Early Warning on LDTs and Pre-Authorization

ANY PATHOLOGIST OR LABORATORY MANAGER who considers this to be a quiet time in the laboratory testing industry is setting themselves up for a rude awakening in the not too distant future. Several stories in this issue are written specifically to call attention to major developments in the profession of laboratory testing.

First is the subject of proposed FDA regulation of laboratory-developed tests—frequently called “home brew” tests by some of your colleagues. Plenty of media attention is given to the oft-voiced concerns of government officials that proprietary genetic tests (as exempted LDTs) offered directly to consumers via the Internet is a “Wild West” marketplace that screams for regulation. This is our lead story and is covered on pages 3-8.

However, by proposing to regulate all tests currently exempt under the LDT requirements, the FDA is poised to bring nearly every clinical laboratory and pathology group under its regulatory umbrella. That would be considered a most unwelcome outcome by the majority of the nation’s pathologists, Ph.D.s, and laboratory scientists, once they realized that such long-accepted assays as Pap smears and microbiology cultures—currently exempt as LDTs—would come under some form of FDA regulation. Thus, any proposal the FDA puts forth to change the way LDTs are currently regulated has the potential to effect major changes in how all the nation’s laboratories operate each day.

The second major development brewing in the lab testing industry is the clear intention of health insurers to actively pre-authorize expensive genetic and molecular tests. What makes this an important battleground for local laboratories is the singular fact that molecular and genetic testing represents the high-value future of laboratory medicine. These are the assays which provide physicians, payers, and patients with diagnostic and prognostic information which can initiate tens of thousands of dollars of treatments and prescription drugs—or prevent the unnecessary utilization of those same expensive clinical services.

For these reasons, every local laboratory and pathology group should be developing—in a proactive manner—a strategy to provide added value to physicians and patients about when to order genetic and molecular tests, as well as the right clinical actions to take, based on the results of these lab tests. Hockey Hall-of-Famer Wayne Gretzky attributed his success to the fact that he always skated to where the puck was going to be. Labs should plan now to position themselves to be at the place where they can deliver value at pre-authorization.