If 2019 Is a Tough Year, Blame Government, Payers

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Traditionally, the new year is a time of optimism. People make resolutions such as exercising more and losing weight. Companies get to start the year with a fresh budget and the new opportunity to achieve their goals.

Unfortunately, events of the last 90 days of this year are not auspicious for clinical laboratories and anatomic pathology groups during 2019. Let me list just four significant events, each with the potential to have major consequences:

  • On Sept. 12, in the whistleblower case of the United States of America ex rel. Chris Riedel vs. Boston Heart Diagnostics Corporation, the federal judge ruled that the practices of labs waiving patient copays and deductibles and paying referring physicians for packaging and handling of patients’ specimens are issues that could go forward in this lawsuit. This ruling thus became something that labs and their legal counsels need to consider when assessing their compliance with the federal Anti-Kickback Statute. (See TDRs, Oct. 1 and Oct. 22, 2018.)
  • In November, the federal Centers for Medicare and Medicaid Services released the 2019 Medicare Part B Clinical Laboratory Fee Schedule with more fee cuts, along with the amended rule requiring hospital labs using the CMS-1450 14x claims form to report their private payer lab test price data in the next reporting cycle. (See TDR, Nov. 13, 2018.)
  • Following the October 24 enactment of the federal Support for Patients and Communities Act into law, lab industry attorneys have been discovering language in the statute that would make several common lab business practices illegal for both government and private health plans, such as paying commissions to sales reps, putting phlebotomists into physicians’ offices, and providing lab supplies to referring physicians.
  • Late last week, we learned that UnitedHealthcare was terminating an unknown number of labs as providers. Most of these labs had been in-network for a decade or more. This may be the early sign of a new managed contracting trend that does not favor hospital lab outreach programs and regional laboratories.

These examples above are why, if 2019 turns out to be a tough year for the clinical laboratory industry, much of the blame can be placed on the federal government and major health insurers.


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