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Routine Lab Volume in the US Sees Steep Drop, Gradual Recovery Due to COVID-19

Diagnostic laboratories remain at the forefront of US efforts to assess and control the spread of COVID-19. Diagnostics play a critical role both in the US pandemic response and also in helping the country as states establish plans to re-open. As states, and therefore laboratories, continue to focus on COVID-19 virus testing with the recent addition of antibody testing, elective and non-urgent diagnostic testing have been delayed. Labs are, as a result, experiencing dramatic changes in volume and testing mix.

Recently, Lâle White, Executive Chairman and Chief Executive Officer of XIFIN and Kyle Fetter, XIFIN Executive Vice President & General Manager of Diagnostic Services, joined healthcare analysts from UBS for an audio conference where they discussed capacity utilization based on XIFIN client data. The replay is available here.

Last year, XIFIN processed more than $40 billion in gross annual claims billing for its hospital-based and independent diagnostic laboratory revenue cycle management (RCM) customers. Based on this data, we see that total diagnostic testing volume fell by approximately 57% at its low-point in mid-April. It has largely recovered, as COVID-19 and antibody testing have increased, along with the return of some (but not all) routine testing. Despite a drop in testing likely due to the Memorial Day holiday, last week saw overall volume at 110% of pre-COVID-19 levels; nearly 40% of that volume is COVID-19 testing, with another 9% attributed to antibody testing. Overall, routine testing accounts for just over half the current testing volumes.

Payor system errors or reluctance to fully reimburse for this testing has dampened the revenue-boosting effects of COVID and antibody testing, requiring labs to appeal or seek patient remuneration for the shortfall. We still need private payors to ensure labs are paid adequately for the important work they are providing.

Labs remain under significant financial pressure, which has a spillover effect on other providers in the healthcare ecosystem. After years of margin erosion through reimbursement compression, coverage restrictions, and regulatory hurdles, lab margins are undeniably thin. These years of ongoing cost-cutting have put many laboratories in an untenable financial position, when we as a nation need their services and agility to bring new testing capabilities online quickly more than ever before. Because margins are so low for most labs, it has been a challenge for some to quickly ramp up capacity for COVID-19 virus and antibody testing, although those that already had the necessary platforms, instruments, reagents and other needed supplies on hand have demonstrated admirable nimbleness in pivoting into new testing areas

Nearly 20 million COVID-19 tests have been administered in the US, and XIFIN has processed approximately 20% of all COVID-19 testing nationwide. But there is widespread agreement that significantly more testing — both for the virus and for antibodies — is required. As reported by the New York Times, public health experts say that anywhere from 900,000 tests to millions a day will be needed to screen hospital patients, nursing home residents and employees returning to work. 

XIFIN client data has also been broken down by lab segment, as seen in the chart below, for the week ending May 31.

Hospital-based Labs

Current total testing volume is just over 90% of pre-COVID-19 levels, with routine testing at 58% of baseline volume and COVID-19 testing contributing 18% of baseline, and antibody tests comprising 14% of baseline volumes.

Clinical Labs

Current total testing volume is at 144% of pre-COVID-19 levels, with coronavirus testing contributing 69 pre-virus percentage points, and antibody testing contributing another 15%. Routine testing stands at 59% of baseline. Based on XIFIN data, clinical labs see the lion’s share of COVID-19 testing.

Molecular Labs

Current total testing volume is 135% of pre-COVID-19 levels, with COVID-19 testing comprising 65% of baseline volume, and antibody standing at 8%. Routine testing for these labs is at 62% of baseline.

Pathology Labs

Current total testing volume is at 79% of pre-COVID-19 levels, almost all of which is routine testing (72% of baseline). COVID-19 testing is only 5% of baseline for pathology labs, and antibody testing is an even smaller portion, at 1% of baseline.

Pain Management and Toxicology Labs

Current total testing volume is at 100% of pre-pandemic levels, comprised of 48% routine testing and 52% COVID-19 testing. These labs are not performing any antibody testing at this time.

We expect to see the uptick in routine testing to continue, especially as physician practices continue to increase their capacity for Telehealth-related services.

In response to the Coronavirus pandemic, XIFIN has published an updated weekly Laboratory Volume Index with timely volume metrics so that diagnostic leaders can quickly understand the impact on the industry and their business.

XIFIN is maintaining a COVID-19 resource repository to help diagnostic service providers navigate testing, reporting, and payor billing and reimbursement requirements, as well as learning more about CARES Act loan programs and their impact.
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Published by XiFin
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