LabOne, Humana, Pathology Reference Services of Maryland

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LABONE AND HUMANA INK NATIONAL CONTRACT FOR LAB SERVICES

IN A MOVE THAT REINFORCES its intention to compete as a national laboratory, LabOne, Inc., signed an expanded national agreement with Humana Inc.

The contract, announced on August 31, 2004, covers LabOne’s full test services menu and allows LabOne to provide services to the physicians and beneficiaries of Humana’s Midwest Region. The agreement also makes LabOne a provider for all Humana product lines.

Also in August, LabOne reported its second quarter financial performance. Its revenues jumped 40% over the same quarter in 2003, from $83.9 million to $117.5 million. Operating earnings increased by 32%, from $8.5 million to $11.2 million.

The biggest factor in this gain was LabOne’s acquisition of Health Alliance Laboratories in Cincinnati, which took place earlier this year. Accessions increased 28% during second quarter. But if the impact of the Health Alliance and Northwest Toxicology acquisitions are factored out, accessions increased by 8.7% from second quarter 2003 to second quarter 2004.

2ND MARYLAND LAB CLOSES, 3,000 PATIENTS TO BE RETESTED FOR STDs

ONCE AGAIN, A WHISTLEBLOWER in a troubled laboratory in Maryland alerted public health officials and triggered serious enforcement action.

In late August, the Maryland Department of Health and Mental Hygiene (DHMH) ordered that Reference Pathology Services of Maryland (RPSM) be closed by September 5 due to operational failures that produced unreliable results for tests of chlamydia, gonorrhea, and HPV.

Public health officials have offered retesting to as many as 3,000 patients. RPSM’s violations are believed to have started in October 2002 and continued through at least April 2004. It was a whistleblower who alerted health officials to problems within the lab.

Prior to its closure on September 5, RPSM’s Medical Director was Jesus U. Socrates, M.D., who also works as a pathologist at Hanover Hospital in Hanover, Pennsylvania. RPSM’s Laboratory Director was Timothy P. Frank, CT/MT ASCP and the Supervisor of DNA/HPV Testing was Debbie Adams, MT/ASCP.

Because Reference Pathology Services of Maryland was accredited by the College of American Pathologists (CAP), government health officials and at least one congressman are questioning the effectiveness of its lab accrediting process. “The accreditations process is flawed and we need to fix it,” said Nelson Sabatini, who was the Maryland Health Secretary at the time RPSM was closed. “As public policy makers, we need to resolve to sit down and find an effective way to fix it. It can be done. During the nursing home scandals of the 1970s, we put in place a new oversight process that cleaned things up.”

Lab accreditation is under scrutiny because similar problems went undetected at the lab of Maryland General Hospital in Baltimore. Unreliable HIV and HCV test results were reported on at least 2,100 patients over a 14-month period. As in the RPSM lab case, it was a whistleblower who alerted government officials to this lab’s problems.

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