changes to the star ratings system will mean lower pay for payer organizations. Those companies will, in turn, mitigate their losses by making changes to pre-authorizations and tightening denials, even for clean claims.
Still, White said, more money isn’t the answer.
White urged the audience to use technology, including artificial intelligence and advances in genetic testing, to manage these and other industry changes.
“We need to optimize the tests we order,” she said. “And if we did that, lab diagnostics really has the potential to change the economics of health and improve outcomes.”
The FDA, Stenzel added, is “very interested” in stimulating innovation, building on the laboratory industry’s success in responding swiftly to the COVID pandemic and outbreaks of Monkey Pox, for example.
He shared lessons learned from recent public health emergencies, talked about CDC’s efforts to engage with clinical labs to improve future public health readiness and response and provided an overview of the CDC’s first laboratory-specific center.
“Laboratories are fundamental to public health,” he said. The industry is on the “front lines” when it comes to identifying threats, responding to them, and preparing for future responses.
Robert Michel, Editor-in-Chief of The Dark Report wrapped up the day’s regulatory discussions with a general session on the “regulatory trifecta” that includes the LDT final rule, CLIA regulations, and private payers’ policies for genetic claims.
