New Lab Revenue Source: COVID-19 Worker Screening

CLINICAL LABORATORIES have a new revenue-generating opportunity, as some states relax stay-at-home rules: Many employers are likely to seek COVID-19 screening tests for employees returning to work to detect the presence of the new coronavirus.

This new source of lab specimens and revenue gives clinical labs an opportunity to replace some revenue lost since early March. That is when routine daily specimen volume began to fall by as much as 60% for most labs. (See TDR, April 20, 2020.)

Doing COVID-19 testing for employers is new work. It is totally different from the routine clinical testing ordered by physicians. But with routine specimens and revenue down by more than half, a growing number of clinical laboratories recognize that this new source of test referrals could at least partially help offset lost revenue and help the lab maintain financial solvency during the pandemic.

However, the opportunity to replace lost routine test volume with COVID-19 screening tests for employers brings some legal risks that need to be considered andplanned for by labs performing such tests, according to Richard S. Cooper, a partner with the national firm of McDonald Hopkins.

“In recent weeks, we’ve been asked by a growing number of clinical labs about the legal issues associated with performing COVID-19 testing for employers who want to screen their employees for this disease,” explained Cooper. “There are important steps a lab should take to mitigate the risks it might incur as a result of testing for COVID-19 on behalf of an employer.

“When an employer requests a lab to test its employees, there are additional risks that must be addressed, compared to standard COVID-19 testing,” he noted. “Both the lab and the employer establishing testing for employees returning to work need to understand and address these risks.

“Employee screening will become very prevalent and will continue to be a part of COVID-19 testing because many employers are requiring these tests as a screening process before workers are allowed back into the workplace,” said Cooper. “Employers need to limit the possibility that infected employees can infect the on-site workforce. Employers also have certain legal obligations to ensure a safe workplace.”

Mitigation of Legal Liability

As clinical labs work with employers to implement such testing, they should be aware of the legal liability mitigation in two areas. “First, labs need to have contracts with employers that appropriately limit risk,” he advised. “Second, employers and labs need to make employees aware of the purposes and limitations of such testing, and those employees need to sign testing consents.

“For example, no tests are perfect, and so a clinical lab needs to disclose that information to the employee being tested,” he added. “Remember, any test can produce a false positive or false negative and COVID-19 screening test result shows the employee’s status for that moment. That’s why it’s important to qualify what the test does. In other words, the lab gives a result at a specific point in time. That result may not be valid the next day and the employee needs to know that.

“Every lab should take several steps as it begins working with an employer establishing a COVID-19 testing program for its employees,” stated Cooper. “First, the lab needs to make it clear to the employer and to the employer’s workers that the COVID-19 testing is for screening purposes only to determine if the employee can return to work,” he noted. “The lab is not providing a diagnostic test to the employee.

Not a Patient Relationship

“Second, the lab needs to make it clear that it is not establishing a patient relationship with the employees being tested,” he continued. “The fact that these two disclosures are made—hopefully in both the contract with the employer and in the disclosure consent forms that employees sign—would be important in terms of defending a claim of professional liability,” said Cooper.

“Third, your lab wants to inform the patient that the laboratory will provide results to both the patient and to the employer,” Cooper warned. “This is not true in a in a normal clinical testing situation where a lab reports test results to the patient’s physician, but not to the patient’s employer. In fact, in a diagnostic setting, under the Health Insurance Portability and Accountability Act (HIPAA), reporting a test result to anyone but a patient and the patient’s physician would likely violate HIPAA.

“But, because this COVID-19 test is for screening purposes, the results obviously need to go to the employer,” he continued. “Therefore, in this situation, the lab needs to also disclose the test results to the patient. That’s because the results will be used for the purpose of determining whether the employee can return to work, meaning the test result will affect that worker’s ability to re-enter the workplace. That’s why your lab needs to disclose this information to the patient.”

When a lab wants to ensure that it’s protected in such a situation, there are several issues to consider. “Typically, when a lab does a COVID-19 screening test for an employer, it’s best to have a contract with that employer,” Cooper said. “The contract would explain clearly what the lab will do and what the lab’s responsibilities are versus the employer’s responsibilities. Outlining each party’s responsibilities is a top prioritywhen drafting a contract with an employer.

“In the contract, the lab might want to add that the employer will distribute a patient consent form to employees who get tested,” Cooper commented. “That consent form is designed to cover any of the exposures that the lab and the employer could face.

“In that form,” he continue, “the lab would explain that it is doing this screening testing on behalf of the employer. It would also be wise to require employees to complete a health status questionnaire the day of the testing. If the employee indicates that he or she has any COVID-19 symptoms, he or she should not report for testing.

Consent Forms

“Also, the contract will need to have some language that clearly states that the employer will obtain the requisite consent forms from each employee,” Cooper explained. “That means the lab can prepare those forms, but the lab could have the employer be responsible for getting the signature of each employee.

“Another element labs should include in the contract is a clear statement that the employer is responsible for complying with all state and federal employment laws regarding screening tests, including requirements from the federal Equal Employment Opportunity Commission (EEOC),” he said. “Those requirements address employee health and safety, and so may relate to employee testing.”

Contact Richard Cooper at 216-348-5400 or



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