Last weekend’s NILA conference covered a number of items currently impacting laboratories across the country. Several topics, in particular, saw repeated discussions and, in some cases, vigorous debate from the audience. Here are the hottest topics and key takeaways from the NILA meeting:
Prior Authorization’s Pinch
This was potentially one of the most intriguing discussions revolved around prior authorizations and how labs can fight back against them. As we begin to see payors increase requirements for prior authorizations, clinical laboratories and pathology groups are further challenged in how to retroactively obtain an authorization number that more than 40% of the time the referring physician failed to acquire. When an effective prior authorization process isn’t integrated into the laboratory’s RCM workflow, the increase in authorization denials and the subsequent need to appeal can exacerbate the existing challenge of running a profitable lab. Already operating on lean margins compounded by additional delays in revenue due to authorization denials, along with the additional cost of resources required to appeal in higher volumes, it is without question that labs need to invest in innovation and efficiency in order to survive.
EKRA and PAMA Fallout Continues
In her session, XIFIN CEO and Executive Chairman, Lâle White discussed how the new formula that includes hospital outreach patients but excludes outpatients, will cause harm to laboratories and further erode pricing. Moreover, XIFIN analysis of claims data indicates private payors are actually cutting rates faster and more steeply than Medicare. Similarly, EKRA is a policy many labs feel is overreaching and unnecessarily prohibitive to how commissions are structured for laboratory sales. NILA’s speakers provided attendees with a healthy debate and exploration of how labs, big and small, can remain compliant while financially supporting a talented and motivated sales force.
Battling the Labs-Are-Commodities Bias
As Lâle pointed out, laboratories have fallen behind on advancing their technologies and adoption of data utilization. This led to an extensive debate on how behaviors and passive tendencies of our industry/providers drive the implication that laboratory services are a commodity. Ultimately, laboratories that sell in volumes on price drive a commoditization, while laboratories that curate data and aggregate that information into meaningful treatment decision-making for their physician community will successfully align themselves as the provider of diagnostic value versus a simply being provider of testing. Ultimately, labs that utilize their diagnostic data for the means of improving patient care can leverage relationships with hospitals and payors to help improve outcomes and reduce costs. They will, long term, be the winners.
The ROI on data curation has the potential to be significant if done well. “Insight-driven” organizations are sustaining an average of more than 30% growth annually – 8 times faster than global GDP. However, data scientists spend 60% of their time on cleaning, organizing and manipulating data in order to prepare it for analysis. Laboratories who leverage sophisticated platforms for RCM, LIS, and clinical data management will undoubtedly position themselves as valuable resources in their marketplace and set the pace for defining the new role of the laboratory in healthcare. The consensus is that labs should fight back against reimbursement cuts, poorly written policies that impact the quality of patient care, and overall lack of acknowledgment or consideration to the role laboratories play in the healthcare industry – but it seems too few are willing to go into battle. There is a real chance that if this doesn’t change, complacency will determine the lab’s destiny. For forward-thinking action-oriented labs, data will drive value, but for everyone else, commoditization will exist where innovation does not.