This is an excerpt of a 3,075-word article in the December 20, 2021 issue of THE DARK REPORT (TDR). The full article is available to members of The Dark Intelligence Group.
CEO SUMMARY: Much like 2020, the pandemic dominated our new list of the top 10 lab stories for 2021. Beyond COVID-19 testing, the virus crept its way into long-term trends, such as pathology jobs and technology innovation. New ways of delivering healthcare will need responses by clinical laboratories, as will significant developments in the regulatory environment and related reimbursement. The biggest message emerging for our list of 2021’s top 10 lab stories is that changes far beyond the clinical lab’s walls are wielding large influence on the future of day-to-day operations.
FOR THE SECOND YEAR IN A ROW, the public health emergency caused by the SARS-CoV-2 pandemic takes the top spot among the 10 most influential stories in 2021 that affected clinical laboratories and pathology groups.
Life with COVID-19 will be a defining period for generations of Americans and the healthcare system upon which they rely. The clinical lab profession continued to play an oversized role in the pandemic, performing and analyzing hundreds of millions of SARS-CoV-2 tests administered since this coronavirus arrived in the U.S. almost two years ago.
Looking at the full list of top 10 lab stories this year, COVID-19 stretched its grip into at least four of them, making the pandemic an overlapping topic. But this year also saw major developments that will need immediate responses by all labs, particularly changes involving government regulation and new managed care contracting practices, as noted below:
- A busy regulatory year, with important new or revised laws coming into play.
- Technology’s ever-growing presence in the day-to-day life of lab directors and pathologists—for both good and criminal purposes.
- The continued shift in healthcare delivery that is driven by the patients themselves and how they want to receive their tests and treatments.
One big unknown hanging over the future of healthcare and the profession of laboratory medicine is whether COVID-19 becomes endemic even with mass vaccinations occurring. Also unknown is whether a future variant will emerge that proves resistant to vaccines and therapies currently used to treat infected patients.
For clinical laboratories, that means continued, long-term testing will be required to monitor COVID-19, much like influenza. (See story 1, below.)
The pandemic also influenced pathology jobs, which, in another top 10 lab story, are in high demand as an older generation retires and fewer new doctors come forward to replace them. This trend is related to a new term that is linked to the pandemic: the Great Resignation, also often described as the Big Quit. As The Atlantic noted, “The term Great Resignation was likely coined by Anthony Klotz, a professor at Texas A&M, in May ; at the time, he framed a mass exodus from the workforce as a prediction for this year.”
In a paper released last month, the World Economic Forum pointed out two dynamics of the Great Resignation that must be dealt with by clinical laboratories and anatomic pathology groups. One is that “resignation rates are highest among mid-career employees,” and the other is that “resignation rates are highest in the technology and healthcare industries.”
Regulatory: Good and Bad
But 2021 has not been a year dominated by bad news or negative developments. In another top 10 lab story, 2021 started with good news (for once) from two federal agencies as revised new final rule versions of the Stark Rule and Anti-kickback Statute went into effect on Jan. 1, 2021. (See story 2, below.)
The move cleared up confusion between the two regulations for laboratory directors and their compliance teams.
Yet throughout the year, another regulatory effort grew that—like other laws—threatens reimbursements to laboratories for testing services. The No Surprises Act, which goes into effect on Jan. 1, 2022, generally bans copayments for certain services such that a patient’s cost cannot be higher than what they would pay in-network. This is a legislative and regulatory response to the practice—conducted by many providers including anatomic pathologists and some labs—of submitting high-priced bills in order to be paid at out-of-network rates.
The No Surprises Act aims to protect consumers caught off guard by unanticipated, higher out-of-network bills and cost sharing. From the patients’ perspective, added protection is welcome because it keeps more money in their pockets. But the opposite will happen for labs that do not have in-network status with most health plans. (See story 4, below.)
Fueled by technology advancements and nudged further by the pandemic, new testing and analysis methods found fertile ground in the clinical laboratory industry.
Artificial intelligence (AI) seemed to finally stake its ground in aiding billing, operations, and diagnosis. Digital pathology in particular enjoyed a surge thanks to AI and the pandemic. Additionally, the federal Food and Drug Administration warmed up to AI as a tool to diagnose prostate cancer. (See stories 4 and 6 below.)
For more than 20 years, The Dark Report has published its pick of the 10 biggest lab stories for the year about to end. Because our picks and our analyses are on the record, it demonstrates to clients and careful readers that we tend to be on the money at highlighting those developments that should get priority attention from clinical lab administrators and pathologists.
For that reason, we consistently recommend that every lab should incorporate the current year’s top 10 lab stories into their strategic planning. These top 10 lab stories typically represent important new developments that are in the process of establishing deep roots. Such timely strategic planning can help astute lab leaders position their laboratories to deliver a high level of clinical testing and other services, while doing it in a financially-sustainable manner.
WE’RE GUILTY—ALONG WITH MANY OTHERS—of assuming the pandemic was on its way out this year after being the top challenge for clinical laboratories in 2020.
What shouldn’t be lost on laboratory directors and pathologists is that SARS-CoV-2 has a bad habit of rising back up again. The resulting burdens placed on clinical labs may not be going away for a long time, especially if COVID-19 becomes endemic or a seasonal challenge like influenza. (See TDR, Nov. 8, 2021.)
Surges of the coronavirus in the winter and of the Delta variant over the summer finally waned, but then came another variant in the fall: Omicron. Once again, testing demand has outstripped the healthcare system’s ability to provide the tests in some areas and new emphasis is being placed on at-home rapid testing.
The question of whether SARS-CoV-2 is a pandemic that fades, as did SARS in 2003, or becomes endemic and a respiratory virus that shows up every season like influenza and the common cold, is of major concern to clinical lab administrators. That’s because clinical labs and pathology groups must continue to serve physicians and patients with the usual menu of routine, reference, and esoteric testing.
What is true as of today is that most laboratories have mastered the duality of providing timely COVID-19 test results even as they continue to serve the regular, ongoing demand for lab testing by client physicians and their patients.
IN WELCOME NEWS, revisions to the federal Anti-Kickback Statute (AKS) and the Stark Law went into effect on January 19. The changes clear up confusion for clinical laboratories and pathology groups about conflicting language between the two regulations and how to best comply. (See TDR, March 22, 2021.)
Regulators first proposed these changes in 2019, and in December 2020, the revisions were finalized by the Centers for Medicare and Medicaid Services (CMS) and the Department of Health and Human Services (HHS) Office of Inspector General (OIG).
The changes sought to clarify what labs encounter when contracting with insurers and physician groups in care-coordination arrangements. Federal officials recognized that the Stark Law and AKS can impede care coordination.
One of the highlights was CMS, for the first time, defining what “commercially reasonable” means, as that term is often used in many Stark Law exceptions. Now, an arrangement is commercially reasonable if it makes good business sense, even if it does not turn a profit.
It’s likely most laboratory and pathology compliance teams have reviewed these changes, but if not, add it to your to-do list for the new year.
In February, a federal appeals court upheld that it is a violation of the Anti-Kickback Statute to pay sales commissions to independent contractors working as sellers for clinical labs and pathology groups. (see TDR, May 3, 2021.)