Eliminate lab test panel padding to support value-based care

The simple definition of value-based care is better patient outcomes combined with smarter spending. As the US healthcare system shifts from a fee-for-service model to incentivizing providers for better care at a better price, there are specific practices in the ecosystem that need to be addressed. The filling of panels for laboratory tests is one of them.

Panel fill describes how laboratories add tests of no clinical value to panels and then bill for them. It is an example of a little-discussed practice in the health system that rewards abusive behavior.

The laboratory industry develops test order menus from which physicians order laboratories. While panels, which represent useful tests commonly ordered together, are developed, laboratories may add additional tests that are not useful for the physician’s diagnostic evaluation.

Avalon Healthcare Solutions has analyzed paid lab test claims and has concluded that independent laboratories perform the most non-compliant test units, which are those that do not comply with a health plan’s published policies that document best practice guidelines and evidence-based medicine.

Vitamin D tests are a good example of wasteful test stuffing into routine laboratory panels. Several laboratories add an experimental subcomponent analysis to the vitamin D panel that does not inform care. For thyroid panels, there are seven unique tests, but only two are important for the most common clinical scenarios, bringing the cost of a routine thyroid panel from around $30 to $137. In fact, a general panel thyroid test is only for pregnant women, and every patient, male or female, who has a thyroid panel receives and pays for this test.

The cost of panel infill.

With the projection that the US can spend up to $27.9 billion annually When it comes to low-value screening, testing, and procedures that are considered waste, there needs to be a new approach to how the lab industry develops menus of tests from which clinicians order labs.

Laboratory tests that lack clinical indications can lead to unnecessary collection of patient samples, as well as increased risk of false positive results and unnecessary costs.

We believe that, on average, the waste caused by filling out panels on processed claims costs about $2 per member per month. Patients pay on average 1/3 of the cost at the point of service and payers pay the other 2/3, so for every 1 million health plan members, the out-of-pocket cost to members is $8 million of the $24 million worth of useless tests reimbursed each year.

Explosion in laboratory tests.

Laboratory tests currently represent the largest single volume of medical activity, and the next decade is expected to bring 4,000 new tests to market, none of which currently require FDA approval. with approximately 30% of laboratory tests being unnecessary, the challenge remains how doctors and health plans can keep up with the lab tests that actually inform care.

Contributing to that challenge is the significant growth in genetic testing. The amount of genetic testing paid for by commercial health plans has increased significantly due to the increase in commercialized genetic testing, declining prices over time, and increasing consumer demand. The four-year trend in paid commercial genetic testing reflects a compound annual growth rate of 17%, in contrast to Medicare’s high growth rate of nearly 50%.

Health plans will need to incorporate changes in policies and operating practices as genetic correlations between complex traits and diseases are identified. The plans also face the challenge of ensuring that high-volume, low-cost routine testing complies with clinical policies.

Overcoming those challenges to advance value-based care requires a focus on science combined with innovative automation that manages all routine and genetic laboratory testing with minimal abrasion.

Laboratory benefit management

While clinicians need education and transparency about what a panel includes, health plans must also prioritize the proper use of laboratory tests. Laboratory benefits management has traditionally focused on eliminating waste and abuse of laboratory tests, helping to navigate the increasing complexities of genetic testing, and helping health plans reduce the cost of the standalone network unit. While this has proven value, it really ends with adjudication of the lab claim and delivery of the result to the physician.

With sound science at the core, payment integrity programs that include laboratory benefits management can flag non-adherent testing, both from panel fill and inappropriate genetic testing orders before a test is performed. Digitized lab results and an analysis engine provide lab insights into the right test, the right data, the right intelligence, and the right care. This laboratory testing innovation will help transform the way quality care is delivered to individuals and populations, while helping health plans, providers and patients save time, uncertainty and risk.

We shouldn’t have to choose between achieving quality clinical results or proven cost savings. Eliminating panel filler brings us closer to performing and paying for only the lab tests that truly impact patient care.

Photo: Anastasia Usenko, Getty Images