In Tough Times, All Labs Need Success Strategies

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By any measure, it is tougher today for clinical laboratories and anatomic pathology groups to generate the revenue needed to deliver state-of-the-art diagnostic testing services while remaining financially viable. Four recent trends prove the point.

First, every year, the Medicare program and private health insurers are cutting the prices they pay for medical laboratory tests.

Second, most labs find it difficult to retain access to patients or gain access to new pools of patients. That is because private payers are narrowing their networks, typically to exclude regional labs, independent labs, and hospital outreach laboratories. Meanwhile, enrollment in Medicare Advantage plans is growing at double-digit rates. These plans consistently exclude local labs from their provider networks in favor of the national lab companies. As a consequence, access to the proportion of Medicare Part B patients that can be served by any lab shrinks year-after-year.

Third, government health programs and private health insurers continue to institute more restrictive coverage guidelines (or require pre-authorization and/or more documentation) for larger numbers of medical laboratory tests.

Fourth, audits of labs by the Medicare program and private payers are recognized to be more rigorous and more detailed. Labs then find themselves hit with a large number of denied claims and recoupment demands that can often total in the millions or tens of millions of dollars.

The Dark Report can track labs that have gone out of business as a result of each of these negative trends in the clinical laboratory marketplace. Much is known about how these developments are disrupting clinical labs and pathology groups across the nation. But not much is known about how some innovative medical labs are succeeding—both clinically and financially—because of the strategies they use to respond effectively to healthcare’s new dynamics.

To help you and your lab team learn about what’s working to fuel the success of these top-performing labs, the 24th annual Executive War College on Lab and Pathology Management has invited leaders from these exemplary labs to share their lessons learned. It takes place in New Orleans on April 30-May 1. Plan now to attend and learn how to keep your laboratory on the path to success.


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