Here is the market price data for molecular and genetic labs from XIFIN Inc. Lâle White, Founder and CEO of XIFIN, discusses the data with THE DARK REPORT.
EDITOR: When you did this analysis of molecular and genetic testing labs, what caught your attention
WHITE: The issue for us is that Medicare made significant cuts in molecular and genetic test prices, but the private sector has not necessarily done so.
EDITOR: Anything else?
WHITE: Because these are primarily molecular labs and not routine clinical labs that may perform some genetic tests, they spend a lot of time appealing claims where reimbursement is low. Many of these genetic labs are making a big push with the private payers to get better reimbursement rules; some of them are out of network. So a good portion of payments are not contracted prices. Keep in mind that these are generally labs with specialty molecular and genetic tests. Thus, their test mix is not the type of “routine” molecular assays that some of the larger lab companies perform.
EDITOR: This study is based on price and not on volume. Is it correct to assume this is where Medicare might be spending the most money on molecular and genetic tests—lower volume, but higher prices?
WHITE: These are the top 20 molecular tests that represent the most dollars spent by Medicare for this category of tests paid to labs specializing in genetic testing.
EDITOR: What this data shows is that private payers continue to be willing to reimburse labs for molecular and genetic tests at prices that are notably higher than what Medicare pays. By contrast, Medicare has spent several years attempting to drive down what it pays for these same molecular tests.
WHITE: There is another fact about private payer pricing that we must recognize. XIFIN sees that these molecular labs are getting paid only about 25% of the dollars for which they bill, when they get paid! The balance of the time, which is 75%, they don’t get paid because they are out of network. So these unpaid claims won’t be reported to CMS under the PAMA final rule.
EDITOR: This is an interesting dichotomy.
WHITE: Yes, it is, because, for the most part, molecular labs are not being paid for the majority of their test claims. When they get paid, they get paid fairly well. Where claims are not paid, these labs will appeal and, once they do, they get better payments.
EDITOR: So they spend a lot of time trying to get payment for their claims. How does that affect their overall finances?
WHITE: When molecular labs do get paid, the payments they get are good. But this is not the majority of testing and claims they submit. However, for the larger genetic labs, the payments they receive generate enough revenue to support the entire menu of lab testing.
EDITOR: That is a crazy way to operate a laboratory that provides test results that physicians use to diagnose and treat patients.
WHITE: Unfortunately, this is the current system. This is particularly true since the molecular and genetic labs that are clients of XIFIN and generated this market price data are performing proprietary and specialty tests that physicians are using daily in patient care. Pathologists and clinical lab managers should know that these labs pay attention to compliance. We see this as our team helps them with different issues involving coding, billing, and collections. It is important to also note that some of these tests are also performed by independent clinical labs that do not specialize in molecular testing, but provide some version of these tests, either directly or through a reference lab partner. These labs have not been included in this analysis.
- This private payer price data was gathered from the lab clients of XIFIN, for payments between Jan. 1, 2016 and June 30, 2016.
- Data comes from more than 20 specialty molecular labs and tens of millions of lab test claims.
- Listed above are the top 20 molecular and genetic tests for which the Medicare program spent the most money during 2015.
- The table shows how the “private payer weighted average rate” compares to the Medicare National Limit for each test.
- The variance, in dollars, and the percentage increase or decrease over the Medicare National Limit is shown in the far right column.
- XIFIN’s calculations, based on real price data to be reported by its molecular labs, indicate that CMS would get price data for this group of molecular and genetic tests performed by labs specializing in this type of testing that would show private payers pay labs a cumulative 27.3% more than the Medicare National Limit. The degree to which some of these tests will be diluted by submissions from larger labs will determine the final impact.