Labs Can Turn the Tables on the Payers

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PRE-AUTHORIZATION OF GENETIC AND MOLECULAR TESTS is now on the radar screen of the nation’s larger health insurance companies. In most circumstances, payer pre-authorization requirements serve to exclude many smaller providers from access to patients. But local labs have a chance to guarantee their place as a preferred, in-network provider of expensive genetic tests.

As you will read on pages 10-16 of this issue, the health insurance industry has three distinct needs that can be best met by local clinical laboratories and pathology groups. First, payers want to cut through the code-stacked claims for many genetic and molecular tests to understand: 1) what specific diagnostic test was ordered by the physician; and, 2) what specific disease or medical condition triggered the test request.

Second, payers want to establish appropriate ordering guidelines and treatment protocols associated with specific molecular assays. They also want physicians to be educated about these guidelines and protocols. Again, this plays to the clinical strengths of pathologists and laboratory scientists.

Third, health insurers need an efficient and accurate system to manage pre- authorization of genetic and molecular tests, along with a way to confirm that claims meet coverage guidelines. Because labs receive lab test orders directly from physicians, they are well-positioned to assist payers in a positive way.

Pathologists and lab administrators should view this as a rare opportunity to score a trifecta (the bet based on correctly picking the first-, second-, and third-place finishers in a horse race) with payers. Local laboratories can develop the capability to help payers fulfill these three objectives.

This will directly benefit the lab because it can be rewarded by the payer in several ways. One, the lab will have preferred network access to patients. Two, it can negotiate reimbursement based on the value of the service it delivers (and not on the cheapest price bid for the molecular test). Three, because it is part of the pre-authorization process with the payer and the physician, the lab knows it is accepting a specimen for which its claim will be paid in full.

I strongly recommend that lab administrators and pathologists bring this opportunity to their executive teams and craft an appropriate business strategy. This may be a “once in a lab career” opportunity to turn the tables on payers. In return for delivering recognizable value on the use of expensive genetic tests, your lab can negotiate reimbursement based on that value.

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