Genomics experts say this is a sign that clinical laboratory genetics testing is maturing into a powerful tool for population health
Faced with lagging sales and employee layoffs, genomics companies in the genealogy DNA testing market are shifting their focus to the healthcare aspects of the consumer genomics data they’ve compiled and aggregated.
Recent analysis of the sales of genetic tests from Ancestry and 23andMe show the market is definitely cooling, and the analysts speculate that—independent of the consequences of the COVID-19 pandemic on consumer behavior—the two clinical laboratory genetic testing companies may already have done testing for the majority of consumers who want to buy these tests.
“I think the consumer market is going to become more integrated into the healthcare experience,” Joe Grzymski, PhD, told GenomeWeb. “Whether that occurs through your primary care doctor, your large integrated health network, or your payor, I think there will be profound changes in society’s tolerance for using genetics for prevention.”
In February, Ancestry, the largest company in the home DNA testing space, announced it was laying off 6% of its workforce or approximately 100 people, across different departments due to a decline in sales, CNBC reported. Several weeks earlier, 23andMe, the second largest company in this market, also announced it was laying off about 100 people or 14% of its workforce due to declining sales.
“I wasn’t surprised by the news,” said Linda Avey, a 23andMe co-founder who is now co-founder and Chief Executive Officer at Precisely Inc., a genomics company headquartered in San Francisco. She was commenting to GenomeWeb on the recent restructuring at her former company. “The level of expensive advertising has been insane here in the US. Those [customer acquisition costs] are not a sustainable model.”
CNBC surmised that the lull in at-home genetic testing is due mainly to:
A drought of early adopters. Individuals who were interested in the testing for genealogical and health reasons, and who believed in the value of the tests, have already purchased the product.
Privacy concerns. Some potential customers may have reservations about having their DNA information collected and stored in a database due to concerns about how that data is safeguarded and its potential uses by outside companies, law enforcement, and governments.
COVID-19 May or May Not Be a Factor in Declining DNA Testing Sales
The COVID-19 pandemic may be playing a role in the decline in sales of at-home DNA testing kits. However, there are indications that the market was cooling before the virus occurred.
An article in MIT Technology Review reported that 26 million people had purchased at-home DNA testing kits by the beginning of 2019. The article also estimated that if the market continued at that pace, 100 million people were expected to purchase the tests by the end of 2020.
However, data released by research firm Second Measure, a company that analyzes credit and debit card purchases, may show a different story, reported Vox. The data showed a general decline in test kit sales in 2019. Ancestry’s sales were down 38% and 23andMe’s sales were down 54% in November 2019 compared to November 2018. The downward trend continued in December with Ancestry sales declining 15% and 23andMe sales declining 48% when compared to December 2018.
Second Measure, however, compiled data from the two companies’ websites only. They did not include testing kits that may have been purchased through other sources such as Amazon, or at brick and mortar locations.
Nevertheless, the measures being taken by genomics companies to shore up their market indicates the Second Measure data is accurate or very close.
Rise of Population-level Genomics
This decline in genealogical sales seems to be behind DNA-testing companies shifting focus to the healthcare aspects of consumer genomics. Companies like 23andMe and Ancestry are looking into developing health reports based on their customers’ data that can ascertain an individual’s risk for certain health conditions, or how they may react to prescription medications.
“We are seeing the next wave of maturity of the genetics market,” Othman Laraki, co-founder and CEO of Color Genomics, told CNBC. “If expensive diagnostic testing was genomics’ equivalent of mainframe computers, direct to consumer ancestry genetics was the hobbyist use. While the early adopter wave is petering out, we are seeing the real market (the equivalent of a PC in every home and a phone in every pocket), which is population-level use of genetics, taking hold.” (Photo copyright: San Francisco Business Times.)
For some genomics companies like 23andMe, the at-home DNA testing market was never specifically about selling testing kits. Rather, these companies envisioned a market where consumers would pay to have their DNA analyzed to obtain data on their ancestry and health, and in turn the testing companies would sell the aggregated consumer data to other organizations, such as pharmaceutical companies.
“Remember that 23andMe was never in the consumer genomics business, they were in the data aggregation business,” Spencer Wells, PhD, founder and Executive Director of the Insitome Institute, a US-based 501(c)3 nonprofit think tank focused on key areas in the field of personal genomics, told GenomeWeb. “They created a database that should in principle allow them to do what they promised, which is to improve people’s health through genomic testing.”
Even with clinical laboratory testing currently focused on COVID-19 testing, there remains an opportunity to sequence large numbers of people through at-home DNA testing and then incorporate those findings into the practice of medicine. The hope is that sales will again accelerate once consumers feel there is a compelling need for the tests.
Pathologists and clinical laboratory managers will want to watch to see if the companies that grew big by selling ancestry and genealogy tests to consumers will start to send sales reps into physicians’ offices to offer genetic tests that would be useful in diagnosing and treating patients.
Charges against this life science company executive include healthcare fraud as well as the first COVID-19 related securities fraud
In the first securities fraud prosecution involving clinical laboratory COVID-19 testing, the US federal Department of Justice (DOJ) charged the president of a Sunnyvale, Calif., life sciences biotechnology company with participating in a scheme to mislead investors and also to commit healthcare fraud, stated a DOJ press release.
The DOJ charged Mark Schena, PhD, president of Arrayit Corporation, with one count of securities fraud and one count of conspiracy to commit healthcare fraud related to submissions of more than $69 million in claims for allegedly unnecessary medical laboratory allergy and COVID-19 tests, the Associated Press (AP) reported.
“The defendant allegedly defrauded Medicare through illegal kickbacks and bribes, and then turned to exploiting the pandemic by fraudulently promoting an unproven COVID-19 test to the market,” said Brian Benczkowski, DOJ Assistant Attorney General, Criminal Division, in the DOJ press release.
According to the Washington Post, Arrayit allegedly bundled its finger-stick allergy test with the COVID-19 test kit.
Authorities Question Bundling of Tests, Claims
An affidavit in support of the criminal complaint stated that Arrayit was promoting “‘microarray technology’ for allergy and COVID-19 testing that allows for laboratory testing on a finger prick drop of blood that is placed on a paper card and sent by mail to Arrayit’s laboratory.”
The government’s investigation actually goes back two years to a time when Arrayit allegedly submitted or caused submission of $5.9 million in Medicare lab test claims and $63 million in lab test claims to private insurers through bribes and kickbacks, MedTech Dive reported.
The company’s clinical laboratory test for COVID-19 failed to receive US Food and Drug Administration Emergency Use Authorization (EUA), because it did not have the level of specificity and sensitivity required, MedTech Dive noted.
“Schena offered an Arrayit COVID-19 test in order to obtain Medicare beneficiary information that then was used to submit false and fraudulent claims for an unrelated and far more expensive allergy test for 120 allergens,” the DOJ complaint stated, adding, “Schena and others transmitted false and fraudulent e-mail communications and marketing materials about the Arrayit COVID-19 test and purported need to bundle the COVID-19 test with Arrayit’s allergy test, while never disclosing there were substantial questions about the accuracy of Arrayit’s COVID-19 test.”
Highlights of DOJ Charges
According to the DOJ press release:
Schena and others from 2018 through February allegedly “paid kickbacks and bribes” to recruiters and doctors to run a medical laboratory test for allergy screening (with 120 allergens) on patients “regardless of medical necessity and then make numerous misrepresentations to potential investors.”
News releases and social media promoted partnerships with companies and government agencies that either “did not exist” or were minor.
As the pandemic heated up, Arrayit representatives “made false claims concerning Arrayit’s ability to provide accurate, fast, reliable and cheap COVID-19 tests in compliance with state and federal regulations,” prosecutors said.
According to the DOJ’s complaint, Schena told investigators developing a test for COVID-19 was “like a pastry chef” who switches from selling “strawberry pies” to selling “rhubarb and strawberry pies.”
“The allure of cheap reliable alternatives to today’s standard blood tests panels has captured the imagination of the healthcare industry, making such alternatives a prime subject for fraudsters,” said David Anderson (above), US Attorney for the Northern District of California, in the DOJ press release, adding, “The scheme described in the complaint, in which the defendant allegedly leveraged this allure by appending the fear of the COVID-19 pandemic, amounts to a cynical multi-million-dollar hoax.” (Photo copyright: San Francisco Examiner.)
DOJ Prioritizing Coronavirus Fraud
US Attorney General William Barr earlier this year called for prioritization of investigation and prosecution of coronavirus fraud schemes, noted a DOJ statement, which pointed out that these types of fraud schemes leverage COVID-19 testing information generated by healthcare providers to fraudulently bill Medicare for other tests and procedures.
In April, Dark Daily’s sister publication, The Dark Report (TDR), covered one such kickback scheme in Georgia the DOJ was investigating. In that case, a Georgia man allegedly participated in a fraudulent kickback scheme in which clinical laboratory companies paid him on a per-test basis for referring cancer genetic, coronavirus, and respiratory pathogen panel tests to labs, TDR noted.
Clearly, the DOJ is stepping up its investigation into COVID-19 test fraud. Thus, medical laboratory leaders and pathologists should remain vigilant, as they are likely to observe more enforcement activity as the pandemic persists.
Two national studies find pathologists bill out-of-network more frequently than other hospital-based specialties, and one study links that behavior to insurer reimbursement rates
Surprise bills for out-of-network services continue to be an important issue for healthcare consumers. Now comes a recently-released report from the Health Care Cost Institute (HCCI) claiming that pathologists are the specialists that most often bill for out-of-network hospital charges.
The HCCI study examined the prevalence and frequency of out-of-network billing among six specialties. The sample used for the report included 13.8 million healthcare visits to over 35 thousand hospital-based healthcare providers that occurred in 2017. The types of visits examined for the report were:
emergency medicine,
pathology,
radiology,
anesthesiology,
behavioral health, and
cardiovascular services.
The researchers calculated the percentage of out-of-network claims for both inpatient and outpatient visits to each type of the six specialties.
The study found that, overall, less than half of the specialties billed out-of-network for services obtained at in-network facilities. Providers with at least one out-of-network claim associated with an in-network outpatient visit ranged from 15% for behavioral health to 49% for emergency medicine.
Pathologists’ Out-of-Network Billing
Among the pathologists surveyed, HCCI found 33% had at least one out-of-network claim for an in-network outpatient visit. Providers with at least one out-of-network claim associated with an in-network inpatient visit ranged from 18% for cardiovascular services to 44% for both emergency and pathology services.
HCCI researchers also examined how often individual providers in the six specialties billed out-of-network at least one time and found that the majority billed out of network less than 10% of the time. However, this varied among the specialties with 36% of pathologists who billed out-of-network for inpatient visits, and 20% of pathologists who billed out-of-network for outpatient visits, did so more than 90% of the time.
The graphic above, taken from the latest HCCI report, shows “the share of providers who billed out-of-network at least once for inpatient and outpatient visits” and illustrates the percentage of out-of-network billings by pathologists compared to other hospital-based healthcare specialties. (Graphic copyright: Health Care Cost Institute.)
Pathologists Top List of Out-of-Network Specialists in Previous HCCI report
Last November, HCCI released a similar report that examined the commonality of out-of-network billing for the same six specialties plus surgical services that took place in 2017. Based on their collected data, they also estimated the amount of surprise bills that patients could expect to receive for those services.
That report found that nationally:
16.5% of visits with emergency room services had an out-of-network claim from an emergency medicine specialist.
12.9% of visits with lab/pathology services had an out-of-network claim from a pathologist.
8.3% of visits with anesthesiology services had an out-of-network claim from an anesthesiologist.
6.7% of visits with behavioral health services had an out-of-network claim from a behavioral health provider.
4.2% of visits with radiology services had an out-of-network claim from a radiologist.
2.1% of visits with surgical services had an out-of-network claim from a surgeon.
2.0% of visits with cardiovascular services had an out-of-network claim from a cardiovascular specialist.
Surgical Services the Most Expensive Out-of-Network Bill
This study also found broad variation in charges between types of services and healthcare settings. The researchers determined that the potential surprise bills for surgical visits due to out-of-network claims were of the greatest magnitude. HCCI estimated that the average potential surprise bill associated with an inpatient surgery was $22,248, while the potential surprise bill associated with an outpatient surgery was $8,493.
Out-of-Network Surprise Billing Varies Widely Depending on Location
The data was further broken down by state. For pathology services, the percentage of visits with out-of-network services in 2017 ranged from 0.3% in Minnesota to 75.3% in Kansas. HCCI researchers estimated the potential surprise bill for out-of-network pathology claims for inpatient services ranged from $14 in Louisiana to $167 in Delaware. The estimated surprise bill for out-of-network outpatient pathology services ranged from $23 in Louisiana to $218 in Wyoming.
Pathologists Also Top Out-of-Network Biller in Yale University Study
A Yale University study into surprise billing released in December and published in the journal Health Affairs found similar results, Modern Healthcare reported. This study examined surprise out-of-network bills incurred by patients who sought care at in-network hospitals for four types of specialists that are not chosen by patients:
pathologists,
anesthesiologists,
radiologists, and
assistant surgeons.
Zack Cooper, PhD (above), is an associate professor of public health at the Yale School of Public Health and one of the study’s authors. He noted in Yale News, “When physicians whom patients do not choose and cannot avoid bill out of network, it exposes people to unexpected and expensive medical bills and undercuts the functioning of US healthcare markets,” adding, “Moreover, the ability to bill out of network allows specialists to negotiate inflated in-network rates, which are passed on to consumers in the form of higher insurance premiums.” (Photo copyright: Yale School of Public Health.)
For the Yale study, the researchers examined employer-sponsored insurance claims from a major commercial insurer for healthcare visits that occurred at in-network hospitals in 2015. They found that 12.3% of cases involving a pathologist were billed out-of-network, which was the highest percentage of the four specialties analyzed. By contrast, 11.8% of anesthesiologists, 11.3% of assistant surgeons, and 5.6% of radiologists billed out-of-network for their services.
The Yale study also found that “the ability of these four specialties to send patients out-of-network bills allowed them to negotiate high in-network payments from insurers, which leads to higher insurance premiums for individuals.”
The Yale study researchers determined that were these specialists unable to bill out-of-network, the particular healthcare plan would save 3.4% of their expenditures or about $40 billion per year, Modern Healthcare reported.
Surprise bills for out-of-network services burden both patients and providers. Insurers want beneficiaries to have access to hospitals and services, but providers in many specialties do not want to contract with those insurers due to low reimbursements.
This disconnect results in providers staying out-of-network and patients receiving surprise bills for out-of-network services even though the hospital was in-network. And pathologists are at the top of the list.
Anatomic pathologists across the country will want to track how government and private payers respond to these findings by amending coverage and reimbursement guidelines in ways that may be unfavorable to the pathology profession.
Holmes’ lawyers maintain the former CEO of Theranos has not waived right to be charged by indictment and therefore argue the added charge is ‘unconstitutional’ and should be dismissed
Clinical laboratory leaders needing a break from nonstop coronavirus pandemic news will be interested to learn a familiar name is again making headlines. Disgraced Theranos founder Elizabeth Holmes—who went from paper billionaire to criminal defendant—is now facing a 12th felony fraud charge, with the additional count tied to a patient’s blood-test result.
Holmes founded the blood testing company in 2003 after dropping out of Stanford University. Though Theranos reached a peak valuation of $9 billion in 2015, according to Investopedia its unicorn-startup status began unraveling that same year when a Wall Street Journal (WSJ) investigation exposed the company’s massive deceptions and questionable practices related to its finger-prick blood-testing technology.
Holmes and codefendant Ramesh “Sunny” Balwani, former Theranos President and Chief Operating Officer, claimed Theranos had developed a medical technology that could run thousands of clinical laboratory tests using a finger-prick blood test that would return results in two hours and at a price that was 50% of Medicare’s fees for lab tests.
sanctions from the Centers for Medicare and Medicaid Services, investor lawsuits, consumer lawsuits, and a settlement with Walgreens over claims about Theranos’ Edison portable blood analyzer, CNBC reported. Theranos ceased operations in September 2018.
Elizabeth Holmes is seen above entering the Northern District of California courthouse with attorneys Kevin Downey (left) and Lance Wade (right) of the law firm Williams and Connolly. (Photo copyright: Jason Doiy/ALM)
The 12th Felony Charge Against Elizabeth Holmes
Earlier in 2018, David L. Anderson, US Attorney for the Northern District of California indicted Holmes and Balwani on 11 counts of wire fraud and conspiracy to commit wire fraud.
Now, an additional wire fraud charge has been added to that list. The 12th felony charge was included in Superseding Information federal prosecutors filed with the court on May 8. Superseding Information is a charging document that does not require a grand jury proceeding.
In the filing, the latest allegation of fraud is alleged to have occurred on October 12, 2015, in the states of California and Arizona and is described as a “telephone call from Patient B.B. to Theranos regarding laboratory blood test results.”
The Superseding Information states: “Knowing that the accuracy and reliability of Theranos test results was questionable and suspect, Holmes and Balwani oversaw the electronic wiring of test results to patients, including persons known to the Attorney for the United States as Patients B.B, E.T., and M.E. These wires … travelled between one state and another.”
The amended charging document also more than doubles the length of time the pair are alleged to have conspired to defraud investors, adds additional categories of alleged victims, and revises the dates of two of the other prior wire fraud charges, changing them from 2014 to 2015.
“In particular, Holmes and Balwani knew that Theranos was not capable of consistently producing accurate and reliable results for certain blood tests, including but not limited to bicarbonate, calcium, chloride, cholesterol/HDL/LDL, gonorrhea, glucose, HbA1c, hCG, HIV, LDH, potassium, PSA, PT/INR, sodium, testosterone, TSH, vitamin D (25-OH), and all assays conducted on Theranos’ TSPU [Theranos Sample Processing Unit] version 3.5, including estradiol, prolactin, SHBG, thyroxine (T4/free T4), triiodothyronine, and vitamin B-12,” the Superseding Information states.
According to Law.com, Holmes’ lawyers at Williams and Connolly responded by filing a motion to dismiss the Superseding Information. Because grand jury proceedings have been suspended in the Northern District of California since mid-March due to COVID-19, they argue that Holmes, who hasn’t waived the right to be charged by grand jury indictment, is unable to be arraigned. They maintain the prosecutors’ actions violate her rights under the US Constitution and Federal Rules of Criminal Procedure Rule 7, which requires crimes punishable by a prison sentence of more than a year to be charged by indictment unless the defendant waives that right.
“Because Ms. Holmes does not waive prosecution by indictment, convening an arraignment on this information would be pointless and a waste of the Court’s time because no arraignment could actually occur,” her lawyers wrote in their motion. “The Court should dismiss this unconstitutional information without scheduling an arraignment.”
On May 26, prosecutors filed their opposition to the defendants’ motion to dismiss. They maintained that US District Judge Edward Davila should either deny the defense request outright or hold off ruling until a “reasonable time after the Court lifts the suspension of grand jury hearings.”
They wrote, “Defendants’ claim that an information must be ‘dismissed immediately’ because it is not the constitutionally required indictment proves too much,” adding, “Criminal charges are initiated all the time through preliminary proceedings like a complaint or an information. They are not ‘patently unconstitutional merely because a defendant has indicated she will not waive her right to be prosecuted by indictment.”
COVID-19 Delays Court Proceedings
Holmes’ trial originally was set to begin in August, but the COVID-19 pandemic has resulted in the case being postponed to October 27, reported CNBC. According to Davila, “We’re in unchartered waters and unchartered territories. We need to make sure the environment is safe for all parties, including the jury that’s called to hear the matter.”
The Theranos scandal continues to serve as a reminder to clinical laboratory leaders
and pathology groups that questionable or deceptive business practices eventually will draw the attention of federal regulators, prosecutors, and consumers, and that the penalty for fraud can be severe. The frustration for medical laboratory professionals and pathologists is that it generally takes years for federal investigators to bring charges against such frauds.
One medical testing company was led by a convicted felon, another was accused of delays and unreliable results
Like many states, Florida has worked hard to quickly ramp up diagnostic testing for SARS-CoV-2, the coronavirus that causes the COVID-19 illness. For the most part this has been a good thing. However, local media in that state reported problems with two no-bid contracts for clinical laboratory testing, including one with a Dallas-based company whose founder pleaded guilty last year to two felonies involving insurance fraud.
In a press conference announcing the two deals, Florida Governor Ron DeSantis said, “We have two contracts in place with two new labs that will increase our lab capacity by 18,000 samples per day.” He added that he expected a 24- to 48-hour turnaround.
“That’s a lot better than we’ve been getting from Quest and LabCorp,” he said. “These labs will be primarily where we send our samples that we collect in the long-term-care and assisted-living facilities and at the community-based walk-up sites.”
The announcement followed DeSantis’ March 9 emergency decree, which allowed state agencies to award contracts to companies without undergoing formal bidding processes, reported Florida Bulldog, an independent non-profit news site.
In his announcement, DeSantis did not identify the companies that had received the lab test contracts. However, Florida Bulldog reported that those companies were:
Indur Services, a Dallas-based health-coaching company, and
Southwest Regional PCR, a CAP-accredited lab in Lubbock, Texas, that does business as MicroGenDX Laboratory (MicroGen Diagnostics, LLC).
The Indur contract—initially valued at $11.3 million—included $10.2 million for 140,000 COVID-19 RT-qPCR test kits, plus additional payment for supplies, Florida Bulldog reported based on information from the state contract database. Later, the contract was reduced to $2.2 million solely for supplies.
The MicroGenDX contract—valued at $11 million—called for 8,000 tests per day for 14 days at a cost of $99 per test, Florida Bulldog reported. That contract was later cancelled due to concerns about reliability and processing speed.
Indur’s Legal Troubles
Indur is a self-described “health and wellness lifestyle and products company” founded in 2017 by Brandt Beal, according to Business Insider. In 2019, Beal pleaded guilty to two felonies involving insurance fraud in Texas and was given 10 years’ probation in each case, Florida Bulldog reported. He also was required to pay restitution. He pleaded guilty to a separate charge of felony theft in 2017 and was sentenced to nine years’ probation.
In an interview with Florida Bulldog, Beal claimed that “the man who pleaded guilty to those charges is actually his cousin with the same name.” However, Beal “would not provide requested contact information for his cousin,” the Florida Bulldog reported, which posted photos demonstrating that the Indur founder and the person who pleaded guilty to the felonies were the same individual.
Jason Mahon, Communications Director at the Florida Division of Emergency Management (above), told Florida Bulldog that Indur’s COVID-19 testing contract was scaled back in May “because Indur Services did not provide testing directly, but rather was providing testing services through another company.” The state then contracted directly with that clinical laboratory company to obtain the COVID-19 testing services. “Time is of the essence when securing these critical testing supplies for Floridians, and that limited time does not allow for the Division to vet every company’s executive leadership or board of directors,” Mahon told Florida Bulldog. (Photo copyright: LinkedIn.)
The amended contract, valued at $2.2 million, called for Indur to deliver swabs and vials. “To date, everything that’s been ordered they’ve delivered on,” said Jared Moskowitz, Director of the Florida Division of Emergency Management department.
Testing Delays Snag MicroGen Diagnostics
The state cancelled its contract with MicroGenDX on May 15, Florida Bulldog reported.
“As with any lab, we do our due diligence to ensure the company will be able to provide reliable services before sending any samples,” said Jason Mahon, Communications Director at the Florida Division of Emergency Management. “Upon further interaction with this vendor, the Division determined that the state could not be 100% confident in the results that would come from this vendor, or with the processing speed, which is critical for COVID-19 testing.”
This came as AdventHealth, a non-profit health system based in Altamonte Springs, Fla., was having its own difficulties with MicroGenDX.
On May 16, AdventHealth announced that it had terminated a COVID-19 testing contract with an unnamed third-party lab, claiming that the provider was “unable to fulfill its obligation.” Multiple media outlets later revealed MicroGenDX as the third-party lab, and USA Today reported that the FDA had launched an investigation.
“This issue impacts more than 25,000 people throughout Central Florida,” stated an AdventHealth press release. “This situation has created unacceptable delays and we do not have confidence in the reliability of the tests.” AdventHealth said it would contact affected individuals about the need for retesting.
However, MicroGenDX CEO Rick Martin refuted the health system’s claims. “You can go after me because I didn’t meet your capacity and I couldn’t deliver on your drive-through testing because of things that I couldn’t control, but don’t attack the reliability of my test,” he told the Orlando Sentinel.
According to MicroGenDX, the company received an emergency use authorization (EUA) from the FDA on April 23 for an internally-developed RT-PCR test that can be performed on nasal swabs or sputum samples, noted a press release. The tests are run in the company’s lab facility in Lubbock, Texas.
One factor in the dispute was the handling of patient samples, USA Today reported. Martin told reporters that representatives from AdventHealth had visited the lab and observed samples that were stored at room temperature. “[Martin] maintains the samples were still valid and that the delays were due to AdventHealth not providing proper patient data and the lab running out of plastic parts used in its equipment,” noted USA Today.
Mahon told Florida Bulldog that the state did not send samples to MicroGenDX for processing. And the Florida Bulldog reported that Martin said his lab was so “hammered with huge volumes of samples” that he would have turned down any requests, adding that Martin “stood by the reliability and accuracy of his firm’s testing and said he looks forward to a day of vindication after federal inspectors conduct any inquiries.”
Collectively, these news stories scratch the surface of a bigger situation involving COVID-19 laboratory testing. The fact that Congress authorized billions of dollars to fund COVID-19 testing was noticed by some individuals who saw the funding as an opportunity to “make a quick buck” if they could get contracts to provide COVID-19 testing—whether they owned a CLIA-certified complex laboratory or not.
Thus, it’s no surprise that more companies are bidding on COVID-19 testing contracts. What remains unknown is how many of those companies are actively soliciting COVID-19 testing contracts throughout the United States.
Given this situation, and the facts recounted above, it is reasonable to ask an obvious question: Why did Florida state officials not do a more rigorous check into the credentials of the clinical laboratory entities they were preparing to award no-competitive-bid contracts to for COVID-19 testing?
In the absence of a “gold standard,” researchers are finding a high frequency of false negatives among SARS-CoV-2 RT-PCR tests
Serology tests designed to detect antibodies to the SARS-CoV-2 coronavirus that causes the COVID-19 illness have been dogged by well-publicized questions about accuracy. However, researchers also are raising concerns about the accuracy of molecular diagnostics which claim to detect the actual presence of the coronavirus itself.
“Diagnostic tests, typically involving a nasopharyngeal swab, can be inaccurate in two ways,” said Steven Woloshin, MD, MS, in a news release announcing a new report that “examines challenges and implications of false-negative COVID-19 tests.” Woloshin is an internist, a professor at Dartmouth Institute, and co-director of the Geisel School of Medicine at Dartmouth.
“A false-positive result mistakenly labels a person infected, with consequences including unnecessary quarantine and contact tracing,” he stated in the news release. “False-negative results are far more consequential, because infected persons who might be asymptomatic may not be isolated and can infect others.”
Woloshin led a team of Dartmouth researchers who analyzed two studies from Wuhan, China, and a literature review by researchers in Europe and South America that indicated diagnostic tests for COVID-19 are frequently generating false negatives. The team published their results in the June 5 New England Journal of Medicine (NEJM).
For example, one research team in Wuhan collected samples from 213 hospitalized COVID-19 patients and found that an approved RT-PCR test produced false negatives in 11% of sputum samples, 27% of nasal samples, and 40% of throat samples. Their research was published on the medRxiv preprint server and has not been peer-reviewed.
The literature review Woloshin’s team studied was also published on medRxiv, titled, “False-Negative Results of Initial Rt-PCR Assays for COVID-19: A Systematic Review.” It indicated that the rate of false negatives could be as high as 29%. The authors of the review looked at five studies that had enrolled a total of 957 patients. “The collected evidence has several limitations, including risk of bias issues, high heterogeneity, and concerns about its applicability,” they wrote. “Nonetheless, our findings reinforce the need for repeated testing in patients with suspicion of SARS-Cov-2 infection.”
Another literature review, published in the Annals of Internal Medicine, titled, “Variation in False-Negative Rate of Reverse Transcriptase Polymerase Chain Reaction–Based SARS-CoV-2 Tests by Time Since Exposure,” estimated the probability of false negatives in RT-PCR tests at varying intervals from the time of exposure and symptom onset. For example, the authors found that the median false-negative rate was 38% if a test was performed on the day of symptom onset, versus 20% three days after onset. Their analysis was based on seven studies, five of which were peer-reviewed, with a total of 1330 test samples.
Doctors also are seeing anecdotal evidence of false negatives. For example, clinicians at UC San Diego Health medical center treated a patient with obvious symptoms of COVID-19, but two tests performed on throat samples were negative. However, a third test, using a sample from a bronchial wash, identified the virus, reported Medscape.
Sensitivity and Specificity of COVID-19 Clinical Laboratory Tests
The key measures of test accuracy are sensitivity, which refers to the ability to detect the presence of the virus, and specificity, the ability to determine that the targeted pathogen is not present. “So, a sensitive test is less likely to provide a false-negative result and a specific test is less likely to provide a false-positive result,” wrote Kirsten Meek, PhD, medical writer and editor, in an article for ARUP Laboratories.
“Analytic” sensitivity and specificity “represent the accuracy of a test under ideal conditions in which specimens have been collected from patients with either high viral loads or a complete absence of exposure,” she wrote. However, “sensitivity and specificity under real-world conditions, in which patients are more variable and specimen collection may not be ideal, can often be lower than reported numbers.”
In a statement defending its ID Now molecular point-of-care test, which came under scrutiny during a study of COVID-19 molecular tests by NYU Langone Health, Northwell Health, and Cleveland Clinic, according to MedTech Dive, Abbott Laboratories blamed improper sample collection and handling for highly-publicized false negatives produced by its rapid test. An FDA issued alert about the test on May 14 noted that Abbott had agreed to conduct post-market studies to identify the cause of the false negatives and suggest remedial actions.
Issues with Emergency Use Authorizations
In their NEJM analysis, Woloshin et al point to issues with the FDA’s process for issuing Emergency Use Authorizations (EUAs). For example, they noted variations in how manufacturers are conducting clinical evaluations to determine test performance. “The FDA prefers the use of ‘natural clinical specimens’ but has permitted the use of ‘contrived specimens’ produced by adding viral RNA or inactivated virus to leftover clinical material,” they wrote.
When evaluating clinical performance, manufacturers ordinarily conduct an index test of patients and compare the results with reference-standard test, according to the Dartmouth researchers. For people showing symptoms, the reference standard should be a clinical diagnosis performed by an independent adjudication panel. However, they wrote, “it is unclear whether the sensitivity of any FDA-authorized commercial test has been assessed in this way.” Additionally, a reference standard for determining sensitivity in asymptomatic people “is an unsolved problem that needs urgent attention to increase confidence in test results for contact-tracing or screening purposes.”
“To truly determine false negatives, you need a gold standard test, which is essentially as close to perfect as we can get,” Stephen Rawlings, MD, PhD, (above), a resident physician of internal medicine and infectious diseases fellow at UC San Diego’s Center for AIDS Research (CFAR), who has been working on SARS-CoV-2 test validation since March. “But there just isn’t one yet for coronavirus,” he told Medscape. (Photo copyright: University of California, San Diego.)
Continued adherence to current measures, such as physical distancing and surface disinfection.
Development of highly sensitive and specific tests or combinations of tests to minimize the risk of false-negative results and ongoing transmission based on a false sense of security.
Improved RT-PCR tests and serological assays.
Development and communication of clear risk-stratified protocols for management of negative COVID-19 test results.
“These protocols must evolve as diagnostic test, transmission, and outcome statistics become more available,” they wrote.
Meanwhile, clinical laboratories remain somewhat on their own at selecting which COVID-19 molecular and serology tests they want to purchase and run in their labs. Complicating such decisions is the fact that many of the nation’s most reputable in vitro diagnostics manufacturers cannot produce enough of their COVID-19 tests to meet demand.
Consequently, when looking to purchase tests for SARS-CoV-2, smaller medical laboratory organizations find themselves evaluating COVID-19 kits developed by little-known or even brand-new companies.
