Though the cost of clinical laboratory testing is not highlighted in KFF’s annual survey, it is a component in how much employers pay for healthcare plans for their employees
Employers now pay higher health insurance premiums than ever for family coverage. However, because of the current tight labor market, they are generally absorbing much of that increase rather than passing the higher costs on to their workers. That’s one key takeaway from KFF’s 26th annual Employer Health Benefits Survey, which the non-profit published on Oct. 9, 2024. While the report does not comment specifically about the cost of clinical laboratory testing or genetic testing and how they may contribute to rising insurance costs, it stands to reason they are part of growing healthcare costs for corporate health benefits.
The KFF survey found that premiums for family coverage increased 7% in 2024, reaching an average of $25,572. That follows a 7% increase in 2023. “Over the past five years—a period of high inflation (23%) and wage growth (28%)—the cumulative increase in premiums has been similar (24%),” KFF stated in a press release.
However, the amount paid by workers has gone up by less than $300 since 2019. It now stands at an average of $6,296, a total increase of 5% over five years. On average, workers covered 25% of family premium costs in 2024, down from 29% in 2023. Workers with single coverage paid an average of $1,368—16% of the annual premium cost—compared with 17% in 2023.
“Employers are shelling out the equivalent of buying an economy car for every worker every year to pay for family coverage,” KFF President and CEO Drew Altman, PhD (above), said in a press release. “In the tight labor market in recent years, they have not been able to continue offloading costs onto workers who are already struggling with healthcare bills.” Rising costs of clinical laboratory testing is always part of the mix contributing to increased worker insurance premiums for employers. (Photo copyright: KFF.)
HDHP/SO plans, as defined by KFF, “have a deductible of at least $1,000 for single coverage and $2,000 for family coverage and are offered with an HRA [Health Reimbursement Arrangement] or are HSA [health savings account]-qualified.” Point-of-service plans “have lower cost sharing for in-network provider services and do not require a primary care gatekeeper to screen for specialist and hospital visits,” the report states.
Cost Sharing via Deductibles
Average deductible amounts—which KFF identified as another form of cost-sharing—varied depending on the type of plan, employer size, and whether the worker had family or single coverage.
For workers with single coverage, average deductibles across all plan types rose from $1,655 in 2019 to $1,787 in 2024, a total five-year increase of about 8%. The average in 2023 was $1,735. These numbers were for in-network providers.
The report noted that some family plans calculate deductibles using an aggregate structure, “in which all family members’ out-of-pocket expenses count toward the deductible,” whereas others use a separate per-person structure. The report includes breakdowns of average deductibles across all types.
Who Offers the Best Benefits?
In general, the KFF report found that large companies—defined as those with 200 or more workers—tend to offer more generous health benefits than smaller ones. Virtually all large companies (98%) offered health benefits, while slightly more than half of small companies (53%) do so.
Among companies that do offer health benefits, the average deductible at a small firm was $2,575 compared to $1,538 at large firms. Among workers with family coverage, the average contribution toward overall premium costs was $7,947 (33%) at small firms compared to $5,697 (23%) at large firms. Among workers with single coverage, the numbers were $1,429 (16%) at small firms compared to $1,204 (14%) at large firms.
The report also found variations in overall premiums and health benefits across nine different industries. For example, healthcare firms paid the highest premiums for family coverage—an average of $26,864—followed by transportation/communications/utilities at $26,601. Companies in agriculture, mining, and construction paid the lowest premiums, an average of $22,654.
There were wide variations by industry in terms of how many firms offer any health benefits. Among state and local government entities, 83% offered health benefits, followed by transportation/communications/utilities (69%), manufacturing (65%), wholesale (62%), healthcare (58%), and finance (56%). Just 40% of retail businesses and 49% of agriculture/mining/construction businesses offered health benefits.
Health Screening Coverage
The KFF report did not include data about insurance coverage for clinical laboratory services. However, one section did address employer willingness to provide opportunities for health screening.
Among large businesses, 56% offered health risk assessments, in which individuals answer questions about their medical history, lifestyle, and other areas relevant to their health risks. A smaller number (44%) offer biometric screening, which “could include meeting a target body mass index (BMI) or cholesterol level, but not goals related to smoking,” the report said. Only 9% of small businesses offered biometric screening, the report found.
KFF conducted its survey between January and July 2024 among a random selection of public and private employers with at least three workers. The survey excluded federal government entities but included state and local government. A total of 2,142 employers responded.
Inflation during this current administration definitely hit consumers in the health insurance premium pocketbook. At the same time providers raised their own prices making it more expensive for people with HDHPs to come up with the cash required by their annual deductible. While clinical laboratory and genetic testing are not highlighted in KFF’s survey, they certainly play a role in increasing costs to healthcare consumers and are worth considering.
New clinical laboratory test could replace conventional spinal tap for diagnosing neurodegenerative disease
In a proof-of-concept study, University of Pittsburgh (Pitt) scientists validated a clinical laboratory test that measures more than 100 different genetic sequences associated with Alzheimer’s disease. The Pitt researchers believe the new diagnostic platform could help clinicians “capture the multifaceted nature of Alzheimer’s pathology and streamline early disease diagnostics,” according to a news release.
Clinical laboratory blood tests that detect biomarkers such as phosphorylated tau protein (pTau) have emerged in studies as diagnostic possibilities for Alzheimer’s disease, which is traditionally diagnosed using a lumbar puncture (spinal tap) procedure.
In their paper, neuroscientist Thomas Karikari, PhD, Assistant Professor of Psychiatry at University of Pittsburgh, lead author of the study, and his research team acknowledged that progress has been made in detecting Alzheimer’s disease with blood-based biomarkers. However, they note that “two key obstacles remain: the lack of methods for multi-analyte assessments and the need for biomarkers for related pathophysiological processes like neuroinflammation, vascular, and synaptic dysfunction.”
The Pitt scientists believe the focus on so-called “classical Alzheimer’s blood biomarkers” limits exploration of neurodegenerative disease.
“Alzheimer’s disease should not be looked at through one single lens. Capturing aspects of Alzheimer’s pathology in a panel of clinically validated biomarkers would increase the likelihood of stopping the disease before any cognitive symptoms emerge,” said neuroscientist Thomas Karikari, PhD (above), Assistant Professor of Psychiatry, University of Pittsburgh, and lead author of the study in a news release. Should further studies prove Pitt’s research sound, clinical laboratories may have a replacement test for diagnosing neurodegenerative disease. (Photo copyright: University of Pittsburgh.)
On its website, Alamar Biosciences explains that the disease panel offers neurological researchers:
“Multiplexed analysis of 120 neuro-specific and inflammatory proteins from 10 µl of plasma or CSF (cerebrospinal fluid).
Detection of “critical biomarkers—including pTau-217, GFAP (glial fibrillary acidic protein), NEFL (neurofilament light polypeptide) and alpha-synuclein.”
The NULISAseq test works with “a proprietary sequential immunocomplex capture and release mechanism and the latest advances in next-generation sequencing,” according to the company.
Inside Precision Medicine noted that the Alamar Biosciences assay enabled Pitt scientists to detect:
Biomarkers (usually found in CSF) “correlating with patients’ amyloid positivity status and changes in amyloid burden over time,” and,
Biomarkers including “neuroinflammation, synaptic function, and vascular health, which had not previously been validated in blood samples.”
“The performance of the NULISA platform was independently validated against conventional assays for classic Alzheimer’s biomarkers for each sample. Biomarker profiles over two years were also compared with imaging-based measures of amyloid, tau, and neurodegeneration,” LabMedica reported.
Opportunity to Track Alzheimer’s
Karikari sees the diagnostic platform being used to track individuals’ blood biomarker changes over time.
In their Molecular Neurodegeneration paper, the Pitt researchers wrote, “These (results) were not limited to markers such as pTau217, p-Tau231, p-Tau181, and GFAP, the elevation of which have consistently shown strong associations with brain Aβ [amyloid beta] and/or tau load, but included novel protein targets that inform about the disease state of the individual in different pathological stages across the biological Alzheimer’s disease continuum.”
About seven million Americans are affected by Alzheimer’s disease, according to the Alzheimer’s Association, which estimated that figure will grow to 13 billion by 2050.
Further studies by Karikari may include larger samples and greater diversity among the people studied, Inside Precision Medicine noted.
“[Karikari’s] lab is developing a predictive model that correlates biomarker changes detected using NULISAseq with brain autopsy data and cognitive assessments collected over the course of several years. Their goal is to identify blood biomarkers that can help stage the disease and predict its progression, both for decision-making around clinical management and treatment plans,” the Pitt news release states.
The Pitt scientists have developed a multiplex test that works with 100 different genetic sequences associated with Alzheimer’s. Such advances in the understanding of the human genome are giving scientists the opportunity to combine newly identified gene sequences that have a role in specific disease states.
In turn, as further studies validate the value of these biomarkers for diagnosing disease and guiding treatment decisions, clinical laboratories will have new assays that deliver more value to referring physicians and their patients.
Clinical laboratory executives and pathology leaders may want to develop strategies for supporting the growing numbers of at-home screening and diagnostic test users
Findings of a national poll conducted by the University of Michigan (U-M) exploring consumers’ purchases suggests seniors are becoming more comfortable with ordering and using at-home medical testing. Their choice of tests and opinions may be of interest to clinical laboratory executives, pathologists, and primary care physicians considering programs to support self-test purchasers.
The researchers found that 48% of adults, ages 50 to 80, purchased at least one at-home medical test, and that 91% of the buyers indicated intentions to purchase another test in the future, according to a U-M news release.
In their paper, they note that “validity, reliability, and utility of at-home tests is often uncertain.” Further, understanding and responding to test results—especially since caregivers may not have ordered them—could lead to “a range of unintended consequences,” they wrote.
“As a primary care doctor, I would want to know why my patient chose to take an at-home test that I didn’t order for them. We also need to understand in greater detail why folks use at-home tests instead of traditional means, beyond convenience,” said the U-M study’s lead author Joshua Rager, MD, a research scientist at William M. Tierney Center for Health Services Research at Regenstrief Institute, who is now an assistant professor of medicine, Indiana University, in a news release. The findings of the U-M study will be of interest to clinical laboratory executives and pathology leaders. (Photo copyright: Regenstrief Institute.)
Free COVID-19 Tests Ignite At-Home Testing
In their Journal of Health Care paper, the U-M researchers speculate that curiosity in at-home testing may have been propelled by the offer of free COVID-19 tests by the US government starting in 2021 during the pandemic.
They also noted the different ways at-home test kits are performed by healthcare consumers. Some, such as COVID-19 rapid antigen tests, return results to users in a few moments similar to pregnancy tests. Others involve self-collecting specimens, such as a stool sample, then sending the specimen to a clinical laboratory for analysis and results reporting to physicians.
Of those older adults who participated in U-M’s National Poll on Healthy Aging study, the following bought at-home medical tests online or from pharmacies and supermarkets, according to U-M’s paper:
As to perceptions of at-home medical testing by users, when polled on their test experience, the surveyed seniors reported the following:
75.1% perceived at-home medical tests to be more convenient than conventional medical tests.
59.9% believe the tests “can be trusted to give reliable results.”
54.8% believe the tests “are regulated by government.”
66% called them a “good value.”
93.6% indicated results “should be discussed with my doctor.”
Inconsistency in how people shared test results with their healthcare providers was a concern voiced by the researchers.
“While nearly all patients who had bought an at-home cancer screening test shared the results with their primary care provider, only about half of those who tested for an infection other than COVID-19 had. This could have important clinical implications,” the researchers wrote in their paper.
Confusion over Government Regulation
The U-M study also revealed consumer misunderstanding about government regulation of at-home clinical laboratory tests purchased over-the-counter.
The US Food and Drug Administration (FDA) cleared “some diagnostic at-home tests for over-the counter use. But many tests on the market are unregulated or under-regulated,” the authors wrote, adding, “Our results suggest, however, that patients generally believe at-home tests are regulated by government, but a substantial minority did not, which may reflect public confusion in how at-home testing is regulated.”
Women, College-Educated Buy More At-Home Tests
Purchase of at-home tests varies among groups, as follows, the news release noted:
56% and 61% of older adults with a college degree or household income above $100,000, respectively, were “much more likely” to buy at-home tests than people in other income and education brackets.
87% of women would buy at-home tests again compared with 76% of men.
89% of college-educated people would purchase the tests again, compared with 78% of people with high school educations or less.
Future U-M research may explore consumers’ awareness/understanding concerning federal regulations of at-home testing, Rager noted.
“At-home tests could be used to address disparities in access to care. We hope these findings will inform regulators and policymakers and spark future research on this topic,” he said in the news release.
The U-M Institute for Healthcare Policy and Innovation survey results confirm that the country’s senior generations are becoming comfortable with at-home and self-testing options. As Dark Daily has previously suggested, clinical laboratories may want to develop service offerings and a strategy for supporting patients who want to perform their own lab tests at home.
Though PCR clinical laboratory testing is widely used, some scientists are concerned its specificity may limit the ability to identify all variants of bird flu in wastewater
Wastewater testing of infectious agents appears to be here to stay. At the same time, there are differences of opinion about which methodologies and clinical laboratory tests are best suited to screen for specific contagions in wastewater. One such contagion is avian influenza, the virus that causes bird flu.
Wastewater testing by public health officials became a valuable tool during the COVID-19 pandemic and has now become a common method for detecting other diseases as well. For example, earlier this year, scientists used wastewater testing to learn how the H5N1 variant of the bird flu virus was advancing among dairy herds across the country.
In late March, the bird flu was first detected in dairy cattle in Texas, prompting scientists to begin examining wastewater samples to track the virus. Some researchers, however, expressed concerns about the ability of sewage test assays to detect all variants of certain diseases.
“Right now we are using these sort of broad tests to test for influenza A viruses,” Denis Nash, PhD, Distinguished Professor of Epidemiology at City University of New York (CUNY) and Executive Director of CUNY’s Institute for Implementation Science in Population Health (SPH), told the Los Angeles Times. “It’s possible there are some locations around the country where the primers being used in these tests might not work for H5N1.” Clinical laboratory PCR genetic testing is most commonly used to screen for viruses in wastewater. (Photo copyright: CUNY SPH.)
Effectiveness of PCR Wastewater Testing
Polymerase chain reaction (PCR) tests are most commonly used to distinguish genetic material related to a specific illness such as the flu virus. For PCR tests to correctly identify a virus, the tests must be designed to look for a specific subtype. The two most prevalent human influenza A viruses are known as H1N1 (swine flu) and H3N2, which was responsible for the 1968 pandemic that killed a million people worldwide. The “H” stands for hemagglutinin and the “N” for neuraminidase.
Hemagglutinin is a glycoprotein that assists the virus to attach to and infect host cells. Neuraminidase is an enzyme found in many pathogenic or symbiotic microorganisms that separates the links between neuraminic acids in various molecules.
Avian flu is also an influenza A virus, but it has the subtype H5N1. Although human and bird flu viruses both contain the N1 signal, they do not share an H. Some scientists fear that—in cases where a PCR test only looks for H1 and H3 in wastewater—that test could miss the bird flu altogether.
“We don’t have any evidence of that. It does seem like we’re at a broad enough level that we don’t have any evidence that we would not pick up H5,” Jonathan Yoder, Deputy Director, Infectious Disease Readiness and Innovation at the US Centers for Disease Control and Prevention (CDC) told the Los Angeles Times.
The CDC asserts current genetic testing methods are standardized and will detect the bird flu. Yoder also affirmed the tests being used at all the testing sites are the same assay, based on information the CDC has published regarding testing for influenza A viruses.
Genetic Sequencing Finds H5N1 in Texas Wastewater
In an article published on the preprint server medRxiv titled, “Virome Sequencing Identifies H5N1 Avian Influenza in Wastewater from Nine Cities,” the authors wrote, “using an agnostic, hybrid-capture sequencing approach, we report the detection of H5N1 in wastewater in nine Texas cities, with a total catchment area population in the millions, over a two-month period from March 4th to April 25th, 2024.”
The authors added, “Although human to human transmission is rare, infection has been fatal in nearly half of patients who have contracted the virus in past outbreaks. The increasing presence of the virus in domesticated animals raises substantial concerns that viral adaptation to immunologically naïve humans may result in the next flu pandemic.”
“So, it’s not just targeting one virus—or one of several viruses—as one does with PCR testing,” Eric Boerwinkle, PhD, Dean of the UTHealth Houston School of Public Health told the LA Times. “We’re actually in a very complex mixture, which is wastewater, pulling down viruses and sequencing them. What’s critical here is it’s very specific to H5N1.”
Epidemiologist Blake Hanson, PhD, Assistant Professor, Department of Epidemiology, Human Genetics, and Environmental Sciences at the UT Health Houston Graduate School of Biomedical Science, agreed with Boerwinkle that though the PCR-based methodology is highly effective at detecting avian flu in wastewater samples, the testing can do more.
“We have the ability to look at the representation of the entire genome, not just a marker component of it. And so that has allowed us to look at H5N1, differentiate it from some of our seasonal fluids like H1N1 and H3N2,” Hanson told the LA Times. “It’s what gave us high confidence that it is entirely H5N1, whereas the other papers are using a part of the H5 gene as a marker for H5.”
Human or Animal Sources
Both Boerwinkle and Hanson are epidemiologists in the team studying wastewater samples for H5N1 in Texas. They are not sure where the virus originated but are fairly certain it did not come from humans.
“Texas is really a confluence of a couple of different flyways for migratory birds, and Texas is also an agricultural state, despite having quite large cities,” Boerwinkle noted. “It’s probably correct that if you had to put your dime and gamble what was happening, it’s probably coming from not just one source but from multiple sources. We have no reason to think that one source is more likely any one of those things.”
“Because we are looking at the entirety of the genome, when we look at the single human H5N1 case, the genomic sequence has a hallmark amino acid change, compared to all of the cattle from that same time point,” Hanson said. “We do not see that hallmark amino acid present in any of our sequencing data. And we’ve looked very carefully for that, which gives us some confidence that we’re not seeing human-human transmission.”
CDC Updates on Bird Flu
In its weekly updates on the bird flu situation, the CDC reported that 48 states have outbreaks in poultry and 14 states have avian flu outbreaks in dairy cows. More than 238 dairy herds have been affected and, as of September 20, over 100 million poultry have been affected by the disease.
In addition, the CDC monitored more than 4,900 people who came into contact with an infected animal. Though about 230 of those individuals have been tested for the disease, there have only been a total of 14 reported human cases in the US.
The CDC posts information specifically for laboratory workers, healthcare providers, and veterinarians on its website.
The CDC also states that the threat from avian flu to the general public is low. Individuals at an increased risk for infection include people who work around infected animals and those who consume products containing raw, unpasteurized cow’s milk.
Symptoms of H5N1 in humans may include fever or chills, cough, headaches, muscle or body aches, runny or stuffy nose, tiredness and shortness of breath. Symptoms typically surface two to eight days after exposure.
Scientists and researchers have been seeking a reliable clinical laboratory test for disease organisms in a fast, accurate, and cost-effective manner. Wastewater testing of infectious agents could fulfill those goals and appears to be a technology that will continue to be used for tracking disease.
Though not biomarkers per se, these scores for certain genetic traits may someday be used by clinical laboratories to identify individuals’ risk for specific diseases
Can polygenic risk scores (a number that denotes a person’s genetic predisposition for certain traits) do a better job at predicting the likelihood of developing specific diseases, perhaps even before the onset of symptoms? Researchers at the Broad Institute of MIT and Harvard (Broad Institute) believe so, and their study could have implications for clinical laboratories nationwide.
In cooperation with medical centers across the US, the scientists “optimized 10 polygenic scores for use in clinical research as part of a study on how to implement genetic risk prediction for patients,” according to a Broad Institute news release.
The research team “selected, optimized, and validated the tests for 10 common diseases [selected from a total of 23 conditions], including heart disease, breast cancer, and type 2 diabetes. They also calibrated the tests for use in people with non-European ancestries,” the news release notes.
As these markers for genetic risk become better understood they may work their way into clinical practice. This could mean clinical laboratories will have a role in sequencing patients’ DNA to provide physicians with information about the probability of a patient’s elevated genetic risk for certain conditions.
However, the effectiveness of polygenic risk scores has faced challenges among diverse populations, according to the news release, which also noted a need to appropriately guide clinicians in use of the scores.
“With this work, we’ve taken the first steps toward showing the potential strength and power of these scores across a diverse population,” said Niall Lennon, PhD (above), Chief Scientific Officer of Broad Clinical Labs. “We hope in the future this kind of information can be used in preventive medicine to help people take actions that lower their risk of disease.” Clinical laboratories may eventually be tasked with performing DNA sequencing to determine potential genetic risk for certain diseases. (Photo copyright: Broad Institute.)
Polygenic Scores Need to Reflect Diversity
“There have been a lot of ongoing conversations and debates about polygenic risk scores and their utility and applicability in the clinical setting,” said Niall Lennon, PhD, Chair and Chief Scientific Officer of Broad Clinical Labs and first author of the study, in the news release. However, he added, “It was important that we weren’t giving people results that they couldn’t do anything about.”
In the paper, Lennon and colleagues explained polygenic risk scores “aggregate the effects of many genetic risk variants” to identify a person’s genetic predisposition for a certain disease or phenotype.
“But their development and application to clinical care, particularly among ancestrally diverse individuals, present substantial challenges,” they noted. “Clinical use of polygenic risk scores may ultimately prevent disease or enable its detection at earlier, more treatable stages.”
The scientists set a research goal to “optimize polygenic risk scores for a diversity of people.”
While performing the polygenic risk score testing on participants, Broad Clinical Labs focused on 10 conditions—including cardiometabolic diseases and cancer—selected by the research team based on “polygenic risk score performance, medical actionability, and clinical utility,” the Nature Medicine paper explained.
For each condition, the researchers:
Identified “exact spots in the genome that they would analyze to calculate the risk score.”
Used information from the NIH’s All of Us Research Program to “create a model to calibrate a person’s polygenic risk score according to that individual’s genetic ancestry.”
The All of Us program, which aims to collect health information from one million US residents, has three times more people of non-European ancestry than other data sources developing genetic risk scores, HealthDay News reported.
20% of Study Participants Showed High Risk for Disease
To complete their studies, Broad Institute researchers processed a diverse group of eMERGE participants to determine their clinical polygenic risk scores for each of the 10 diseases between July 2022 and August 2023.
Listed below are all conditions studied, as well as the number of participants involved in each study and the number of people with scores indicating high risk of the disease, according to their published paper:
Over 500 people (about 20%) of the 2,500 participants, had high risk for at least one of the 10 targeted diseases, the study found.
Participants in the study self-reported their race/ancestry as follows, according to the paper:
White: 32.8%
Black: 32.8%
Hispanic: 25.4%
Asian: 5%
American Indian: 1.5%
Middle Eastern: 0.9%
No selection: 0.8%
“We can’t fix all biases in the risk scores, but we can make sure that if a person is in a high-risk group for a disease, they’ll get identified as high risk regardless of what their genetic ancestry is,” Lennon said.
Further Studies, Scoring Implications
With 10 tests in hand, Broad Clinical Labs plans to calculate risk scores for all 25,000 people in the eMERGE network. The researchers also aim to conduct follow-up studies to discover what role polygenic risk scores may play in patients’ overall healthcare.
“Ultimately, the network wants to know what it means for a person to receive information that says they’re at high risk for one of these diseases,” Lennon said.
The researchers’ findings about disease risk are likely also relevant to healthcare systems, which want care teams to make earlier, pre-symptomatic diagnosis to keep patients healthy.
Clinical laboratory leaders may want to follow Broad Clinical Labs’ studies as they perform the 10 genetic tests and capture information about what participants may be willing to do—based on risk scores—to lower their risk for deadly diseases.
Another report finds nearly half of all healthcare systems planning to opt out of Medicare Advantage plans because of issues caused by prior authorization requirements
Prior-authorization is common and neither healthcare providers (including clinical laboratories) nor Medicare Advantage (MA) health plans are happy with the basic process. Thus, labs—which often must get prior-authorization for molecular diagnostics and genetic tests—may learn from a recent KFF study of denial rates and successful appeals.
“While prior authorization has long been used to contain spending and prevent people from receiving unnecessary or low-value services, it also has been [the] subject of criticism that it may create barriers to receiving necessary care,” KFF, a health policy research organization, stated in a news release.
Nearly all MA plan enrollees have to get prior authorization for high cost services such as inpatient stays, skilled nursing care, and chemotherapy. However, “some lawmakers and others have raised concerns that prior authorization requirements and processes, including the use of artificial intelligence to review requests, impose barriers and delays to receiving necessary care,” KFF reported.
“Insurers argue the process helps to manage unnecessary utilization and lower healthcare costs. But providers say prior authorization is time-consuming and delays care for patients,” Healthcare Dive reported.
“There are a ton of barriers with prior authorizations and referrals. And there’s been a really big delay in care—then we spend a lot of hours and dollars to get paid what our contracts say,” said Katie Kucera (above),Vice President and CFO, Carson Tahoe Health, Carson City, Nev., in a Becker’s Hospital CFO Report which shared the health system’s plan to end participation in UnitedHealthcare commercial and Medicare Advantage plans effective May 2025. Clinical laboratories may want to review how test denials by Medicare Advantage plans, and the time cost of the appeals process, affect the services they provide to their provider clients. (Photo copyright: Carson Tahoe Health.)
Key Findings of KFF Study
To complete its study, KFF analyzed “data submitted by Medicare Advantage insurers to CMS to examine the number of prior authorization requests, denials, and appeals for 2019 through 2022, as well as differences across Medicare Advantage insurers in 2022,” according to a KFF issue brief.
Here are key findings:
Requests for prior authorization jumped 24.3% to 46 million in 2022 from 37 million in 2019.
More than 90%, or 42.7 million requests, were approved in full.
About 7.4%, or 3.4 million, prior authorization requests were fully or partially denied by insurers in 2022, up from 5.8% in 2021, 5.6% in 2020, and 5.7% in 2019.
About 9.9% of denials were appealed in 2022, up from 7.5% in 2019, but less than 10.2% in 2020 and 10.6% in 2021.
More than 80% of appeals resulted in partial or full overturning of denials in the years studied. Still, “negative effects on a person’s health may have resulted from delay,” KFF pointed out.
KFF also found that requests for prior authorization differed among insurers. For example:
Humana experienced the most requests for prior authorization.
Among all MA plans, the share of patients who appealed denied requests was small. The low rate of appeals may reflect Medicare Advantage plan members’ uncertainty that they can question insurers’ decisions, KFF noted.
It’s a big market. Nevertheless, “between onerous authorization requirements and high denial rates, healthcare systems are frustrated with Medicare Advantage,” according to a Healthcare Financial Management Association (HFMA) survey of 135 health system Chief Financial Officers.
According to the CFOs surveyed, 19% of healthcare systems stopped accepting one or more Medicare Advantage plans in 2023, and 61% are planning or considering ending participation in one or more plans within two years.
“Nearly half of health systems are considering dropping Medicare Advantage plans,” Becker’s reported.
Federal lawmakers acted, introducing three bills to help improve timeliness, transparency, and criteria used in prior authorization decision making. Starting in 2023, KFF reported, the federal Centers for Medicare and Medicaid Services (CMS) published final rules on the bills:
Rule One (effective June 5, 2023), “clarifies the criteria that may be used by Medicare Advantage plans in establishing prior authorization policies and the duration for which a prior authorization is valid. Specifically, the rule states that prior authorization may only be used to confirm a diagnosis and/or ensure that the requested service is medically necessary and that private insurers must follow the same criteria used by traditional Medicare. That is, Medicare Advantage prior authorization requirements cannot result in coverage that is more restrictive than traditional Medicare.”
Rule Two (effective April 8, 2024), is “intended to improve the use of electronic prior authorization processes, as well as the timeliness and transparency of decisions, and applies to Medicare Advantage and certain other insurers. Specifically, it shortens the standard time frame for insurers to respond to prior authorization requests from 14 to seven calendar days starting in January 2026 and standardizes the electronic exchange of information by specifying the prior authorization information that must be included in application programming interfaces starting in January 2027.”
Rule Three (effective June 3, 2024), requires “Medicare Advantage plans to evaluate the effect of prior authorization policies on people with certain social risk factors starting with plan year 2025.”
KFF’s report details how prior authorization affects patient care and how healthcare providers struggle to get paid for services rendered by Medicare Advantage plans amid the rise of value-based reimbursements.
Clinical laboratory leaders may want to analyze their test denials and appeals rates as well and, in partnership with finance colleagues, consider whether to continue contracts with Medicare Advantage health plans.
