In Texas, Questions for UnitedHealth, BeaconLBS

Pathologists ask: How does this improve quality? How will we get reimbursed for IHC test claims?

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CEO SUMMARY: As of January 1, 2017, clinical laboratories and pathology groups in Texas will find it more difficult to serve the 500,000 patients enrolled in UnitedHealthcare’s fully-insured commercial plans in the Lone Star State. That’s because—just as it did in Florida—UnitedHealthcare, with its partners BeaconLBS and Laboratory Corporation of America, is implementing its laboratory benefits management program in Texas as of that date, with claims impact to begin on March 1.

AS OF JAN. 1, 2017, UnitedHealthcare wants physicians and labs in Texas to begin using its laboratory benefits management program that is administered by BeaconLBS, a business division of Laboratory Corporation of America.

Under the program, physicians treating any of the 500,000 UHC members who are in fully-insured commercial plans through their employers will need to obtain pre-notification or pre-authorization for about 80 clinical lab tests through the BeaconLBS platform. During January and February, use of the BeaconLBS system for lab-test ordering will have no effect on whether UHC will pay the labs that run these tests. Starting, March 1, however, each time physicians do not use the BeaconLBS platform when ordering these most-common tests, UHC will not pay the labs that performed those tests.

Throughout Texas, pathologists are beginning to learn more about this new UnitedHealthcare requirement. They are raising many questions about how the BeaconLBS program will work and what effect it will have on clinical laboratories and referring clinicians.

The first question THE DARK REPORT hears from pathologists in Texas is: “What is UnitedHealthcare’s aim in adopting this program?” That question is generally followed by: “How will pathologists get paid for immunohistochemistry tests when referring physicians don’t order IHC?”

What’s the Goal?

Most pathologists in Texas remain unaware of the full details of UHC’s laboratory benefit management program. But those pathologists who followed its use in Florida are concerned about how its implementation in Texas will disrupt long-standing physician and patient relationships, not to mention the negative financial impact their colleagues in Florida have reported.

“Did UHC set up this program to save money or shift costs to pathologists?” asked a pathologist from a large group in the Houston metro. “UnitedHealthcare has 80 tests that must go through the BeaconLBS decision-support system.

“It sure looks to me like the way they developed this list of 80 tests is by taking the top 80 payouts by CPT code,” he said.

“By that I mean UnitedHealthcare set up this program to save money on the most common tests. It seems to me the only reason they are doing this is because saving money is their ultimate goal. If UHC wants to improve quality, it won’t achieve that by selecting the top 80 tests by payout by CPT code.

Cost Shifting to Labs?

“These are high-volume tests,” he added. “That’s what makes me think UHC’s laboratory benefit management program is about shifting costs to labs and physicians. UHC simply asked, ‘What are the top CPT codes that we pay out?’ Once they identified those top tests by volume, that became their list.”

Another pathologist from San Antonio who agreed to speak off the record to THE DARK REPORT raised an important question: How does UHC and BeaconLBS intend to handle IHC claims from pathology labs? “Included on the list is Immunohistochemistry, which is CPT code 88342,” she stated. “But pathologists order this test when working up a biopsy case. A referring clinician never orders immunohistochemistry. If the clinician doesn’t order the test, and pathologists are not allowed to do the pre-notification through the BeaconLBS system, then how does the pre-notification get done?

“I understand that, at one of the meetings conducted by UHC, labs were told that they cannot do the pre-notification and so all we can conclude is that we’ll never get paid for immunohistochemistry,” she noted. “That’s a question we want the Texas Society of Pathologists (TSP) to get answered the next time it meets with officials from BeaconLBS and UHC.”

THE DARK REPORT has learned that, in November, some members of TSP had a 30-minute conference call with representatives of BeaconLBS, UnitedHealthcare, and LabCorp. The call included a demonstration of the BeaconLBS system. At least two pathologists who monitored the call agreed they appreciated the opportunity to learn about the system. But the three companies’ representatives presented too much information in a short time.

“It was like drinking from a firehose,” noted one pathologist who listened to the conference call. “We didn’t have time to formulate questions or even to digest what we heard.

“From what little we could tell from the demonstration, the BeaconLBS system does not look ready to be rolled out,” he commented. “On January 1, use of the BeaconLBS system will be voluntary for the first two months. Then, on March 1, it will be mandatory. But it looks like the implementation will be rushed.

“In addition, there’s not enough time for pathologists or referring clinicians to test the system so that we’ll be ready on March 1,” he said. “And, if it’s a sloppy rollout, that tells you that they are not interested in quality of care.

“For example, the BeaconLBS people said they have interfaces in place with seven electronic health record systems,” continued this pathologist. “And, they admitted that a doctor who does not use one of those seven EHR products will have to use the freestanding BeaconLBS portal.

Time-Consuming For Docs

“Using the BeaconLBS portal is a huge problem because the system is ponderous and time-consuming for a physician to use to obtain pre-notification or pre-authorization when ordering lab tests,” he explained. “When it doesn’t integrate, the referring clinician has to use two systems to order each test, his or her own EHR and the BeaconLBS portal.

“Plus, the BeaconLBS system has been running in Florida for more than a year, which raises the question of why is it that UHC and BeaconLBS have interfaces with only seven EMRs? That’s a very small number,” he added. “What are they waiting for? They should just integrate with all of the most common EHRs rather than make it difficult for most physicians to use the system.

“The Beacon representative responsible for EHR integration was on the conference call and said, ‘We’re committed to integrating with all of the most widely used EHRs. You pathologists just have to let us know which ones your clients use and which ones you want and we’ll connect those EHRs for you,’” noted the pathologist.

“To me, this is balderdash! I don’t see that as our job! UHC should know enough about its market and its contracted physicians to know which EHRs Texas clinicians use,” emphasized the pathologist.

attempt To Cut Costs

“From all that I’ve learned so far, it’s clear what they’re trying to do,” he said. “The design of this program tells me that they are not trying to increase quality, and they are not trying to lower the cost of care. They’re trying to cut their expenses and steer referrals to the lowest-cost lab within their provider network.”

The Houston pathologist agreed with this assessment. “My pathology laboratory meets every one of their quality mandates to be a lab of choice, but if—according to my existing UHC contract—if my lab’s fees are not in the bottom quartile, our lab is excluded,” she explained. “This pricing requirement is an independent criteria that they added on. It’s a made-up thing.

“In other words, I can make a strong argument that UnitedHealthcare and BeaconLBS created a new, systematic way to deny payments to labs,” she continued. “They know that the law requires a laboratory to perform the tests ordered by a physician. So the lab will perform the tests and the physician and patient come out okay, but the laboratory that performed the tests does not get paid by UHC and BeaconLBS because of these other restrictions!”

Texas ‘Clean Claims’ Law Might Be Problem for UHC

ONE TEXAS PATHOLOGIST who works with the Texas legislature on laws and regulations that affect clinical laboratories and anatomic pathology groups raised an interesting question: “What effect will the clean claim law in Texas have on how UnitedHealthcare and BeaconLBS handle claims from clinical labs and pathology groups?

“I could meet every one of their quality mandates to be a lab of choice, but if under my existing UHC contract, my fees are not in the bottom quartile, I’m out!,” he said. “That’s an independent criteria that they added on. It’s a made-up thing.

“In other words, they gave themselves a new and systematic way to deny payments, but here in Texas they might have a problem,” explained this pathologist. “Texas’ clean claim law says that, within a certain period of time, insurance companies have to pay a clean claim—meaning one that has every CMS-required element completed correctly.

“There is no mention in the clean claim law about the authorization or notification number that referring clinicians have to get through the BeaconLBS system,” he added. “Nowhere is that part of the definition of a ‘clean claim’ under Texas law.

The pathologists’ society has raised the clean-claim issue with lawyers from the Texas Medical Association. A spokesman for the TMA said the association is working with representatives from BeaconLBS.

Meanwhile, THE DARK REPORT made an inquiry about the clean claims law to the Texas Department of Insurance. A public information officer wrote the following, “If it’s [a] fully-insured [health plan], we would regulate it even if it is employer-sponsored. Clean claims laws would generally apply. We would need to know more about the program to comment further.”


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