CEO SUMMARY: Taken collectively, the growing number of federal investigations of lab companies and health insurer lawsuits against lab companies alleging fraudulent business practices signals a disturbing new trend for the lab industry. In THE DARK REPORT’s typical hard-hitting analysis of an emerging clinical laboratory trend, it is noted that while these allegations are leveled at just a handful of …
Issue: Volume XXII No. 12 - August 24, 2015
ONE OF THE NATION’S LONGEST-RUNNING LAB OUTREACH JOINT VENTURES involving a public lab company and a major hospital came to a quiet end on June 30. That’s the day when United/Dynacare Laboratories, LLC, ceased to exist.
CEO SUMMARY: Taken collectively, the growing number of federal investigations of clinical lab companies and health insurer lawsuits against lab companies alleging fraudulent business practices signals a disturbing new trend for the lab industry. Although these allegations are leveled at just a handful of lab companies, the amount of money these labs took out of the system exceeds a billion dollars. Some experts expect payers will enact tough requirements to stop such abuses.
CEO SUMMARY: In an unusually strong move, health insurer Cigna is auditing laboratories, including some labs that do toxicology testing. In these audits, the health insurer seeks documentation that the testing is medically necessary and that the laboratories are collecting copayments and deductibles from patients before Cigna pays the labs for the toxicology test claims. A lawyer working on these cases says that tactic may violate some state prompt-payment laws.
LAST WEEK, A CALIFORNIA JUDGE APPROVED the settlement of a lawsuit that claimed Quest Diagnostics Incorporated had violated a state law that forbids selling services (in this case, lab testing) below cost.
CEO SUMMARY: Clinical labs are beginning to make the transition from a volume-based financial model to a model based on value-based payments. To survive this transition, labs must find ways to create value. The lab at Henry Ford Health System has identified 10 ways that it can contribute more value to physicians and its parent health system. One way is to help eliminate needless tests and processes. Other initiatives involve improving supplier processes, helping to reduce patient length of stay, creating a lab test formulary, and demonstrating the financial efficacy of all lab interventio
CEO SUMMARY: Seeing the changes overtaking pathology practices, Brazos Valley Pathology decided to sell two of its group practices to Aurora Diagnostics. Last month’s transaction was not designed to fix financial problems nor was it because of retiring pathologists. Rather, it was done proactively to ensure that BVP’s 11 pathologists had access to the resources of a larger pathology organization so that they could expand or add technology as needed in the future, while practicing independently.