Medical laboratories and anatomic pathologists may need to squeeze into narrow networks to be paid under value-based schemes, especially where Medicare Advantage is concerned
Pathologists have likely heard the arguments in favor of value-based payment versus fee-for-service (FFS) reimbursement models: FFS encourages providers to order medically unnecessary procedures and lab tests. FFS removes incentives for providers to order patient services more carefully. Fraudsters can generate huge volumes of FFS claims that take payers months/years to recognize and stop.
Studies that favor value-based payment schemes support these claims. But do hospitals and other healthcare providers also accept them? And how is value-based reimbursement really doing?
To find out, Chicago-based thought leadership and advisory company 4Sight Health culled data from various organizations’ reports that suggest value-based reimbursement shows signs of growth as well as signs of stagnation.
Value-Based Payment Has Its Ups and Downs
Healthcare journalist David Burda is News Editor and Columnist at 4Sight Health. In his article, “Is Value-Based Reimbursement Mostly Dead or Slightly Alive?” Burda commented on data from various industry reports that indicated value-based reimbursement shows “signs of life.” For example:
More doctors are accepting pay-for-performance payments: 44.5% in 2020, up from 42.3% in 2018, according to an American Medical Association (AMA) biennial report on physician participation in value-based reimbursement, titled, “Policy Research Perspectives: Payment and Delivery in 2020.”
On the other hand, Burda reported that value-based reimbursement also has these declining indicators:
39.3% of provider payments “flowed” through FFS plans in 2020 with no link to cost or quality. This was unchanged since 2019. (HCPLAN report)
19.8% of FFS payments to providers in 2020 were linked to cost or quality, down from 22.5% in 2019. (HCPLAN report)
88% of doctors reported accepting FFS payments in 2019, an increase from 87% in 2018. (AMA report)
Does Today’s Healthcare Industry Support Value-based Care?
A survey of 680 physicians conducted by the Deloitte Center for Health Solutions suggests the answer could be “not yet.” In “Equipping Physicians for Value-Based Care,” Deloitte reported:
“Physician compensation continues to emphasize volume more than value.
“Availability and use of data-driven tools to support physicians in practicing value-based care continue to lag.
“Existing care models do not support value-based care.”
Deloitte analysts wrote, “Physicians increasingly recognize their role in improving the affordability of care. We repeated a question we asked six years ago and saw a large increase in the proportion of physicians who say they have a prominent role in limiting the use of unnecessary treatments and tests: 76% in 2020 vs. 57% in 2014.
“Physicians also recognize that today’s care models are not geared toward value,” Deloitte continued. “They see many untapped opportunities for improving quality and efficiency. They estimate that even today, sizable portions of their work can be performed by nonphysicians (30%) in nontraditional settings (30%) and/or can be automated (18%), creating opportunities for multidisciplinary care teams and clinicians to work at the top of their license.”
Hospital CFOs Also See Opportunities for Value-based Care
This could be problematic for clinical laboratories, according to Robert Michel, Editor-in-Chief of Dark Daily and our sister publication The Dark Report. According to Guidehouse, “Nearly 60% of health systems plan to advance into risk-based Medicare Advantage models in 2022.”
Medicare Advantage (MA) enrollments have escalated over 10 years: 26.4 million people of the 62.7 million eligible for Medicare chose MA in 2021, noted a Kaiser Family Foundation brief that also noted MA enrollment in 2021 was up by 2.4 million beneficiaries or 10% over 2020.
The graph above is taken from the Kaiser Family Foundation report, “Medicare Advantage in 2021: Enrollment Update and Key Trends.” According to the KFF, “In 2021, more than four in 10 (42%) Medicare beneficiaries—26.4 million people out of 62.7 million Medicare beneficiaries overall—are enrolled in Medicare Advantage plans; this share has steadily increased over time since the early 2000s.” Since MA employs narrow networks for its healthcare providers, it’s likely this trend will continue to affect clinical laboratories that may find it difficult to access these providers. (Graphic copyright: Kaiser Family Foundation.)
“The shift from Medicare Part B—where any lab can bill Medicare on behalf of patients for doctor visits and outpatient care, including lab tests—to Medicare Advantage is a serious financial threat for smaller and regional labs that do a lot of Medicare Part B testing. The Medicare Advantage plans often have networks that exclude all but a handful of clinical laboratories as contracted providers,” Michel cautioned. “Moving into the future, it’s incumbent on regional and smaller clinical laboratories to develop value-added services that solve health plans’ pain points and encourage insurers to include local labs in their networks.”
Medical laboratories and anatomic pathology groups need to be aware of this trend. Michel says value-based care programs call on clinical laboratories to collaborate with healthcare partners toward goals of closing care gaps.
“Physicians and hospitals in a value-based environment need a different level of service and professional consultation from the lab and pathology group because they are being incented to detect disease earlier and be active in managing patients with chronic conditions to keep them healthy and out of the hospital,” he added.
Value-based reimbursement may eventually replace fee-for-service contracts. The change, however, is slow and clinical laboratories should monitor for opportunities and potential pitfalls the new payment arrangements might bring.
Group’s report also suggests that at-home clinical laboratory tests for COVID-19 that are difficult to use may lead to inaccurate results
At-home clinical laboratory tests for COVID-19 have become quite popular. But how accurate are they? Now, an independent safety organization has investigated COVID-19 rapid antigen tests to find out how easy—or not—they are to use and what that means for the accuracy of the tests’ results.
ECRI (Emergency Care Research Institute) of Plymouth Meeting, Penn., “conducted a usability evaluation to determine if there were any differences in ease of use for the rapid COVID-19 tests,” according to the company’s website.The nonprofit was founded in the 1960s by surgeon and inventor Joel J. Nobel to evaluate medical devices that have been approved by the U.S. Food and Drug Administration (FDA).
“Because of the urgency in providing useful information to consumers as quickly as possible, ECRI selected the seven test kits based on retail availability,” ECRI noted.
ECRI ranked the seven over-the-counter (OTC) at-home rapid antigen tests according to their SUS usability ratings. The System Usability Scale (SUS), invented by John Brooke in 1986, “rates products on a scale of 0 to 100 with 100 being the easiest to use. More than 30 points separated the top and bottom tests analyzed,” according to Managed Healthcare Executive.
Of the seven rapid antigen test kits for COVID-19, ECRI found “noteworthy usability concerns” and “significant differences in ease of use.” None of the tests achieved a SUS rating of “excellent,” ECRI stated in a press release.
“Our evaluation shows that some rapid [COVID-19] tests are much easier to use than others. If given options, consumers should choose tests that are the easiest to use because when a [COVID-19] test is difficult for a consumer to use, it may lead to an inaccurate result,” said ECRI President and CEO Marcus Schabacker, MD, PhD, in a news release. Marcus “is a board-certified anesthesiologist and intensive care specialist with more than 35 years of healthcare experience in complex global environments, and more than 20 years of senior leadership responsibilities serving the medical device and pharmaceutical industries across the healthcare value chain,” states ECRI. (Photo copyright: Biz Journals.)
Seven Rapid Antigen Tests for SARS-CoV-2 Evaluated
As clinical laboratory scientists and pathologists know, it’s possible for different test methodologies for the same biomarker to produce dissimilar results. Another factor affecting medical laboratory test accuracy is the variability from one manufacturing batch or lot to another. And, as the ECRI report suggests, how a specimen is collected and handled can affect accuracy, reliability, and reproducibility of the test results generated by that specimen.
These are the OTC COVID-19 rapid antigen tests ECRI evaluated and their SUS ratings:
Some tests, the ECRI analysts found, required “fine motor control” or were packed with written instructions ECRI determined were too small for older adults to read.
How ECRI Evaluated the COVID-19 Rapid Antigen Tests
SUS reviewers took each rapid test and completed questionnaires specifying their level of agreement (on a range of one to five) with these statements. (Edited by Dark Daily for space):
Desire to use
Perception of unnecessary complexity
Easy to use
Support of a technical person needed
Functions well-integrated
Too much system inconsistency
Easy to learn for most people
A very cumbersome system to use
Feeling of confidence in use
A need to learn before getting going
ECRI then used an algorithm to derive an aggregate score (from 0 to 100) for each test, the report noted.
“Based on the aggregate SUS scores, none of the COVID-19 test kits would be judged to have ‘excellent’ usability. The On/Go, CareStart, Flowflex test kits we rate as ‘very good’ as the usability score for these kits falls just short of ‘excellent,’” the report said.
Some of the positive responses ECRI received from the SUS participants included:
“One of the simpler tests to use with good, printed instructions,” (On/Go and CareStart).
“Cassette makes handling without touching test strip easy,” (CareStart and Flowflex).
“The QR (quick-response) code-linked instructional video is helpful, but probably not needed,” (QuickVue).
“Once the swab is inserted into the test card, the test seems less likely to be spilled or disturbed than other test kits,” (BinaxNOW).
Is it Time for Rapid COVID-19 Antigen Tests?
Unlike RT-PCR tests that can take hours or days to return results, rapid antigen tests provide a quick result that’s used for screening worldwide. And with the COVID-19 Omicron variant spreading rapidly around the world, speed is much needed, according to Stephen Kissler, PhD, Research Fellow in the department of immunology and infectious diseases at Harvard’s T.H. Chan School of Public Health.
“I think the rapid tests provide some of the best protection we have against the spread of disease, especially as we now have a variant on hand that’s going to be able to cause an awful lot of breakthrough infections,” Kissler told The Atlantic-Journal Constitution.
One way clinical laboratory leaders can help is to reach out in their local markets and provide information on the importance of appropriate sampling and collection for accurate results from rapid COVID-19 antigen testing.
Given the large number of mutations found in the SARS-CoV-2 Omicron variant, experts in South Africa speculate it likely evolved in someone with a compromised immune system
As the SARS-CoV-2 Omicron variant spreads around the United States and the rest of the world, infectious disease experts in South Africa have been investigating how the variant developed so many mutations. One hypothesis is that it evolved over time in the body of an immunosuppressed person, such as a cancer patient, transplant recipient, or someone with uncontrolled human immunodeficiency virus infection (HIV).
One interesting facet in the story of how the Omicron variant was being tracked as it emerged in South Africa is the role of several medical laboratories in the country that reported genetic sequences associated with Omicron. This allowed researchers in South Africa to more quickly identify the growing range of mutations found in different samples of the Omicron virus.
“Normally your immune system would kick a virus out fairly quickly, if fully functional,” Linda-Gail Bekker, PhD, of the Desmond Tutu Health Foundation (formerly the Desmond Tutu HIV Foundation) in Cape Town, South Africa, told the BBC.
“In someone where immunity is suppressed, then we see virus persisting,” she added. “And it doesn’t just sit around, it replicates. And as it replicates it undergoes potential mutations. And in somebody where immunity is suppressed that virus may be able to continue for many months—mutating as it goes.”
Multiple factors can suppress the immune system, experts say, but some are pointing to HIV as a possible culprit given the likelihood that the variant emerged in sub-Saharan Africa, which has a high population of people living with HIV.
Li “was among the first to detail extensive coronavirus mutations in an immunosuppressed patient,” the LA Times reported. “Under attack by HIV, their T cells are not providing vital support that the immune system’s B cells need to clear an infection.”
Linda-Gail Bekker, PhD (above), of the Desmond Tutu Health Foundation cautions that these findings should not further stigmatize people living with HIV. “It’s important to stress that people who are on anti-retroviral medication—that does restore their immunity,” she told the BBC. (Photo copyright: Test Positive Aware Network.)
Omicron Spreads Rapidly in the US
Genomics surveillance Data from the CDC’s SARS-CoV-2 Tracking system indicates that on Dec. 11, 2021, Omicron accounted for about 7% of the SARS-CoV-2 variants in circulation, the agency reported. But by Dec. 25, the number had jumped to nearly 60%. The data is based on sequencing of SARS-CoV-2 by the agency as well as commercial clinical laboratories and academic laboratories.
Experts have pointed to several likely factors behind the variant’s high rate of transmission. The biggest factor, NPR reported, appears to be the large number of mutations on the spike protein, which the virus uses to attach to human cells. This gives the virus an advantage in evading the body’s immune system, even in people who have been vaccinated.
“The playing field for the virus right now is quite different than it was in the early days,” Joshua Schiffer, MD, of the Fred Hutchinson Cancer Research Center, told NPR. “The majority of variants we’ve seen to date couldn’t survive in this immune environment.”
One study from Norway cited by NPR suggests that Omicron has a shorter incubation period than other variants, which would increase the transmission rate. And researchers have found that it multiplies more rapidly than the Delta variant in the upper respiratory tract, which could facilitate spread when people exhale.
Using Genomics Testing to Determine How Omicron Evolved
But how did the Omicron variant accumulate so many mutations? In a story for The Atlantic, virologist Jesse Bloom, PhD, Professor, Basic Sciences Division, at the Fred Hutchinson Cancer Research Center in Seattle, described Omicron as “a huge jump in evolution,” one that researchers expected to happen “over the span of four or five years.”
Hence the speculation that it evolved in an immunosuppressed person, perhaps due to HIV, though that’s not the only theory. Another is “that the virus infected animals of some kind, acquired lots of mutations as it spread among them, and then jumped back to people—a phenomenon known as reverse zoonosis,” New Scientist reported.
Still, experts are pointing to emergence in someone with a weakened immune system as the most likely cause. One of them, the L.A. Times reported, is Tulio de Oliveira, PhD, Affiliate Professor in the Department of Global Health at the University of Washington. Oliveira leads the Centre for Epidemic Response and Innovation at Stellenbosch University in South Africa, as well as the nation’s Network for Genomic Surveillance.
The Network for Genomic Surveillance, he told The New Yorker, consists of multiple facilities around the country. Team members noticed what he described as a “small uptick” in COVID cases in Gauteng, so on Nov. 19 they decided to step up genomic surveillance in the province. One private clinical laboratory in the network submitted “six genomes of a very mutated virus,” he said. “And, when we looked at the genomes, we got quite worried because they discovered a failure of one of the probes in the PCR testing.”
Looking at national data, the scientists saw that the same failure was on the rise in PCR (Polymerase chain reaction) tests, prompting a request for samples from other medical laboratories. “We got over a hundred samples from over thirty clinics in Gauteng, and we started genotyping, and we analyzed the mutation of the virus,” he told The New Yorker. “We linked all the data with the PCR dropout, the increase of cases in South Africa and of the positivity rate, and then we began to see it might be a very suddenly emerging variant.”
Oliveira’s team first reported the emergence of the new variant to the World Health Organization, on Nov. 24. Two days later, the WHO issued a statement that named the newly classified Omicron variant (B.1.1.529) a “SARS-CoV-2 Variant of Concern.”
Microbiologists and clinical laboratory specialists in the US should keep close watch on Omicron research coming out of South Africa. Fortunately, scientists today have tools to understand the genetic makeup of viruses that did not exist at the time of SARS 2003, Swine flu 2008/9, MERS 2013.
These findings hint at the role of pre-existing conditions in raising the risk of an individual having a severe case of COVID-19 once infected
At the University of Michigan, a team of pathologists have been researching the factors that might cause some patients infected by SARS-CoV-2 to suffer persistent respiratory problems, often described as “long COVID.” They have identified factors that place some individuals at higher risk for these problems.
Little is known about how the SARS-CoV-2 coronavirus affects the body long-term. Millions of people who have survived COVID-19 infections are living with chronic symptoms, including persistent respiratory problems such as shortness of breath. However, until now, it was not clear what may be causing these symptoms in some people but not others, even after the coronavirus has completely cleared their bodies.
Now, anatomic pathologists at Michigan Medicine, formerly the University of Michigan Health, believe they may have discovered what is causing ongoing respiratory problems in some patients who have recovered from the COVID-19 infection—pre-existing conditions.
The researchers examined lung biopsies from COVID-19 patients who continued to experience lingering symptoms. They discovered in some individuals lung damage that was present prior to contracting the virus.
“Some of the early publications and popular press around long COVID has implied or assumed that once you had COVID, everything that happens next is COVID-related,” said anatomic pathologist and senior author of the study Jeffrey Myers, MD (above), Vice Chair for Clinical Affairs and Quality at Michigan Medicine, in a news release. “Of course, that might or might not be true,” he added. (Photo copyright: University of Michigan.)
The research team analyzed lung biopsies from 18 COVID-19 survivors who were still experiencing respiratory symptoms or had abnormal computed tomography (CT) scans after the virus was no longer present in their bodies. The researchers found ground glass opacities on the radiological scans of 14 of those patients.
According to the news release, this finding indicates there were “areas of the lungs that appear as a cloudy gray color as opposed to the dark color of normal air-filled lungs, on a chest X-ray or CT scan.”
The biopsies exhibited evidence of pre-existing lung scarring and proof of diffuse alveolar damage, which is typically seen in patients with acute respiratory illnesses. Only five of the patients examined in the study were known to have lung disease prior to their COVID-19 diagnoses.
The researchers found that the most common condition present in these 18 patients was usual interstitial pneumonia (UIP). This condition, also known clinically as idiopathic pulmonary fibrosis (IPF), is a common form of pulmonary fibrosis that is characterized by progressive scarring and stiffening of both lungs.
“We were seeing a lot of UIP, which isn’t the pattern we tend to associate with acute lung injury,” said Kristine Konopka, MD, Clinical Associate Professor at Michigan Medicine and lead author of the study, in the news release. “So, we think these are patients who had lung disease prior to COVID and maybe they just weren’t being followed by primary care physicians. They then had COVID, are still sick, and their UIP is finally being picked up.”
Could Patients Have Lung Disease and Not Know it?
“The notion,” Myers noted in the news release, “that a person could have chronic lung damage and not know it was unheard of until relatively recently.” He also explained that UIP/IPF is a progressive disease that gets worse with time and that an infection like COVID-19 can accelerate the illness to a more serious condition known as an acute exacerbation of IPF, which can lead to death.
“SARS-CoV-2 comes along and does to the lung, from a pathology perspective, exactly what happens with an acute exacerbation,” Myers said.
The researchers also stated that it’s impossible to determine for certain whether the SARS-CoV-2 virus caused the UIP/IPF without the existence of full clinical histories of the patients prior to their COVID-19 diagnoses. They hope their research will motivate clinicians to be cautious before automatically attributing respiratory symptoms to long COVID in survivors of the virus. It is possible that the lung damage was present prior to the coronavirus.
“You shouldn’t make assumptions but [instead] ask the right questions, the first of which would be ‘I wonder if this is really COVID?’ What you do after that depends on the answer to that question,” he added.
This research is an example of how pathologists can add insight and value into the deeper understanding of the processes involved in specific diseases. Dark Daily invites any of our readers who are aware of other pathologist-authored studies or published papers about COVID-19 to alert us to the availability of those works.
In an out-of-court settlement, two commercial clinical laboratory companies also agreed to reduce their prices for rapid antigen tests as well
How clinical laboratory companies were pricing their COVID-19 tests caught the attention of government authorities in South Africa. Government agencies in that country are establishing what they view as fair clinical laboratory pricing for private COVID-19 PCR (polymerase chain reaction) and rapid antigen tests without turning to litigation or fines.
The Competition Commission (Commission) is an organization charged with reviewing and acting on business practices in South Africa. In a December 11, 2021, news release, the Commission said it had reached a “ground-breaking agreement” with two private laboratories—Ampath and Lancet—to reduce their COVID-19 PCR test prices from 850 South African rand (R850) to R500 (from US$54.43 to US$31.97).
As of December 12, a third private laboratory company that also had been investigated, PathCare, had not agreed to the court settlement, Daily Maverick reported.
Also effective are lower prices for rapid antigen tests, the Commission said in a separate December 23 news release.
COVID Test Prices ‘Unfairly Inflated’
The changes in PCR test prices in South Africa followed a formal complaint by the Council for Medical Schemes which alleged the private pathology labs [the term for clinical laboratories in South Africa] were “supplying” COVID-19 PCR tests at “unfairly inflated, exorbitant, and/or unjustifiable” prices, Daily Maverick reported.
The clinical laboratory companies “exploited consumers by earning excessive profits on essential products or services,” Tembinkosi Bonakele (above), Commissioner of the South Africa Competition Commission, told the Daily Maverick. “It is always encouraging for companies to voluntarily consider reducing prices, especially where the public is detrimentally affected by the prices, as to avoid protracted litigation,” he added. (Photo copyright: Sowetan Live.)
According to the Daily Maverick, as part of the investigation, which began in October 2021, the Commission asked the private clinical laboratory companies for financial statements and costs of COVID-19 testing.
“We did, then, further interrogation in order to strip out what we saw was potentially padding the costing and unrelated costs. And on the basis of that, we came to the figure of R500,” James Hodge, told the Daily Maverick. Hodge is Chief Economist, Economic Research Bureau, and Acting Deputy Commissioner at the Competition Commission South Africa.
For its part, Lancet, Johannesburg, said in a statement that it “Appreciates the spirit of constructive engagement with the Commission which has resulted in an outcome that best serves the people of South Africa as they confront the fourth COVID wave. We are sensitive to the plight of the public and agree that reducing the COVID-19 PCR price is in best national interest.”
Clinical Laboratory Test Prices: Market Dynamics
So, were the prices too high? In the US, clinical laboratories are reimbursed considerably more by Medicare for COVID-19 testing (about $100), as compared to the South Africa private clinical lab prices.
Also, the Centers for Medicare and Medicaid Services (CMS) said in a statement that effective January 2021 it included in that rate an incentive of $25 to labs that provide results within 48 hours.
Medical laboratories are reimbursed $75 for a high throughput COVID-19 test when results are reported beyond 48 hours, CMS added.
Antigen Tests Prices Also Reduced
The Commission said that during its review of COVID-19 PCR test pricing it received a Department of Health Republic of South Africa complaint about prices for rapid antigen test pricing as well.
After another Commission review, PathCare, Lancet, and Ampath agreed to reduce prices for rapid antigen tests to a maximum of R150 or $9.74 (from a range of R250 to R350 or $16.28 to $22.79), a news release noted.
“The reduction of COVID-19 rapid antigen test prices will help alleviate the plight of consumers and widen accessibility and affordability of COVID-19 rapid antigen testing, which is a critical part of the initiatives to avoid escalation of the pandemic,” said Bonakele in the news release, which also stated that the Commission would receive financial statements from the three labs every few months.
The Commission also is reviewing a “large retail pharmacy chain’s” rapid antigen prices, which “follows a complaint lodged by the Department of Health (DOH), on December 14 2021, against service providers delivering COVID-19 Rapid Antigen tests in South Africa to consumers,” Cape Town Etc reported. The specific pharmacy chain was not identified.
Data Show COVID Plight in South Africa
More than 21.6 million COVID-19 tests have been offered by healthcare providers in South Africa, and 3.5 million cases were detected, according to the Department of Health, Republic of South Africa.
Considering those data, one wonders if the South African government acted fast enough on test pricing.
For medical laboratory leaders, it’s important to recognize that not only are lab services in the spotlight during the COVID-19 pandemic, business practices and prices also are being monitored by officials in this country.
