Unit­edHealth­care pi­lot to con­trol lab­o­ra­tory costs draws protest

Modern Healthcare - - REGIONAL NEWS - David Royse is a free­lance writer based in Chicago. By David Royse

A Unit­edHealth­care pi­lot to con­trol ris­ing clin­i­cal lab­o­ra­tory costs in Florida has sparked an up­ris­ing among physi­cians and lab com­pa­nies who say the pro­gram is bur­den­some and un­fairly lim­its com­pe­ti­tion.

Af­ter a de­lay caused by physi­cian com­plaints, in mid-April Unit­edHealth­care started re­quir­ing doc­tors in its Florida provider net­work to give prior no­tice when order­ing one of 79 lab tests, and to use a limited group of pre-ap­proved labs for those tests. The new lab ben­e­fit-man­age­ment pro­gram is run by Bea­con Lab­o­ra­tory Ben­e­fit So­lu­tions, a sub­sidiary of Lab­o­ra­tory Cor­po­ra­tion of Amer­ica.

Doc­tors serv­ing about 430,000 pa­tients in Unit­edHealth­care’s com­mer­cial health plan in Florida now must file a pre-no­tice with the in­surer when they or­der a listed lab test, in­clud­ing Pap tests and biop­sies for prostate can­cer. Unit­edHealth­care also re­quires prior ap­proval to run the screen­ing test for mu­ta­tions in the BRCA1 and BRCA2 breast-can­cer genes. It will pay only for tests done at its pre­ferred labs.

The pro­gram is be­ing closely watched by other in­sur­ers, who say lab costs are ris­ing be­cause of over-order­ing by physi­cians. Unit­edHealth­care says overuti­liza­tion may be the re­sult of in­creased de­mand from pa­tients in­flu­enced by re­ports or mar­ket­ing cam­paigns tout­ing the benefits of ge­netic and other types of tests to avoid dis­eases.

Dr. Sam Ho, chief med­i­cal of­fi­cer at Min­netonka, Minn.-based Unit­edHealth­care, the na­tion’s largest com­mer­cial in­surer, said that lab costs for its mem­bers na­tion­wide have grown 10% a year, and that his com­pany is con­cerned about wide vari­a­tions in testing qual­ity among labs.

“The fact that you have vari­a­tion of qual­ity, the fact that you have cost in­fla­tion, means this is an area we need to pay at­ten­tion to,” Ho said.

He said Unit­edHealth­care will as­sess the Florida pi­lot’s suc­cess and de­cide within the next few months whether to ex­pand the pro­gram to other states. “We’re hope­ful we can,” Ho said.

But the Florida Med­i­cal As­so­ci­a­tion has drafted leg­is­la­tion to block in­sur­ers from im­ple­ment­ing sim­i­lar pro­grams. Doc­tors say com­ply­ing with the new pro­gram takes too much time.

“Soon we won’t be able to see pa­tients, we’ll just spend all our time doc­u­ment­ing ev­ery­thing,” said Tampa or­tho­pe­dist Dr. Michael Wa­sy­lik, chair­man of the med­i­cal as­so­ci­a­tion’s med­i­cal ser­vices com­mit­tee. “It makes me want to puke just talk­ing about it.”

Clin­i­cal lab com­pa­nies in Florida com­plain that Unit­edHealth­care’s pi­lot locks them out, ben­e­fit­ing Bea­con LBS’ par­ent com­pany, LabCorp. They say Bea­con LBS re­quires them to agree to cer­tain prices of­fered at “labs of choice.” Of the 13 “labs of choice,” five are owned by or af­fil­i­ated with LabCorp.

“They’re try­ing to force ev­ery­one to send to LabCorp,” said Joseph Ra­iano, op­er­a­tions manager for Re­liance Pathol­ogy Part­ners in Tampa.

For Unit­edHealth­care to cover lab tests, physi­cians must use Bea­con LBS’ Web-based sup­port tool, which doc­tors say is balky and doesn’t work with their elec­tronic health-record sys­tems.

“The com­puter en­try was like 22 clicks,” said Wa­sy­lik, who has spent months work­ing with Unit­edHealth­care and Bea­con LBS to im­prove the sys­tem. “I would have to sign out of my EMR pro­gram and sign in to their sys­tem. It sounds petty, but you have to un­der­stand how much doc­tors are bur­dened.”

Unit­edHealth­care said it has im­proved its com­puter in­ter­face and re­moved tests for pre­na­tal pro­files and ges­ta­tional di­a­betes from its pre-no­tice re­quire­ment tests. It has also worked to in­te­grate the Bea­con LBS sys­tem with more EHR sys­tems.

But Jeff Scott, the Florida Med­i­cal As­so­ci­a­tion’s direc­tor of legal and gov­ern­men­tal af­fairs, said there re­mains “ab­so­lute, com­plete dis­sat­is­fac­tion with this pro­gram.”

Bea­con LBS did not re­spond to re­quests for com­ment.

The Amer­i­can Col­lege of Rheuma­tol­ogy wrote to Unit­edHealth­care crit­i­ciz­ing the pi­lot, say­ing doc­tors are “the only ones aware of the nu­ances of an in­di­vid­ual pa­tient’s symptoms, dis­ease and needs,” and shouldn’t be sec­ondguessed.

But Unit­edHealth­care isn’t alone among in­sur­ers act­ing to con­trol lab-test costs. Aetna, which uses a pre­ferred net­work of lab providers, has “no­ticed growth in lab work with the ex­pan­sion of es­o­teric and molec­u­lar testing,” an Aetna com­pany spokesman said.

“We are work­ing closely with our ven­dors to en­sure they un­der­stand our clin­i­cal poli­cies and health­ben­e­fit plans to help man­age un­nec­es­sary lab testing, re­duce costs and im­prove qual­ity of care.”

Pro­ce­dures for ap­prov­ing lab tests vary among in­sur­ers, with many now re­quir­ing pre-ap­proval for some high­cost molec­u­lar testing but not for rou­tine tests.

Aetna, for ex­am­ple, only re­quires pre-ap­proval on lab tests for mu­ta­tion screen­ing in the BRCA genes.

Robert Michel, edi­tor of the Dark Re­port, a trade newsletter for the clin­i­cal lab in­dus­try, said Unit­edHealth­care’s ar­range­ment with Bea­con LBS shuts out nearly half the labs Unit­edHealth­care’s net­work doc­tors have pre­vi­ously used.

The in­surer, Michel charged, is let­ting LabCorp’s busi­ness unit de­cide in a non-trans­par­ent way which labs get to be in-net­work and how much they get paid.

“You can see why th­ese ex­cluded labs con­sider this anti-busi­ness be­hav­ior,” he said.

“The fact that you have vari­a­tion of qual­ity, the fact that you have cost in­fla­tion, means this is an area we need to pay at­ten­tion to.” Dr. Sam Ho Chief med­i­cal of­fi­cer Unit­edHealth­care

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