Will 2016 Bring Opportunity or Tribulations for Labs?

WE ARE JUST ABOUT EIGHT WEEKS FROM THE ADVENT OF 2016. Given the rapid transformation of healthcare that continues to unfold, it is timely to assess how clinical labs and pathology groups are likely to fare during the coming year.

On the plus side, the ongoing evolution toward integration of clinical care will benefit hospital-based laboratories. The number of ACOs continues to increase and these are usually anchored by a hospital or health system. Because of that fact, the hospital’s lab is positioned to be the preferred provider of inpatient, outpatient, and outreach lab testing. This is particularly true when the managed care contracting team at the hospital or ACO negotiates contracts that include outreach lab testing services.

Another positive opportunity is the steady progress toward population management, informed by big data. Because clinical labs originate the largest proportion of useful clinical data, they have an opportunity to combine lab test data with other clinical data sets in ways that physicians can use to improve patient outcomes while reducing the overall cost of care.

The challenges facing labs in 2016 are well-known. During the year, the Medicare program will collect market price data and use that to set Medicare Part B clinical laboratory fees for 2017. Another emerging issue is whether CMS will follow the intent of the Protecting Access to Medicare Act (PAMA). Following release of the proposed rule to implement market reporting and proposed fees for advanced diagnostic laboratory tests (ADLTs) this fall, the entire lab industry has concerns that CMS is poised to enact significant fee cuts that will be painful to all labs. We report on one specialty lab company that says it will have to close if the proposed pricing for its ADLT assay is not increased. (See related article here.)

Similarly, expect private payers insurers to be tougher on lab test coverage and pricing. As well, THE DARK REPORT has been first to alert lab administrators and pathologists to new targets in payer audits of labs, including whether labs are collecting amounts due from patients. Expect tougher payer audits during 2016.

For those lab executives tracking events at Theranos, 2016 may prove to be a challenging year for the lab company that says its diagnostic technology will disrupt the clinical laboratory testing industry. Stories published this month by The Wall Street Journal have put the high-profile start-up in an unwelcome spotlight. You’ll be fascinated by our coverage, found here and here.