Trifecta of forces at work that will affect the clinical laboratory and pathology industries have been described as a ‘perfect storm’ requiring lab and practice managers to be well informed
Digital pathology, artificial intelligence (AI) in healthcare, and the perfect storm of changing federal regulations, took centerstage at the 29th Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management in New Orleans this week, where more than 1,000 clinical laboratory and pathology leaders convened over three days.
This was the largest number of people ever onsite for what has become the world’s largest event focused exclusively on lab management topics and solutions. Perhaps the highlight of the week was the federal Food and Drug Administration’s (FDA’s) announcement of its final rule on Laboratory Developed Tests (LDTs). Overall, the conference featured more than 120 speakers, many of them national thought leaders on the topic of clinical lab and pathology management. More than 65% of the audience onsite were executive level lab managers.
“The level of interest in the annual Executive War College is testimony to the ongoing need for dynamic, engaging, and highly relevant conference events,” said Robert Michel (above), Editor-in-Chief of Dark Daily and its sister publication The Dark Report, and founder of the Executive War College. “These in-person gatherings present great opportunities for clinical laboratory and pathology managers and leaders to network and speak with people they otherwise might not meet.” (Photo copyright: Dark Intelligence Group.)
Demonstrating Clinical Value
For those who missed the action onsite, the following is a synopsis of the highlights this week.
Lâle White, Executive Chair and CEO of XiFin, spoke about the future of clinical laboratory testing and the factors reshaping the industry. There are multiple dynamics impacting healthcare economics and outcomes—namely rising costs, decreasing reimbursements, and the move to a more consumer-focused healthcare. But it is up to labs, she said, to ensure their services are not simply viewed as a commodity.
“Laboratory diagnostics have the potential to change the economics of healthcare by really gaining efficiencies,” she noted. “And it’s up to labs to demonstrate clinical value by helping physicians manage two key diagnostic decision points—what tests to order, and what to do with the results.”
But even as labs find ways to increase the value offered to clinicians, there are other disruptive factors in play. Consumer-oriented tech companies such as Google, Apple, and Amazon are democratizing access to patient data in unforeseen ways, and Medicare Advantage plans are changing the way claims are processed and paid.
Clinical labs are fundamental components of the public health infrastructure. So, the CDC plans on focusing on delivering high-quality laboratory science, supported by reliable diagnostics and informatics for disease outbreaks and exposures, and engaging with public and private sector partners.
The history of MolDX and Z-Codes were the topics discussed by Gabriel Bien-Willner, MD, PhD, Chief Medical Officer for healthcare claims and transaction processing company Palmetto GBA. Molecular testing is highly complex, and the lack of well-defined billing codes and standardization makes it difficult to know if a given test is reasonable and necessary.
Z-Codes were established to clarify what molecular testing was performed—and why—prompting payers to require both Z-Codes and Current Procedural Terminology (CPT) codes when processing molecular test claims. Medicare’s MolDX program further streamlines the claims process by utilizing expertise in the molecular diagnostics space to help payers develop coverage policies and reimbursement for these tests.
FDA Final Rule on LDT Regulation
Timothy Stenzel, MD, PhD, CEO of Grey Haven Consulting and former director of the FDA’s Office of In Vitro Diagnostics reviewed the latest updates from the FDA’s Final Rule on LDT (laboratory developed test) regulation. Prior to the FDA releasing its final rule, some experts suggested that the new regulations could result in up to 90% of labs discontinuing their LDT programs, impacting innovation, and patient care.
However, the final rule on LDTs is very different from the original proposed rule which created controversy. The final rule actually lowers the regulatory burden to the point that some labs may not have to submit their LDTs at all. The FDA is reviewing dozens of multi-cancer detection assays, some of which have launched clinically as LDTs. The agency is likely to approve those that accurately detect cancers for which there is no formal screening program.
Stenzel explained the FDA’s plan to down-classify most in vitro diagnostic tests, changing them from Class III to Class II, and exempting more than 1,000 assays from FDA review. He also discussed the highlights of the Quality Management System Regulation (QMSR). Launched in January, the QMSR bought FDA requirements in line with ISO 13485, making compliance easier for medical device manufacturers and test developers working internationally.
Looming Perfect Storm of Regulatory Changes
To close out Day 1, Michel took to the stage again with a warning to clinical laboratories about the looming “Perfect Storm” trifecta—the final FDA ruling on LDTs, Z-Code requirements for genetic testing, and updates to CLIA ’92 that could result in patient data being considered a specimen.
Laboratory leaders must think strategically if their labs are to survive the fallout, because the financial stress felt by labs in recent years will only be exacerbated by macroeconomic trends such as:
Staff shortages,
Rising costs,
Decreasing and delayed reimbursements, and
Tightening supply chains.
Lab administrators looking for ways to remain profitable and prosperous should look beyond the transactional Clinical Lab 1.0 fee-for-service model and adopt Clinical Lab 2.0, which embraces HEDIS (Healthcare Effectiveness Data and Information Set) scores and STAR ratings to offer more value to Medicare Advantage and other payers.
Wednesday’s General Session agenda was packed with information about the rise of artificial intelligence, big data, and precision medicine in healthcare. Taking centerstage on the program’s final day was Michael Simpson, President and CEO of Clinisys. Simpson gave a global perspective on healthcare data as the new driver of innovation in diagnostics and patient care.
At The Dark Report’s annual Lab Quality Confab for clinical laboratory administrators, managers, and quality team members, experts outline how disruption in healthcare requires labs to improve processes and cut costs
This is an opportunity for clinical laboratory directors,
pathologists, and other lab professionals, to comment on the proposed revisions
to CLIA before or during the upcoming CLIAC meeting on Nov. 6.
The agenda for the meeting is posted on the CDC’s website.
Public to be Heard on CLIA Regulations
“For the first time in its 26-year history, the council has
called for three workgroups to address how to revise CLIA,” Salerno said. The
workgroups will address these topics:
“It’s a dramatic step for the government to ask the
laboratory community how to revise the CLIA regulations,” Salerno commented.
Chartered in 1992, the advisory council meets twice a year, once in April and
once in November.
In the coming weeks, Dark Daily will publish more
information on how clinical laboratory professionals can comment on the
important issue of CLIA revisions.
Digital slides from Salerno’s keynote address are posted on LQC’s presentations website.
Clinical Laboratory Testing is Increasing in Value,
Keynote Speaker Says
As a service to clinical laboratories, Salerno outlined many
of the services the CDC’s Division of Laboratory Systems provides for free to
clinical labs, including information on such topics as:
During his remarks at the 13th Annual Lab Quality Confab in Atlanta, Salerno had good news for the clinical laboratory professionals in attendance. He said that lab testing was becoming a more valued commodity in healthcare because physicians and other providers were growing increasingly confident in lab test results. [Photo copyright: The Dark Report.]
Healthcare System Disruption Impacts Providers, Including
Clinical Laboratories
Other keynote speakers addressed how disruption in the US
healthcare systems affects provider organizations in significant ways. For
clinical laboratories, such disruption has resulted in reduced payment and
demands for quality improvement and shorter turnaround times.
For all these reasons, quality
management systems may be every clinical laboratory’s best strategy to
survive and thrive, the keynote speakers said.
The first keynoter was Robert L. Michel, Editor-in-Chief and Publisher of The Dark Report. Michel’s remarks focused on how price cuts from Medicare, Medicaid, private payers, and the drive for value-based payment, are requiring labs to do more with less. For this reason, quality management systems are necessary for all labs seeking to improve results, eliminate errors, and cut costs, he said.
“The people closest to the work know how to fix these
problems,” he added. “That’s why labs know they must train their staff to
identify problems and then report them up the chain so they can be fixed,”
Michel commented. “Labs that are best at listening to their employees are
getting very good at identifying problems by measuring results and monitoring
and reporting on their own performance.”
Michel identified three principle factors that are
disrupting healthcare:
The shift from reactive care in which the health system cares for sick patients to proactive care in which the health system aims to keep patients healthy and out of the hospital and other costly sites of care.
The transition away from fee-for-service payment that encourages providers to do more for patients, whether more care is needed or not, to value-based payment that aims to reward providers for keeping patients healthy.
The consolidation among hospitals, health systems, physicians, and other providers. A trend that requires clinical laboratories to find new partners and new ways to improve lab services and reduce costs.
Informatics Performance Data Help Clinical Laboratories
Respond to Change
“The attributes of new and successful labs are that they will have faster workflow and shorter cycle times for clinical lab tests and anatomic pathology specimen results,” Michel explained. “That means that labs will attack non-value-added processes by implementing continuous improvement strategies [such as Lean and Six Sigma] and by the sophisticated use of informatics.”
Making use of performance data enables clinical laboratory
directors to make changes in response to disruptions that affect healthcare.
“If you have good informatics, then seven or eight of every 10 decisions you
make will be good decisions, and with the other two and three decisions, you’ll
have time to pull back and adjust,” Michel commented.
The second keynote speaker, Jeremy Schubert, MBA, MPH, Division Vice President of Abbott, reiterated what Michel said about how the health system is moving away from fee-for-service payment. Instead of focusing on caring for sick patients exclusively, he said, health insurers are paying all healthcare providers to keep patients healthy.
“Healthcare today is about the whole life course of the
individual,” Schubert explained. “Patients no longer want healthcare only when
they’re sick. Instead, they want to be healthy. And health creation is not just
about a person’s physical health. It’s about their mental health, their
emotional health, and their social wellbeing.
“In fact,” he continued, “you can learn more about a
person’s health from their Zip code than from their genetic code.”
That is essentially what TriCore Reference Laboratories (TriCore) has been doing in New Mexico, Schubert added. During his presentation, Michel mentioned TriCore as being one of four clinical laboratories participating in Project Santa Fe, a non-profit organization that promotes the movement from Clinical Lab 1.0 to Clinical Lab 2.0. (See “TriCore Forges Ahead to Help Payers Manage Population Health,” The Dark Report, May 20, 2019.)
“If you want to be a quality engine in healthcare you have
to be operating at Lab 2.0. Who is best qualified to interpret information?
It’s the lab,” Schubert said. Then he challenged labs to begin pursuing the
goal of achieving Lab 3.0, saying “Lab 3.0 is being able to interface with the
patient to address each patient’s problems.”
The 13th Annual Lab Quality Confab (LQC) in Atlanta continues through the 17th with post-event workshops in Six Sigma and mastering quality management systems. In attendance are 300 clinical laboratory administrators, managers, and quality team members who are learning a complete array of professional training methods.
To register to attend, click here or enter https://www.labqualityconfab.com/register into your browser, or call 707-829-9485, or e-mail lqcreg@amcnetwork.com.
