Executives and pathologists from many of the nation’s most prominent clinical laboratories are on their way to the Crescent City today to share best practices, hear case studies from innovative labs, and network
NEW ORLEANS—This afternoon, more than 900 lab CEOs, administrators, and pathologists will convene for the 28th Annual Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management conference. Three topics of great interest will center around adequate lab staffing, effective cost management, and developing new sources of lab testing revenue.
Important sessions will also address the explosion in next-generation sequencing and genetic testing, proposed FDA regulation of laboratory-developed tests (LDTs), and innovative ways that clinical laboratories and pathology groups can add value and be paid for that additional value.
All this is happening amidst important changes to healthcare and medicine in the United States. “Today, the US healthcare system is transforming itself at a steady pace,” explained Robert L. Michel, Editor-in-Chief of The Dark Report and Founder of the Executive War College. “Big multi-hospital health systems are merging with each other, and payers are slashing reimbursement for many medical lab tests, even as healthcare consumers want direct access to clinical laboratory tests and the full record of their lab test history.
“Each of these developments has major implications in how clinical laboratories serve their parent organizations, offer services directly to consumers, and negotiate with payers for fair reimbursement as in-network providers,” Michel added. “Attending the Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management equips lab leaders with the tools they’ll need to make smart decisions during these challenging times.”
Now in its 28th year, the Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management convenes April 25-26 in New Orleans. Executive War College extends to a third day with three full-day workshops: LEAN fundamentals for lab leaders, a genetic testing program track, and a digital pathology track. Learn more at www.ExecutiveWarCollege.com. (Photo copyright: The Dark Intelligence Group.)
Challenges and Opportunities for Clinical Laboratories
With major changes unfolding in the delivery and reimbursement of clinical services, clinical laboratory and pathology practice leaders need effective ways to respond to the evolving needs of physicians, patients, and payers. As The Dark Report has often covered, three overlapping areas are a source of tension and financial pressure for labs:
Day-to-day pressures to manage costs in the clinical laboratory or pathology practice.
The growing demand for genetic testing, accompanied by reimbursement challenges.
Evolving consumer expectations in how they receive medical care and interact with providers.
Addressing all three issues and much more, the 2023 Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management features more than 80 sessions with up to 125 lab managers, consultants, vendors, and in vitro diagnostic (IVD) experts as speakers and panelists.
Old-School Lab Rules Have Evolved into New-School Lab Rules
Tuesday’s keynote general sessions (to be reported exclusively in Wednesday’s Dark Daily ebriefing) will include four points of interest for clinical laboratory and pathology leaders who are managing change and pursuing new opportunities:
Positioning the lab to prosper by serving healthcare’s new consumers, new care models, new payment models, and more, with Michel at the podium.
How old-school lab rules have evolved into new-school lab rules and ways to transition the lab through today’s disrupters in healthcare and the clinical laboratory marketplace, with Stan Schofield, Managing Principal of the Compass Group.
Generating value by identifying risk signals in longitudinal lab data and opportunities in big data from payers, physicians, pharma, and bioresearch, with Brad Bostic, Chairman and CEO of hc1.
Wednesday’s keynote sessions (see exclusive insights in Friday’s Dark Daily ebriefing) explore:
Wednesday’s keynotes conclude with a panel discussion on delivering value to physicians, patients, and payers with lab testing services.
Clinical Labs, Payers, and Health Plans Swamped by Genetic Test Claims
Attendees of the 2023 Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management may notice a greater emphasis on whole genome sequencing and genetic testing this year.
As regular coverage and analysis in The Dark Report has pointed out, clinical laboratories, payers, and health plans face challenges with the explosion of genetic testing. Several Executive War College Master Classes will explore critical management issues of genetic and genomic testing, including laboratory benefit management programs, coverage decisions, payer relations, and best coding practices, as well as genetic test stewardship.
This year’s Executive War College also devotes a one-day intensive session on how community hospitals and local labs can set up and offer genetic tests and next-generation sequencing services. This third-day track features more than a dozen experts including:
During these sessions, attendees will be introduced to “dry labs” and “virtual CLIA labs.” These new terms differentiate the two organizations that process genetic data generated by “wet labs,” annotate it, and provide analysis and interpretation for referring physicians.
State of the Industry: Clinical Lab, Private Practice Pathology, Genetic Testing, IVD, and More
For lab consultants, executives, and directors interested in state-of-the-industry Q/A and discussions concerning commercial laboratories, private-practice pathology, and in vitro diagnostics companies, a range of breakout sessions, panels, and roundtables will cover:
Action steps to protect pathologists’ income and boost practice revenue.
Important developments in laboratory legal, regulatory, and compliance requirements.
New developments in clinical laboratory certification and accreditation, including the most common deficiencies and how to reach “assessment ready” status.
An update on the IVD industry and what’s working in today’s post-pandemic market for lab vendors and their customers.
Federal government updates on issues of concern to clinical laboratories, including PAMA, the VALID Act, and more.
Long-time attendees will notice the inclusion of “Diagnostics” into the Executive War College moniker. It’s an important addition, Michel explained for Dark Daily.
“In the recent past, ‘clinical laboratory’ and ‘anatomic pathology’ were terms that sufficiently described the profession of laboratory medicine,” he noted. “However, a subtle but significant change has occurred in recent years. The term ‘diagnostics’ has become a common description for medical testing, along with other diagnostic areas such as radiology and imaging.”
Key managers of medical laboratories, pathology groups, and in vitro diagnostics have much to gain from attending the Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management, now in its 28th year. Look for continued coverage through social media channels, at Dark Daily, and in The Dark Report.
The 2023 conference comes as clinical laboratories, diagnostics companies, and anatomic pathology practices wrestle with budgets that are strained by inflation, supply chain woes, and the faltering financial performance of parent hospitals and health systems. Meanwhile, lab hiring managers continue to face a severe staffing shortage of diagnostics employees.
“The current twin trends of hospitals losing money and labs struggling to maintain adequate staffing is without parallel in my 30 years of covering the clinical laboratory, diagnostics, and pathology sectors,” said Robert Michel, Founder of the Executive War College and Editor-in-Chief at Dark Daily. “This is a perfect storm that threatens the ability of labs to sustain high-quality testing services in a financially-sustainable manner. At the 2023 Executive War College, we are going to help participants get through this predicament by giving them innovative insights and best-in-class expertise they can take back and implement in their clinical labs and pathology groups.”
“Staffing and supply chain difficulties are not the only burdens facing clinical laboratories,” said Robert Michel (above), Founder of the Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management. “Equally stressful forces are altering how providers, payers, and healthcare consumers access medical laboratory testing and pay for those services.” (Photo copyright: The Dark Intelligence Group.)
Earning New Revenue Will Take Center Stage at 2023 Executive War College
The full agenda for the 2023 Executive War College has not yet been released, but attendees can expect to see keynote presentations and sessions devoted to pressing topics in the diagnostics and laboratory industries. Among them is how to best position the clinical lab as a growing revenue source.
“With financial pressures mounting, we intend to present cutting-edge advice from innovative clinical laboratories, diagnostics companies, and pathology practices about how they earn new revenue—whether that be through creating business opportunities in the community, uncovering new test reimbursements, or using technology to improve existing processes,” Michel explained.
Last spring’s gathering of the Executive War College featured 10 keynotes, 55 sessions, and three post-conference workshops. Participants at the upcoming 2023 Executive War College conference can expect a similar bonanza of educational and professional development options, as well as collaborative networking breaks, luncheons, and receptions.
“The chance to meet innovative peers from across the country, share lab-related challenges with them, and compare effective solutions makes the Executive War College a cost-effective investment for any laboratory administrator, executive, or business-minded pathologist,” Michel added.
Diagnostics Services Will Be Better Reflected at 2023 Conference
For the first time, the conference’s moniker directly reflects the diagnostic work associated with clinical laboratories and pathology groups.
“Long-time attendees will notice that we tweaked the Executive War College’s full title to emphasize ‘diagnostics.’ That term is an important addition,” Michel noted.
“In the recent past, ‘clinical laboratory’ and ‘anatomic pathology’ were terms that sufficiently described the profession of laboratory medicine,” he continued. “However, a subtle but significant change has occurred in recent years. The term ‘diagnostics’ has become a common description for medical testing, along with other diagnostic areas such as radiology and imaging.”
Keep an eye on the conference’s website, ExecutiveWarCollege.com, for updates about the upcoming program and to see the session topics and speakers as they are confirmed and announced.
“The Executive War College is the top gathering for lab leaders to learn from the profession’s best innovators and gain insights they will need to keep their laboratories at the cutting edge of clinical excellence in a financially sustainable manner,” Michel concluded.
Register today to ensure places for you and your management team at the 2023 Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management. Click here for early registration discounts.
Two former FDA commissioners who support changing oversight of laboratory-developed tests (LDTs) say FDA’s regulatory playbook is ‘outdated’
Congress’ attempts to avoid a government shutdown due to a lack of funding presents a final chance this year for two different clinical laboratory bills to be pushed through.
As Dark Daily’s sister publication The Dark Report, noted in “VALID and SALSA Acts Still Pending in Congress,” a standalone vote on either bill is unlikely this year. Instead, they would need to be attached to the larger spending bill. (If you’re not a subscriber to The Dark Report, check out our free trial.)
In an article for STAT, former FDA Commissioners Scott Gottlieb, MD (left), and Mark McClellan, MD, PhD (right), wrote, “The FDA is currently working from an outdated regulatory playbook that has left gaps in its oversight of safety and effectiveness and makes it more difficult to introduce new innovations. The [VALID Act] would strengthen protections for consumers and patients for both diagnostic tests and cosmetics and make it easier for manufacturers to introduce better products.” (Photo copyrights: FDA/American Well.)
Political Parties Negotiating
At press time, a draft spending bill had not yet been introduced to Congress as lawmakers from both political parties negotiate funding levels.
A source told The Dark Report that until legislators hammer out those details, add-ons such as the VALID Act or SALSA are stalled. There is no guarantee either lab measure will be added to the spending bill.
“We don’t have agreements to do virtually anything,” said Senate Minority Leader Mitch McConnell (R-KY) to reporters on Dec. 6, according to Reuters. “We don’t even have an overall agreement on how much we want to spend,” he added. Reuters reported that Democrats and Republicans in the Senate were $25 billion apart in their proposals.
Congress could also pass a continuing resolution to keep the government open for a short time, which would allow lawmakers more opportunity to negotiate.
Former FDA Chiefs Weigh In
Meanwhile, proponents of the VALID Act have publicly turned the heat up for the bill. For example, STAT recently ran two commentaries—including a joint piece from a pair of former FDA commissioners—in support of the VALID Act.
Currently, LDTs are regulated through the Clinical Laboratory Improvement Amendments of 1988 (CLIA). However, supporters of the VALID Act argue that the complexity of modern LDTs deserves more scrutiny.
“The VALID Act would create a consistent standard for all tests, regardless of the kind of facility they were developed in or made in, as well as a modern regulatory framework that’s uniquely designed for the recent and emerging technologies being used to develop tests,” wrote Scott Gottlieb, MD, and Mark McClellan, MD, PhD, in STAT on Dec. 5.
Gottlieb and McClellan served as FDA commissioners from 2017-2019 and 2002-2004 respectively. They both currently serve on various boards for biotech and healthcare companies.
Pathologists, Clinical Lab Directors Express Concerns about VALID Act
Opponents of the VALID Act contend that LDT innovation will be stifled if clinical laboratories, particularly those at academic medical centers, need to spend the time and money to go through formal FDA approval. There is evidence that working pathologists in academic settings have legitimate concerns about the negative consequences that might result if the VALID Act was passed as currently written.
In “Might Valid Act Support Be Waning in Congress?” The Dark Report covered how on June 1 more than 290 pathologists and clinical laboratory directors sent a grassroots letter to a Senate committee asking for a series of concessions to be made for academic medical center labs under the VALID Act.
It is reasonable to assert that the majority of clinical laboratory professionals and pathologists are supportive of the SALSA bill, which would stop the next round of scheduled price cuts—as much as a 15% price reduction to many tests—to the Medicare Part B Clinical Laboratory Fee Schedule (CLFS). That is not true of support for the VALID Act, as currently written. Sizeable segments of the diagnostics industry have taken opposing positions regarding passage of that legislation.
For these reasons, both bills will be closely watched in coming weeks as Congress works to fund the federal government while, at the same time, incorporating a variety of other bills under the omnibus bill, which is a considered a “must pass” by many senators and representatives.
Negative margins, a shift to nontraditional care sites, and an increasingly complex logistics environment should prompt clinical labs and anatomic pathology groups to quickly evaluate shipping costs and data analysis
In September, American Hospital Association (AHA) leaders and Kaufman Hall healthcare analysts posted a particularly dismal status update for US hospitals, saying more than half are projected to operate in negative margins for the rest of the year.
As a result, hospital and healthcare leaders are likely facing difficult decisions around traditional operations while actively seeking new partnerships to increase reach and impact of their hospital services, including clinical lab and pathology testing.
Market pressures and revenue opportunities, including nontraditional clinical trial designs, hospital-at-home programs, and innovative care management for patient cohorts, are reshaping healthcare around the US. These and other ensuing shifts will add complexity on top of already burgeoning costs to the physical logistics of clinical laboratory testing and pathology services.
Traditional and Nontraditional: Conduct Assessments of Lab Shipping Costs and Logistics Management
Analyzing data of dynamic logistical inputs will support informed service line decision-making and can ultimately lead to cost savings for clinical labs and health systems, according to Jeff Ledbetter, regional consultant for Cardinal Health OptiFreight Logistics. Ledbetter monitors cost-per-shipment models and trends in service modes for a variety of healthcare providers, networks, and reference laboratories.
“What I’ve seen in the marketplace is that labs have historically built a reliance on physician offices across the country,” Ledbetter explained in an interview with Dark Daily. “What is changing is that labs have diversified their client base and who they now consider customers.” Some of the new inputs include individual consumers, corporations, and schools, in addition to integrated delivery networks (IDNs) and IDN-like entities.
For Dark Daily, regional consultant for Cardinal Health Jeff Ledbetter explained three data trends guiding cost-saving clinical laboratory logistics strategies and benchmarking. These will be important as labs diversify their client base and who they now consider customers. (Photo copyright: Jeff Ledbetter.)
The problem, Ledbetter said, is that lab executives are not able to see the profitability of their customer types and cannot achieve operational efficiencies because of the more complex and dynamic inbound and outbound shipment flow.
Ledbetter describes three ways to analyze lab costs:
1. Cost-per-pack benchmarking,
2. Ratio of test kit outflow to inflow, and
3. Visibility to shipments for workflow management and staffing availability.
With multiple transportation components for each test performed, “a hidden cost element is wasted test kits,” Ledbetter said. “We look at the ratio of specimens sent out but not returned to the lab. Each lab kit passes through multiple modes of transportation. Kits that are deployed but not returned to the lab become waste, resulting in sunken cost. When I talk to reference lab leaders, they understand this is an issue, but they don’t know how to manage it.” Ledbetter points to OptiFreight Logistics’ robust analytics as a critical element to help manage the waste. To increase profitability, the lab can adjust to whom and how it deploys kits to optimize the number of kits with specimens that return to the lab for testing.
A related issue is understanding the ratio of outflow to inflow for identifying profitability of customers. “Managing customers is now shaped by data points such as productive and profitable pickups,” Ledbetter said. For example, a returned shipment with five specimens is more profitable than a shipment with only one specimen.
“We also look at efficiencies that consider the number of lab employees needed to accession specimens, and how delivery timing can maximize efficiency of the testing operation,” Ledbetter said. “This is based on the mode of service and available delivery time.”
The starting point, Ledbetter said, is to gain continuous data-driven insights into the best possible service modes and specimen pack timing that will improve the lab’s operational efficiency, ease staffing constraints, and correlate with business-critical key performance indicators. Amid an ongoing shift to nontraditional care sites, this level of visibility is critical, he added.
Aggressive Adoption of Decentralized Clinical Trial Services Expected
Following a Clinical Operations Roundtable, global management consulting firm McKinsey and Company explored the acceleration of decentralized clinical trials post-pandemic. Experts there define that model as a clinical trial centered around patient needs that improves the patient experience. By design, decentralized clinical trials will use one or more “decentralization elements” based on suitability for their end points, patient populations, and treatments.
“Clinical-trial sponsors creating hybrid protocols are drawing from the menu of decentralization services and technology interventions, such as remote monitoring of vitals, mobile clinics, and home visits,” wrote Life Sciences Practice leader Gaurav Agrawal and others for the McKinsey and Company report, “No Place Like Home? Stepping Up the Decentralization of Clinical Trials.”
“Traditional site visits will still be needed for complex procedures and specialized assessments, such as screenings and magnetic resonance imaging. So smart, hybrid trial designs will make other touchpoints virtual or closer to the patients—for instance, through mobile clinics and primary-care physicians—whenever possible,” states the McKinsey report. The graphic below shows potential trends that will be of interest to hospital and IDN executives, clinical laboratory leaders, and anatomic pathology group administrators.
According to McKinsey and Company research, clinical trial investigators anticipate a threefold increase in remote patient interactions compared to before the pandemic, although that comfort level is lower than during the peak of the pandemic. (Source: McKinsey and Company and Nature Reviews Drug Discovery.)
Since specific laboratory tests mark key points within the care continuum, decentralization creates a more dynamic environment for specimen logistics, making visibility, data analytics, and predictive technology around lab deliveries essential for maximum profitability.
Hospital at Home and Moving Lab to Home
As the healthcare industry shifts to the home as a site of care, legacy patient-provider relationships and business will face disruption, executives at The Chartis Group wrote in a blog post published in September.
“Health systems would do well to consider how they are positioned to deliver care at home as an integrated part of their care models,” Chartis wrote in its blog. “This may include evaluating legacy home health assets and programs, while also rapidly evaluating the business case for launching a hospital-at-home program as part of their broader strategic and operational plans.”
Although outpatient services have taken to the flavor of innovation, hospital-at-home models may not be easy. “Simply extending the reach of hospitals into patients’ homes is unlikely to allow the promising scale or cost savings stakeholders hope for from home hospitalization programs,” according to a recent Health Affairs piece that simplifies many of the issues, such as top-down and bottom-up payment approaches and transformation challenges of which include diagnostics, monitoring, pharmaceuticals, and nursing services among many.
Regardless, changes to hospital operations in the coming year may be inevitable as a result of cost and payer pressures. In the meantime, patient cohorts appear to be a starting point for moving lab to home and potentially stopping the bleeding.
In Arizona, Sonora Quest Laboratories announced an “exclusive service” that is targeted to those living with chronic conditions and cognitive decline. Collaborating with remote healthcare service provider Getlabs in Los Angeles (for blood sample collection services) and Raleigh, NC-based uMETHOD (a precision medicine care plan provider), the service provides on-demand home lab collection, diagnostics, and individualized assessments to help slow early-stage progression of cognitive decline.
The Sonora Quest-Getlabs-uMethod triad is just one example of mobile and remote clinical laboratory services at work in various parts of the country, as The Dark Report recently explained. In a pilot trial of at-home phlebotomy services, laboratory order completion rates for patients jumped up 22.5%—this is significant because many factors can lead patients to discontinue lab orders, such a driving distances, time wasted sitting in a lab’s waiting room, or the inability to travel.
All of these moves describe strategic actions healthcare providers are taking to make existing and new services more accessible and possibly more efficient. Demand for shifting from traditional to nontraditional sites for care will continue to confront clinical labs and anatomic pathology groups with both opportunities and dilemmas. Forward-looking hospital, health system, and reference lab leaders will leverage logistics technologies.
Damages sought include reimbursement of costs for voided clinical laboratory tests as well as an injunction ‘to prevent Theranos and Walgreens from engaging in further misrepresentations and unfair conduct’
Theranos founder and ex-CEO Elizabeth Holmes and ex-COO/President Ramesh “Sunny” Balwani have been found guilty on multiple counts of fraud and now await sentencing in federal criminal court. But the pair’s legal entanglements are not yet over. A class-action lawsuit filed on behalf of patients who purchased Theranos clinical laboratory testing services between November 2013 and June 2016 is weaving its way through the legal system.
“The lawsuit claims, among other things, that these blood testing services were not capable of producing reliable results, that the defendants concealed the blood testing services’ unreliability, that Walgreens knew that the blood testing services were unreliable and not market-ready, that the defendants conspired to commit fraud on consumers, that Theranos’ ‘tiny’ blood testing technology (blood drawn with finger pricks) was still in development, and that the customers who were subject to ‘tiny’ Theranos blood draws by Walgreens employees gave their consent to those blood draws under false pretenses,” the news release notes.
If the defendants are found liable, plaintiffs, who could number in the hundreds of thousands, could receive money or benefits. The Mercury News reported that Arizona’s attorney general had identified 175,000 consumers who purchased tests from Theranos/Walgreens at an average cost of $60 per test.
A class-action lawsuit filed on behalf of patients who purchased Theranos blood testing services at a Walgreens or Theranos location includes as defendants company founder/CEO Elizabeth Holmes (left), ex-Theranos President/COO Ramesh “Sunny” Balwani (right), as well as Theranos, Inc., Walgreens Boots Alliance, and Walgreens Arizona Drug Company. The trial is expected to begin in 2023. It will no doubt draw the attention of clinical laboratory directors and pathologists who followed the Holmes/Balwani fraud cases very closely. (Photo copyright: The Wall Street Journal.)
Federal Court Upholds Class Certification
The Top Class Actions news site notes that in 2021 Walgreens and Balwani unsuccessfully appealed to get the class-action lawsuit against them decertified.
Class: All purchasers of Theranos testing services, including consumers who paid out-of-pocket, through health insurance, or through any other collateral source between November 2013 and June 2016.
Arizona Subclass: All purchasers of Theranos testing services in Arizona between November 2013 and June 2016.
California Subclass: All purchasers of Theranos testing services in California, between September 2013 and June 2016.
Walgreens Edison Subclass: All purchasers of Theranos testing services who were subjected to “tiny” blood draws (finger pricks) by a Walgreens employee between November 2013 and March 2015.
“The lawsuit seeks damages, including reimbursement of the amounts paid by consumers for the voided tests, as well as an injunction to prevent Theranos and Walgreens from engaging in further misrepresentations and unfair conduct,” the Lieff Cabraser website states.
In its notice to potential members of the class action, JND Legal Administration states the “defendants contend that they did not do anything wrong, and they are not liable for any harm alleged by the plaintiffs.” In addition, the notice points out, “There is no money available now, and there is no guarantee that there will be.”
Where could money come from to pay plaintiffs? Likely not from Theranos or Holmes. Though Theranos reached a peak valuation of $9 billion in 2014, it owed at least $60 million to unsecured creditors when the company was dissolved in 2018, USA Today reported. After turning over its assets and intellectual property, Theranos anticipated having only $5 million to distribute to creditors.
And Forbes reported that Holmes’ net worth dropped from $3.6 billion to $0 in 2016.
However, Balwani, who netted nearly $40 million in 2000 when he sold shares of software company Commerce One, has an estimated net worth of $90 million, according to Wealthypipo. As of 2022, Walgreens Boots Alliance is ranked number 18 on the Fortune 500 rankings of the largest United States corporations by total revenue.
The Arizona Theranos Litigation website points out that the suit does not seek damages or other relief for personal injury, emotional distress, retesting costs, or medical care costs. Any Theranos/Walgreens customer intent on pursuing such legal action would need to exclude themselves from the class action case and proceed with separate litigation. The deadline to opt out of the class-action lawsuit is September 12, 2022.
And so, though clinical laboratory directors and pathologists may have thought the saga of Theranos ended following Balwani’s conviction, it apparently continues. It is anyone’s guess what is to come.
Healthcare industry watchdog Group Leapfrog says that if CMS suppresses the data “all of us will be in the dark on which hospitals put us most at risk”
For some time, hospitals and clinical laboratories have struggled with transparency regulation when it comes to patient outcomes, test prices, and costs. So, it is perplexing that while that Centers for Medicare and Medicaid Services (CMS) pushes for more transparency in the cost of hospital care and quality, the federal agency also sought to limit public knowledge of 10 types of medical and surgical harm that occurred in hospitals during the COVID-19 pandemic.
And even though the CMS announced in its August 1 final rule (CMS-1771-F) that it was “pausing” its plans to suppress data relating to 10 measures that make up the Patient Safety and Adverse Events Composite (PSI 90), a part of the Hospital-Acquired Condition (HAC) Reduction Program, it is valuable for hospital and medical laboratory leaders to understand what the federal agency was seeking to accomplish.
According to USA Today, medical complications at hospitals such as pressure ulcers and falls leading to fractures would be suppressed in reports starting next year. Additionally, CMS “also would halt a program to dock the pay of the worst performers on a list of safety measures, pausing a years-long effort that links hospitals’ skill in preventing such complications to reimbursement,” Kaiser Health News reported.
The proposed rule’s executive summary reads in part, “Due to the impact of the COVID-19 PHE on measure data used in our value-based purchasing (VBP) programs, we are proposing to suppress several measures in the Hospital VBP Program and HAC Reduction Program … If finalized as proposed, for the FY 2023 program year, hospitals participating in the HAC Reduction Program will not be given a measure score, a Total HAC score, nor will hospitals receive a payment penalty.”
In a fact sheet, CMS noted that its intent in proposing the rule was neither to reward nor penalize providers at a time when they were dealing with the SARS-CoV-2 outbreak, new safety protocols for staff and patients, and an unprecedented rise in inpatient cases.
“We want the public to have complete trust in the data and will only be providing data we have determined has a high confidence of credibility and accuracy,” said CMS Chief Medical Officer Lee Fleisher, MD (above), Director of the CMS Center for Clinical Standards and Quality in a statement, Axios reported. Clinical laboratory leaders would find it more difficult to compare the performance of their hospitals against peer hospitals, should this proposed rule take effect as written. (Photo copyright: Lee Fleisher.)
Groups Opposed to the CMS Proposal
Like healthcare costs, quality data need to be accessible to the public, according to a health insurance industry representative. “Cost data, in the absence of quality data, are at best meaningless, and at worst, harmful. We see this limitation on collection and publication of data about these very serious safety issues as a step backward,” Robert Andrews, JD, CEO, Health Transformation Alliance, told Fortune.
The Leapfrog Group, a Washington, DC-based non-profit watchdog organization focused on healthcare quality and safety, urged CMS to reverse the proposal. The organization said on its website that it had collected 270 signatures on letters to CMS.
“Dangerous complications, such as sepsis, kidney harm, deep bedsores, and lung collapse, are largely preventable yet kill 25,000 people a year and harm 94,000,” wrote the Leapfrog Group in a statement. “Data on these complications is not available to the public from any other source. If CMS suppresses this data, all of us will be in the dark on which hospitals put us most at risk.”
Leah Binder, Leapfrog President/CEO, told MedPage Today she is concerned the suppression of public reporting of safety data may continue “indefinitely” because CMS does not want “to make hospitals unhappy with them.”
AHA Voices Support
Meanwhile, the American Hospital Association noted that the CMS “has made this proposal to forgo calculating certain hospital bonuses and penalties due to the impact of the pandemic,” Healthcare Dive reported.
“We agree with CMS that it would be unfair to base hospital incentives and penalties on data that have been skewed by the unprecedented impacts of the pandemic,” said Akin Demehin, AHA Senior Director, Quality and Safety Policy, in a statement to Healthcare Dive.
Though CMS’ plans to limit public knowledge of medical and surgical complications have been put on hold, medical laboratory leaders will want to stay abreast of CMS’ next steps with this final rule. Suppression of hospital harm during a period of increased demand for hospital transparency could trigger a backlash with healthcare consumers.
