Community Labs Arrive at a Crossroads

TODAY, COMMUNITY LABORATORIES ARE FACING THEIR TOUGHEST TIMES EVER. My definition of a community lab includes independent clinical lab companies, hospital lab outreach programs, and pathology groups serving community hospitals.

Never before have community laboratories had to deal with so many discrete market trends and financial setbacks as have surfaced in the past 36 months. I am concerned about the ability of community laboratories to survive and maintain their independence and their ability to be an essential and valuable local resource to the physicians and patients that they serve in cities and towns throughout the nation. Multiple market trends are hammering community laboratories today.

For example, it is more difficult for community labs to retain access to patients. In recent years, health insurers have deliberately begun to narrow their lab provider networks specifically to exclude community laboratories, while favoring national lab companies. Changes to the Blue Card program and Aetna’s wholesale purge of community labs from its provider networks are two painful examples of this trend.

It is also more difficult for community labs to get payment from private payers for their lab testing services. THE DARK REPORT is hearing regularly from local labs about how different health insurers are ignoring claims, arbitrarily paying claims in a manner different than called for by the patient’s health insurance plan, and using similar techniques to avoid issuing payment as specified by state law, by provider contract, and by the individual health insurance plan requirements.

These are powerful trends initiated by the private health insurers. Meanwhile, the Medicare and Medicaid programs have implemented regular cuts to lab test prices, accompanied by more restrictive coverage guidelines. The price reductions made to certain anatomic pathology technical and professional services have been particularly painful to independent pathology group practices.

Add to these market trends the threat posed by the clinical integration that is taking place in the form of ACOs and medical homes. This is why I believe that community labs have arrived at a critical crossroads. Without the right education and lobbying campaigns directed at lawmakers, physicians, and patients, the lab testing industry may be on a path that ends up as a national duopoly.