| R. Lewis Dark:
Financial Hurricane Hits Entire Lab Testing Industry
FOR ABOUT 18 MONTHS NOW, THE ENTIRE LABORATORY TESTING INDUSTRY has
been hit by an ongoing series of painful cuts to lab test fees and announcements
of more restrictive coverage guidelines.
Even today, there is additional news of rock bottom prices to share with
you. In this issue, you'll read about Aetna, Inc.'s latest strategy to reduce what
it spends on lab testing. Pathologists, for you, the news is a global 88305 fee of
just $35.05! Clinical lab managers, your news is an 80053-Comprehensive
Metabolic Panel reimbursed by Aetna at $6.54 and an 85027-Complete CBC
Automated for which it will pay just $4.00. These prices take effect on July 1,
2013. (See pages 16-18.)
It this a smart move by Aetna? I think not. It is unlikely that routine chemistry
panels and CBCs are the primary source of the year-over-year increase in what
Aetna and other payers spend on lab testing. Assuming that to be true, could
slashing prices for routine assays down to the level of marginal cost prove to be
rapidly disruptive to physicians who rely on timely, accurate lab tests to provide
patient care that delivers ever-better outcomes? Time will provide that answer.
In the meantime, lab administrators and pathologists must consider the consequences
of Aetna's latest price-cutting effort. They cannot view the Aetna pricing
in isolation. That is, if labs accept the Aetna pricing, are they foolish enough
to believe that UnitedHealthcare, WellPoint, CIGNA, Humana, and other payers
are not going to come after them for further price concessions? It would certainly
be wise for lab industry associations and professional groups to quickly
band together and firmly oppose this latest attempt by a major national health
insurer to cram money-losing reimbursement rates on the entire lab industry.
I don't think it is an overstatement to say that the laboratory testing industry
is currently beset by a major hurricane of lab test price cuts. At every turn,
there is at least one major payer doing one of three things: 1) excluding laboratories
as providers from its network; 2) issuing coverage guidelines that
restrict beneficiaries' access to certain lab tests; and, 3) arbitrarily dropping
the price it pays for significant types of lab tests by substantial amounts.
It is essential that lab leaders step forward and fight the battle to maintain
fair and adequate reimbursement for the laboratory tests that underpin much
of the essential healthcare in this nation.
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Much Uncertainty About
Pay for Molecular Codes
Medicare contractors posting prices that are
40% to 50% less than what labs received in 2012
CEO SUMMARY: Having gone unpaid since January 1 for the
114 new molecular CPT codes, many clinical labs and pathology
groups have stopped running these tests or laid off staff. Some
are considering closing their doors. Evidence indicates that certain
Medicare contractors are deciding that some molecular tests
are not medically necessary. Medicare officials launched the 60-
day comment period on May 9, which gives labs until July 8 to
submit comments about pricing and coverage decisions.
Health Insurers See Big
Increase in Lab Utilization
Spending on clinical lab testing growing
at twice the rate of spending on all other care
CEO SUMMARY: In a recent public workshop, managed care
executives revealed that the annual cost of outpatient laboratory
testing is increasing at twice the rate of all other medical services.
One big driver in the increased spending on lab testing is
increased utilization of lab tests by physicians-particularly
expensive molecular diagnostic assays and genetic tests. This
trend is one reason why private health insurers are taking steps
to control the year-over-year increase in the cost of lab testing.
Why One Molecular Diagnostics
Company Closed Its Doors
Reimbursement just one of many issues at Pathwork Diagnostics
CEO SUMMARY: When executives
closed the doors of Pathwork Diagnostics
last month, the simple explanation was
that reimbursement for its proprietary
molecular diagnostic test was inadequate.
Indeed, that was part of the story.
But other factors played significant roles
in impeding growth at this lab company.
Here is an inside look at six factors which
contributed to the lab firm's closure.
Managed Care Update: Aetna To Lower Lab Test Prices, New Fees Are Effective on July 1
Move is insurer's latest strategy to reduce
what it spends on laboratory testing services
INTELLIGENCE: Late & Latent
Pathologist to Edit
Next Cancer Staging
Manual
ADD TO: Global Labs
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