UHC Sets July 1 Launch for New Preferred Network

UnitedHealthcare gives “preferred” status to seven large lab firms while retaining 300 in-network labs

CEO SUMMARY: UnitedHealthcare will launch a new preferred laboratory network with seven lab companies on July 1. In an April 22 announcement, UHC said physicians and consumers may continue to use its existing network of more than 300 labs currently in-network. One goal is to give patients a choice of labs based on price with preferred labs offering the lowest costs. Another goal is to have clinical laboratories and anatomic pathology groups support the triple aim of improving patients’ experience and population health, while reducing cost of care.

SEEKING LOWER COSTS, SHORTER WAIT TIMES, AND IMPROVED PATIENT OUTCOMES from clinical laboratories and anatomic pathology groups, UnitedHealthcare (UHC) named seven laboratories to a new preferred lab network. In an announcement on April 22, the nation’s largest health insurer also said physicians and consumers may continue to use its network of more than 300 legacy clinical laboratory providers.

Saying it wants “more affordable procedure costs, shorter wait times, and higher quality” from its providers, UHC will ask the preferred labs to follow the triple aim of improving the patient experience of care and the health of populations and reducing the per capita cost of care.

“The preferred lab network is an advanced way for us to work with selected lab partners to deliver on UnitedHealthcare’s triple aim in the lab space,” said Linda Simmons, UHC’s Vice-President, National Lab Program.

“By following the triple aim, we aim to improve healthcare value by making healthcare more affordable, and by improving patient outcomes and satisfaction for our patients and their physicians,” commented Simmons.

In a departure from the way most health insurers contract with clinical labs and anatomic pathology groups, UHC will track patient outcomes among those members who use the preferred laboratories to understand how labs can improve patient outcomes. Doing so will take several years, Simmons said.

In its news release announcing the preferred lab network (PLN), UHC said, “The creation of the PLN is an advanced way to work with selected lab providers to deliver care that places a greater emphasis on patient outcomes and the total cost of a person’s care.”

Rigorous Quality Criteria

The seven preferred laboratories were selected based on a “rigorous quality review process,” UHC said. The seven labs that will begin serving UHC members on July 1 are:

  • AmeriPath/DermPath (a subsidiary of Quest Diagnostics),
  • BioReference Laboratories,
  • GeneDx (a subsidiary of BioReferenceLaboratories),
  • Invitae,
  • Laboratory Corporation of America,
  • Mayo Clinic Laboratories, and
  • Quest Diagnostics.

For consumers, UHC said there is no change in lab access because members can continue to use any of the more than 300 laboratories currently in its network of legacy labs. Depending on which lab a member chooses, costs may increase as follows:

  • Preferred labs (seven) are the lowest cost labs.
  • In-network (or legacy) labs (more than 300 nationwide) cost a bit more.
  • Out-of-network labs (thousandsnationwide) cost the most.

UHC explained that the cost of testing will differ for each type of laboratory a consumer would use, noting that preferred labs will have shorter wait times, online scheduling at patient service centers, higher quality of care, and lower costs.

“Services accessed through the PLN are at a lower average cost than other lab providers,” UHC said. “For example, pathology services for a biopsy in the PLN would cost about $90. Consumers could still choose a lab not in the PLN, but the cost would increase to about $150. An out-of-network lab would cost even more.”

By including all of the more than 300 of its in-network labs along with the preferred labs, UHC aims to serve all members, Simmons said. “Regarding access to testing, we’re looking for each laboratory to be able to provide services to all of our members in all lines of business with an emphasis on convenience,” she added.

Those physicians who refer patients to a preferred lab should expect to see improved service, the health insurer said. Physicians will “notice prompt turnaround times for lab results, ease-of-use when ordering lab [tests] electronically, as well as easy access to physician-to-lab medical director consultations to support patient care,” UHC added.

“[Physicians] will not need to do anything different to access services from these providers. The seven labs participating in the PLN will be designated as such in UnitedHealthcare’s provider directories,” said UHC.

UHC wants physicians to choose labs based on quality and costs. Physicians often order clinical laboratory tests based on habit or historical practice and may not realize that more affordable and higher quality options are available, UHC said.

Choosing Among Labs

In the interview, Simmons offered some detail about how UHC selected the labs for the PLN. “The preferred lab network is based on differentiated criteria for access, cost, and quality,” she said. “Also, it serves as a way for us to differentiate among the many labs in our network, including the more than 300 labs that are currently in network nationwide. We invited those laboratories to apply to be in the preferred lab network, and of those 300, we received more than 90 applications.”

Many of the in-network legacy labs are independent laboratories and several are based in hospitals and health systems, although Simmons would not say how many are in each category.

Each clinical laboratory seeking to participate in the PLN needed to complete a proprietary application that UHC prepared. “From those 90 applications, we then applied the criteria we used to select the labs for the PLN,” she said. “To be clear, those applicants that weren’t selected still remain in network. In fact, any in-network lab that didn’t apply still remains in network.

“That’s because we wanted to continue to offer our preferred lab network and our broad base of in-network labs,” she noted. “At the same time, we also wanted a way to differentiate within the network those providers that have met the higher standards UnitedHealthcare set for preferred laboratory providers.

“This is important for consumers for several reasons,” continued Simmons. “First, there is no change in lab access for our members. Everyone still has access to all of the network laboratories that we have, and we want it that way.

“Second, for our members, there should be broad access, but also, we can now highlight those lab providers that meet the additional criteria to be preferred laboratories, because using one of those labs can lead to a better experience for consumer service, online scheduling for patient service centers, and we have other higher quality service standards as well,” added Simmons, “In addition, labs in the PLN will offer lower average costs than other lab providers,” she said.

Seeking Improvements in Patient Outcomes, UnitedHealthcare Will Monitor Labs’ Data

ONE FACTOR TO WATCH CLOSELY IN THE COMING YEARS is how well UnitedHealthcare’s preferred laboratory network succeeds in tracking patient outcomes with the goal of improving them. This aspect of the network separates what UHC is doing with clinical laboratories from what most health insurers do when contracting for clinical and anatomic pathology testing.

“In the preferred laboratory network, we will be measuring back to the goals of the triple aim,” said Linda Simmons UHC’s Vice-President, National Lab Program. “This will be done by assessing how preferred labs impact service and by measuring the impact on patient outcomes.

“The information on patient outcomes will take a few years to collect in order to actually demonstrate improvements or changes in outcomes,” Simmons added.

By asking the preferred network labs to focus on the triple aim, they will be required to take a holistic approach to patient care, Simmons commented. “The laboratory is a key component in helping physicians to provide evidence-based care,” she said.

“This preferred laboratory network is less about cutting lab test utilization and more about supporting and enhancing a patient care model that includes following certain care pathways, so that physicians and consumers have the right information at the right time,” noted Simmons.

“In the preferred lab network, we will collect data to ensure compliance with the triple aim and will measure the impact on the patient outcomes,” she added. “Then, we will share that data with our external constituents, such as employers and other purchasers.”

Quarterly Reports Required

Each quarter, UHC will require the preferred labs to report performance data. “All participants in the PLN will be measured annually on their performance to ensure our doctors and patients receive great care at the lowest cost,” UHC said.

Simmons explained in general terms what data UHC wants from the PLN labs. “We will do an annual evaluation for labs in the preferred lab network,” she commented. “For that evaluation, quarterly reporting of certain measures will be required to ensure that preferred labs meet UHC’s standards.

“Laboratories in the PLN will be required to submit various pieces of information about access, quality, and service,” stated Simmons. “There are criteria in each of those areas.

“Regarding access, we’re looking for the preferred labs, and all in-network labs, to provide services to all of our members in all lines of business and to have an emphasis on convenience,” she added.

Saying its standards are proprietary, Simmons declined to elaborate on what data preferred labs would need to submit to demonstrate compliance with UHC’s standards. She did add, however, that the standards are designed “to create a more efficient user-oriented service model. In addition, we look for enhanced member protection through different standards that measure clinical, financial, and data quality.”

Performance Reports

One reason to submit the data UHC wants each quarter is to ensure that patients and physicians get what they want from the preferred labs. “For physicians, we expect the labs will focus on the quality and service standards of the triple aim,” Simmons commented. “For physicians using the preferred labs, we want them to get prompt turnaround time, ease of use when using preferred labs, and direct consultation with a lab medical director for patient care.”

In addition, UHC has standards the preferred labs will need to meet to help the health insurer to improve patient care through enhanced data sharing, she explained.

UHC is not focused so much on reducing test utilization as it is on ensuring patients get the appropriate care for their needs. “Our patient care model is actually not about just reducing lab test utilization,” she said. “It’s about ensuring that, for selected care pathways, each member gets the appropriate care at the appropriate time and for that, laboratory test results are very valuable. Lab test results drive so many of the diagnostic decisions that physicians use for patient management and to develop treatment plans.”

Although LabCorp is one of the seven preferred labs, UHC did not add LabCorp’s subsidiary, BeaconLBS, to its preferred network. When asked about BeaconLBS, Simmons said only that it remains in place serving physicians and patients in Florida.

Triple Aim Established to Drive Improvement

IN 2007, THE INSTITUTE FOR HEALTHCARE IMPROVEMENT (IHI) IN CAMBRIDGE, MASS., established the triple aim. The idea was to pursue the goals of improving the patient care experience while also improving patient outcomes and lowering healthcare costs.

To achieve these goals, the institute challenged hospitals, physicians, and other providers to develop new ways to deliver care to pursue three dimensions of care simultaneously. Those aims are:

1. Improve the patient experience of care (including quality and satisfaction),

2. Improve the health of populations,

3. Reduce the per capita cost of care.

Providers should use “a change process that includes: identification of target populations; definition of system aims and measures; development of a portfolio of project work that is sufficiently strong to move system-level results along with rapid testing, and scale up that is adapted to local needs and conditions,” the institute said.

Contact Linda Simmons at 952-979-6690 or linda_m_simmons@uhc.com.

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