Financial Hurricane Hits Entire Lab Testing Industry

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FOR ABOUT 18 MONTHS NOW, THE ENTIRE LABORATORY TESTING INDUSTRY has been hit by an ongoing series of painful cuts to lab test fees and announcements of more restrictive coverage guidelines.

Even today, there is additional news of rock bottom prices to share with you. In this issue, you’ll read about Aetna, Inc.’s latest strategy to reduce what it spends on lab testing. Pathologists, for you, the news is a global 88305 fee of just $35.05! Clinical lab managers, your news is an 80053-Comprehensive Metabolic Panel reimbursed by Aetna at $6.54 and an 85027-Complete CBC Automated for which it will pay just $4.00. These prices take effect on July 1.

It this a smart move by Aetna? I think not. It is unlikely that routine chemistry panels and CBCs are the primary source of the year-over-year increase in what Aetna and other payers spend on lab testing. Assuming that to be true, could slashing prices for routine assays down to the level of marginal cost prove to be rapidly disruptive to physicians who rely on timely, accurate lab tests to provide patient care that delivers ever-better outcomes? Time will provide that answer.

In the meantime, lab administrators and pathologists must consider the consequences of Aetna’s latest price-cutting effort. They cannot view the Aetna pricing in isolation. That is, if labs accept the Aetna pricing, are they foolish enough to believe that UnitedHealthcare, WellPoint, CIGNA, Humana, and other payers are not going to come after them for further price concessions? It would certainly be wise for lab industry associations and professional groups to quickly band together and firmly oppose this latest attempt by a major national health insurer to cram money-losing reimbursement rates on the entire lab industry.

I don’t think it is an overstatement to say that the laboratory testing industry is currently beset by a major hurricane of lab test price cuts. At every turn, there is at least one major payer doing one of three things: 1) excluding laboratories as providers from its network; 2) issuing coverage guidelines that restrict beneficiaries’ access to certain lab tests; and, 3) arbitrarily dropping the price it pays for significant types of lab tests by substantial amounts.

It is essential that lab leaders step forward and fight the battle to maintain fair and adequate reimbursement for the laboratory tests that underpin much of the essential healthcare in this nation.

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