In Texas, BeaconLBS Start Will Be Delayed

UnitedHealthcare has yet to announce new date for when laboratory claims impact will commence

CEO SUMMARY: UnitedHealthcare will not implement the claims impact part of its laboratory benefit management program in Texas on March 1, 2017, as it had previously announced. Opposition to the program and the requirement that physicians use the BeaconLBS system when ordering about 79 lab tests is building among physicians in Texas. Officials from the Texas Society of Pathologists and the Texas Medical Association are voicing concerns about this scheme.

THERE’S A NEW TWIST in the plans by UnitedHealthcare to launch its controversial laboratory benefit management program in Texas. Having run the test phase of the program since Jan. 1, UHC decided to delay implementation of the claims implementation portion of the program. This part of the program was due to start March 1.

The delay comes as the Texas Society of Pathologists raises questions about the potential conflict of interest that exists in UnitedHealthcare’s contract with Laboratory Corporation of America to implement LabCorp’s BeaconLBS system as a way to manage lab test utilization and determine whether labs will or will not be paid for performing tests. BeaconLBS is a subsidiary of LabCorp.

In an email to TSP members on Jan. 20, TSP President Kevin D. Homer, MD, outlined risks to clinical labs that participate in the BeaconLBS program. “At our most recent conference, TSP learned that claims for ‘decision support tests’ submitted by ‘labs of choice’ will be paid by BeaconLBS from capitated funds the program receives from UHC,” Homer wrote.

“This means that BeaconLBS, a wholly- owned subsidiary of LabCorp, will have access to claims data from ‘laboratories of choice’ in Texas, including information about fees, clients, volumes, and ordering patterns.

“UnitedHealthcare claims there is a firewall preventing data flow from BeaconLBS to its parent company and asks Texas pathologists to trust that LabCorp will not receive or use any such information,” Homer added. “Obviously, this situation is unacceptable to the TSP.”

Texas Labs have Concerns

TSP is considering bringing the issue to the attention of the Texas Legislature, he added. Also, he wrote, during the delay, BeaconLBS will discontinue outreach to network providers. In addition, UHC said it will continue to work with TSP about its concerns about the programs, he noted.

In its correspondence with UnitedHealthcare, “TSP has detailed specific concerns about the implementation, utilization, and quality impact of this program,” Homer continued. “Our society will continue to consider all options to ensure that Texans continue to have access to high quality pathology services, including potential legislative changes to protect patients during the current legislative session, which runs through the end of May 2017.” The Texas Society of Pathologists held its annual meeting in Bastrop on Jan. 20-22.

UhC promises 90-Day Notice

Although UHC did not announce a new start date for what it calls the ‘claims impact’ part of the BeaconLBS program, the health plan said it would notify providers in Texas 90 days before the program would affect lab test claims payment. The nation’s largest health insurer, UnitedHealthcare is implementing the decision-support system in Texas for the 500,000 members in its commercially insured health plans.

In a statement to THE DARK REPORT, UHC said the delay is due to concerns about BeaconLBS’ advance-notification process that physicians are required to use when ordering any of 79 tests listed on the UHC website. One interesting aspect in the statement UHC issued is a reference to the Beacon program in Florida and concerns about the advance-notification process. (See sidebar below.)

In addition to the issue TSP raised about the risks from data sharing, Texas pathologists expressed other concerns about the program in articles published in successive issues of THE DARK REPORT. Since those articles were published, other pathologists have reported being worried about the effect the program will have on their ability to be paid for testing and the additional time required to use the BeaconLBS system.

One of those pathologists is Susan M. Strate, MD, a pathologist in the North Texas Medical Laboratory in Wichita Falls, Texas. The speaker of the House of Delegates of the Texas Medical Association, Strate said she is concerned about many aspects of the BeaconLBS program, especially portions of the program that could affect patient care.

UHC Issues Statement on BeaconLBS Delay in Texas

IN RESPONSE TO A REQUEST from THE DARK REPORT, UnitedHealthcare issued a brief statement on its plan to delay implementation of the claims-payment portion of the BeaconLBS program.

Here is the statement in its entirety:

The Lab Benefit Management Program gives physicians real time, evidence-based guidelines, and helpful patient information right as lab tests are ordered. We’ve been closely monitoring progress of the Florida pilot and are evaluating additional refinements based on data, experience and feedback from care providers, including concerns associated with the advanced notification process.

UnitedHealthcare will continue to engage professional societies who have concerns about the program.

Network physicians continue to have access to the physician decision support tool and are encouraged to use it when ordering decision support tests. We will notify providers 90 days in advance of the new claims impact effective date.

Impact on rural areas

In addition, she expressed concern that the program might make it difficult for physicians to use the system to order lab tests, particularly physicians in small practices serving patients in rural areas.

“I have several concerns,” stated Strate. “For example, I have not personally seen data that shows the quality benefit of the system. Also, a physician cannot order certain tests if those tests are outside the balance of some of the algorithms in UHC’s laboratory benefit management program.

“There are algorithms programmed into the BeaconLBS system so that it does not allow the physician to order certain lab tests if they are outside the system’s parameters,” added Strate. “There also could be problems if the physician can’t get into the system with his or her EMR interface.

Issue of Clinical Significance

“Another issue is of clinical significance,” she observed. “There is no place to enter co-morbidities that justify the test a physician is ordering. Doctors know that treating patients is both an art and a science. Practicing medicine is not just following simple cookbook rules. Every patient is different and every patient has certain comorbidities that we need to consider.

“This BeaconLBS program is a significant concern because it puts a complete roadblock in some places where physicians will want to order the appropriate lab test for the patient,” Strate explained. “There is no good option within the program to appeal decisions in order to get a certain test performed. Even if a physician can get into the decision support system, he or she can’t appeal a decision.

“Therefore, each time a test a physician believes is appropriate is simply denied by the BeaconLBS system, that may compromise patient care,” she said. “And we do not accept programs that are detrimental to patient care.

What Is Cost-Benefit ratio?

“In addition to these valid concerns, it is also important to consider the cost-benefit ratio of any new regulatory burden that we’re adding,” Strate commented. “Patients today struggle to pay for care while deductibles and the cost of insurance both are skyrock- eting. We need to reject any additional administrative burden that costs money.”

Like the TSP, the Texas Medical Association is considering bringing the issue to the Texas Legislature, she said. “That’s one of several issues that the TMA has under review,” she said.

“We’ve heard clear and compelling evidence on how the BeaconLBS program was implemented in Florida,” she said. “And what we’ve heard about the administrative burden makes it a concern here in Texas because we have many small and rural practices.

“The majority of the practices in Texas are classified as small practices—especially those delivering primary care,” added Strate. “A new administrative process [for ordering these lab tests] could be particularly difficult for any small pratices in rural areas. Physicians already have difficulty getting the lab testing done that they need, along with getting the consultants they need. This type of system could make all of those processes more difficult. So in that way, this program could be especially devastating for them.”

Need For additional Staff

In Florida, some medical practices needed to hire additional staff to complete the process of ordering tests through the BeaconLBS system. The need to take on the added costs of additional staff to comply with the UHC program is a concern among physicians in Texas.

“I have a number of sites where I prac-tice that are distinctly rural and those physicians need systems that help them get their work done,” concluded Strate. “If they must use a decision-based support system that does not have an interface to the electronic health record systems they use, that could have a detrimental effect on the ability of those physicians to order tests and do what they need for patients.”

Texas has a bi-annual legislature that is now in session and scheduled to adjourn on May 29. Could UnitedHealthcare be delaying implementation of claims impact until the legislature concludes, so as to avoid having angry providers complain to their lawmakers?

Contact Susan M. Strate, MD. at 940-636-0427 or


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