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Looking Back at Executive War College 2024: Four Key Takeaways Every Lab Should Know
May 13, 2024
The energy at last week’s 29th Annual Executive War College in New Orleans was vibrant and generally upbeat, with attendees adopting a roll-up-the-sleeves, “let’s get it done” attitude as they discussed how best to overcome numerous headwinds to advance diagnostics to new levels of clinical relevance. With a record number in attendance, the conference revealed an industry that appears to be clear-eyed about the challenges confronting it and eager to do the work to ensure continued success.
The hottest topic last week was undoubtedly the Food & Drug Administration (FDA) announcement of its final rule regulating lab-developed tests (LDTs), though there was plenty of discussion about AI and the rising tide of prior authorizations, market access, legal considerations, and Z-codes. In all, the conference painted a picture of a fast-moving healthcare landscape that has plenty of landmines and also areas of tremendous opportunity. Below are my four key takeaways from the event.
1. Innovation Is Under Attack.
The consensus is everyone believes that innovation is the key to continued success. However, the numerous market headwinds and continued increase in diagnostic cost structure will slow down innovation potential even without the more recent FDA ruling. Despite the grandfathering of many existing LDTs and avenue via the NY process, it is our position that the FDA’s final rule regulating LDTs will set diagnostics innovation back. Diagnostics comprise a $10B+ market driven by growth in demand for in vitro diagnostic (IVD) tests toward diagnostics-driven personalized medicine. However, the FDA regulation is poised to significantly slow progress in this area as labs try to navigate the FDA’s insistence on categorizing diagnostics as medical devices and adding significant costly and time-consuming regulatory requirements in the process.
As our CEO, Lâle White, explained during the FDA panel session, “When we talk about innovation, we have to understand the cost associated with innovation and the cost associated with reimbursement after years spent getting a test approved. While we want safety, guidance, and FDA approval, we must understand the cost structure we’re introducing in a scenario where margins are already quite lean. We are probably the last nation left that has the level of innovation that we have, but that can be lost pretty easily if we’re not thoughtful about how these things need to be rolled out.”
2. If You’re Not Looking Beyond Clinical Use Cases for AI, You’re Sure To Be Left Behind.
With more than 15 sessions and panel discussions covering the topic, AI was definitely in the spotlight. AI-based clinical decision support has become a core initiative at many hospitals and health systems nationwide, and digital pathology is heading toward mainstream adoption for routine diagnostics.
However, labs and pathology practices must look beyond clinical use cases to help offset staff shortages and improve business and administrative functions such as inefficient billing and reimbursement processes. We are in an age of needing to do more with less and faster. AI is a potent tool for achieving real improvements. In the session I co-presented with XiFin resident AI expert Jeff Carmichael, we discussed how XiFin is using embedded-AI to re-shape revenue cycle management in five practical ways—from capturing insurance information to managing negotiated rates and expect pricing to prioritizing exception processing to improve the likelihood of claim reimbursement. We believe labs can ill-afford to stand idly by while their peers reap the rewards of expanding their use of AI in operational and financial workflows.
3. Take a Tip from Big Pharma: Scale-Up Your Market Access Initiatives.
It was great to see and hear about the growing interest in market access for diagnostic providers, though there seemed to be confusion about the importance of this function or how best to go after it. While pharma manufacturers have long-utilized formalized market access strategies to help clinicians understand the value of a drug, establish the price, and negotiate with payors to ensure they’ll cover the cost of it (thereby ensuring access to patients), diagnostic labs have been slow to embrace the practice. Many labs don’t actually have this role in their organizations.
XiFin’s Heather Agostinelli, VP and head of specialty RCM, and Clarissa Blattner, senior director of revenue and payor optimization, were joined by Debbie Windsor, market access expert, in a practical session focused on three pillars of successful market access for diagnostics:
- Network Access: Does the test/procedure add value to members? Is there value for in-network coverage?
- Medical Policy: Does the test/procedure meet clinical utility?
- Reimbursement Requirements: Is the claim coded correctly, and does it meet payor requirements?
Understanding the in-network contracted rates for major payors and plans by diagnostic billing code can help labs better know how they benchmark against the industry and better negotiate favorable reimbursement. Then, uncovering payor behavior through AI-driven insights in the revenue cycle can provide a solid foundation for market access leaders.
4. Be Ready to Navigate Legal and Regulatory Land Mines Ahead.
FDA regulation of LDTs. Proliferation of Z-Code requirements by commercial payors. Medicare vs. Medicare Advantage vs. Medicaid reimbursement. SALSA, PAMA, and VALID. These potential land mines require thoughtful strategies to navigate successfully in the coming year. As in industry, we must come together to shape what success can look like.
Much has been made of payors’ use of AI in prior authorizations (PAs), which is creating significant administrative and clinical burdens for providers. We’ve witnessed class-action lawsuits targeting payors’ misuse of AI in PAs by wrongfully denying medically necessary care. Throw in an aging population and the scarcity of qualified diagnostics professionals, and it’s clear we’re heading into what Robert Michel, editor-in-chief of Dark Daily, labeled as “the perfect storm” of challenges. Arming ourselves with data illuminating how these insidious practices affect the availability of and patient access to diagnostics will be critical in the coming months.
In fact, in her keynote presentation, Lâle White outlined how labs can use data and come together to take action in this embattled environment:
- Labs and Diagnostics must unite.
- Support the VALID Act and push to leverage the existing CLIA structure.
- Get evidence on the impact of FDA regulation of LDTs.
- Actively engage in our trade associations.
- Promote the role of the lab in connecting data and utilizing technology to improve healthcare.
- Inject your expertise and advocate for our industry.