Texas Lawmakers Asked to Stop UHC and BeaconLBS

Doctors in 20 medical societies say it limits their choice of labs, has negative effect on care

CEO SUMMARY: In a letter to the Texas Legislature, 20 Texas medical societies say UnitedHealthcare’s BeaconLBS program would be detrimental to patient care. The Texas Medical Association and the Texas Society of Pathologists said they were concerned that the program increases the administrative burden on referring physicians, takes away a physicians’ right to choose a pathologist or lab, and sets up a network-within-a-network of labs to steer ordering physicians based solely on what labs charge.

IN A LETTER TO MEMBERS OF THE TEXAS SENATE AND HOUSE, physician leaders of 20 medical specialties asked the legislature to stop the implementation of the laboratory benefit management program that UnitedHealthcare is introducing in Texas and which will be managed by Beacon Laboratory Benefit Solutions.

The letter from the presidents of the Texas Medical Association (TMA), the Texas Society of Pathologists (TSP), and 18 other specialty societies, asked the legislature to, “prevent or delay implementation of this inappropriate program,” saying it would, “add new incremental costs to every patient treated by Texas physicians.” The physicians also said their ability to choose clinical laboratory providers for their patients was being infringed.

UHC wants physicians serving the 500,000 members of its commercial HMOs in Texas to use the BeaconLBS program when ordering any of 79 clinical lab tests. Texas physicians familiar with BeaconLBS have complained that the system steers them to certain preferred labs and away from the labs they normally use. BeaconLBS is a subsidiary of Laboratory Corporation of America. (See TDRs, Oct. 17, 2016 and Jan. 30, 2017.)

The TMA and TSP are leading the effort to get physicians in other specialties to oppose the BeaconLBS system. TMA and TSP said physicians’ opposition to the program led UHC to announce at the start of this year that it would postpone the claims impact of the program. Last year, UHC said that the claims-impact part of the program would start March 1.

Implementation Delay

In January, UHC delayed the start of claims impact, saying it had been monitoring progress of the BeaconLBS program in Florida and considering making changes based on feedback from physicians concerned about the advance-notification process. However, the timing of this delay coincided with the opening of the Texas legislature, which only meets every two years and is scheduled to adjourn on May 29.

Some observers believe that UnitedHealth suspended the March 1 start of claims impact so that any physicians upset about the burden of using the BeaconLBS system to order lab tests would not be complaining to lawmakers while the Texas legislature is in session.

Last year, UHC introduced the BeaconLBS program in Florida despite opposition from the Florida Society of Pathologists and other physicians in a variety of specialties. UHC launched the program in Texas on Jan. 1.

UHC Sets No New Date

Although it set no new date to implement the claims-impact phase of the program, UHC said physicians could continue to use the BeaconLBS system to order tests and that it would notify them 90 days in advance of the new date for the claims-impact phase. UHC has said the program is designed to improve the quality of outpatient lab testing, support evidence-based care, and lower costs.

In a statement to its members about the delay, the Texas Medical Association said, “Strong opposition from organized medicine pushed UHC to put on hold an expansion of its laboratory benefit management program, which would have been extended to fully-insured commercial plan patients in Texas effective March 1. TMA and the Texas Society of Pathologists (TSP) received confirmation of UHC’s decision in January after meeting with UHC in December.”

Serious Reservations

TMA, TSP, and the 18 medical specialty societies have serious reservations about the program, TMA said. In the letter dated Feb. 6, TSP President Tim Allen, MD, JD, and the presidents of the other medical societies, wrote, “When the program first rolled out as a pilot in Florida, Texas was also going to be a pilot state. TMA fought to get Texas removed from that original pilot program and discussed the issue regularly in meetings with UHC officials. TMA staff will continue to discuss the association’s concerns about the impact of the program on ordering physicians and pathologists and will work with TSP and the other specialty societies to make UHC aware of the concerns.

“TMA agrees with TSP physician members’ concerns about UHC’s program. They worry it:

  • Creates a new administrative burden for the referring physician;
  • Takes away physicians’ right to choose a consultant (pathologist or laboratory);
  • Creates ‘network within network,’ steerage based solely on payment;
  • May deny payments to contracted physicians who present a ‘clean claim’ for reasons outside their control; and,
  • Starts medicine down a slippery slope: If they can do this to one specialty, they can do this to all specialties.”

Florida Labs Go Unpaid

In November, Kevin Homer, MD, a pathologist with Huguley Pathology Consultants in Fort Worth and TSP’s immediate past president, said he heard that referring physicians in Florida were not using the BeaconLBS program and that laboratories were not being paid for testing performed on UHC patients in those cases.

In a letter about BeaconLBS to TSP members, Homer said, “UHC has not provided detailed data regarding Beacon’s success in achieving its quality, utilization, or physician experience goals.

“Cost alone should never drive health care choices independently of quality,” Homer added. “While UHC claims the Beacon program is beneficial, TSP believes it ignores the negative consequences that BeaconLBS will have on patients, doctors, and quality of care. We believe that the fundamental right of a physician to choose the most appropriate laboratory for his or her patients results in better outcomes for patient care, test quality, and total cost of care.”

Contact Kevin Homer, MD, at khomer@hpath.net or 817-293-4304.

Letter Says UHC Program Leads to Denial of Critically Important Clinical Laboratory Tests

IN A LETTER TO THE TEXAS LEGISLATURE, 20 physician leaders of specialty societies in Texas say UnitedHealthcare’s Beacon laboratory benefit solutions program will lead to the denial of critically important laboratory tests in Texas.

“…the program will negatively impact Texans, including denial of critically important tests and limitation of physician options that effect patient health and safety,” the letter said. Here are sections of that letter:

“As physicians, we too take seriously the obligation to protect patients and their well-being, particularly when we face limitations in our ability to practice on a patient’s behalf. Among many other deci- sions physicians should be allowed to make in consult with patients is laboratory choice. Physicians should have the discretion to determine the best lab for patients, and cost alone should never drive that choice independently from quality. I am writing to make you aware of a new initiative that threatens these principles in Texas.

“Beacon is an electronic tool that notifies UHC when certain common lab tests are ordered and then steers those tests to a subset of in-network labs (‘Labs of Choice’) that accept fees in the lowest quartile. Since Beacon was piloted in Florida two years ago, the impact to physician practices has been disastrous. Many medical organizations have voiced opposition to the program, including the Florida Medical Association, the Florida Society of Rheumatology, the American Congress of Obstetricians and Gynecologists District XII (Florida), the Florida Academy of Family Physicians, and the Florida Society of Pathologists.

“The Florida experience highlights ways this program will negatively impact Texans, including denial of critically important tests and limitation of physician options that effect patient health and safety.

Although UHC claims that Beacon will reduce healthcare costs, the program will add new, incremental costs to every patient treated by Texas physicians. In Florida, many physician offices have been forced to add staff to handle the increased administrative burden caused by the program. Beacon’s design shifts both new and existing costs from the insurance company to Texas physicians, even providing a structural justification to deny payment for services in an attempt to circumvent the Texas ‘Prompt Pay of Clean Claims’ law.

Physicians’ Right to Choose

“UHC claims Beacon is a quality initiative, but it will not improve quality. Instead, it will actually result in reduction of UHC’s expenses and steerage to the lowest cost provider within its network. When it goes into effect, [UHC and] Beacon will limit every physician’s right to choose the in-network pathologist and laboratory they want for their patients. Choosing the most appropriate laboratory for his or her patients results in better outcomes for patient care, test quality, and total cost of care. Interference in this choice is akin to interference in the practice of medicine. This power should never be given to an insurance company.

“The notion that an insurance company can create a network within a network, steering referrals within a network of contracted providers based on the reimbursement accepted by that provider, should alarm everyone, including you in your role as policymaker. Beacon threatens physicians’ fundamental right of choice in their practices, unlinking cost from quality and interfering with patient care. You must stop implementation of Beacon in Texas.”

In conclusion, the letter urged Texas legislators, “…to prevent or delay implementation of this inappropriate program.”


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