Why a Divided Lab Industry May Soon Fall

Why a Divided Lab Industry May Soon Fall

OVER THE PAST TWO DECADES, it has often been remarked on these pages and by many others that the divided nature of the laboratory medicine profession will prove to be its ultimate Achilles heel. These divisions center around different scientific disciplines within pathology and lab medicine as well as the competing economic interests of the different sectors of the lab testing industry.

Since the passage of the Affordable Care Act in 2010, a growing host of market forces and government funding shortfalls are collectively moving the lab and pathology testing industry toward what may be a financial breaking point. The status quo for most every sector of lab testing will not stand. It is this observer’s opinion that the question is not “If?” but “When?”

For example, we are seeing the status quo disrupted in molecular and genetic testing. Payers—both government and private—have seized the introduction of new molecular test CPT codes as an opportunity to reshape this sector of lab testing to their own preferences. Most of this issue of THE DARK REPORT is devoted to original reporting of developments in payment and coverage guidelines for these 114 molecular CPT codes.

For my part, the fact that virtually all payers in the United States allowed labs to go unpaid since January 1 is a sign that they believe they have the power to dictate—despite the clear and obvious restriction of patient access to any number of life-changing molecular and genetic tests. Yes, there are many molecular assays that lack clinical utility or are overpriced. But the payers’ actions to treat all molecular assays covered by the 114 new molecular CPT codes almost equally is a signal that should not be ignored by pathologists and lab executives.

With that as background, I next offer the breaking news that the Office of the Inspector General has delivered a report to the Department of Health and Human Services that includes a finding that the Medicare program could cut what it spends on Part C clinical lab testing by $910 million per year—if it adopted the lowest price for each assay paid by any of the 50 Medicaid programs in the United States! Oh, by the way… the study includes a recommendation that patient co-pays should be evaluated for implementation.

Would this disrupt the status quo in the clinical lab sector? You bet! Now you understand why I think it is time for all sectors, scientific disciplines, and different economic interests in lab medicine to come together and speak to lawmakers with a united voice. Our profession’s future and patient care depends on it.

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