(This article has been updated with a correction.)
A UnitedHealthcare pilot to control rising clinical laboratory costs in Florida has sparked an uprising among physicians and lab companies who say the program is burdensome and unfairly limits competition.
After a delay caused by physician complaints, in mid-April UnitedHealthcare started requiring doctors in its Florida provider network to give prior notice when ordering one of 79 lab tests. The new lab benefit-management program is run by Beacon Laboratory Benefit Solutions, a subsidiary of Laboratory Corporation of America.
Doctors serving about 430,000 patients in UnitedHealthcare's commercial health plan in Florida now must file a pre-notice with the insurer when they order a listed lab test, including Pap tests and biopsies for prostate cancer. UnitedHealthcare also requires prior approval to run the screening test for mutations in the BRCA1 and BRCA2 breast-cancer genes.
The program is being closely watched by other insurers, who say lab costs are rising because of over-ordering by physicians. UnitedHealthcare says overutilization may be the result of increased demand from patients influenced by reports or marketing campaigns touting the benefits of genetic and other types of tests to avoid diseases.
Dr. Sam Ho, chief medical officer at Minnetonka, Minn.-based UnitedHealthcare, the nation's largest commercial insurer, said that lab costs for its members nationwide have grown 10% a year, and that his company is concerned about wide variations in testing quality among labs.
“The fact that you have variation of quality, the fact that you have cost inflation, means this is an area we need to pay attention to,” Ho said.
He said UnitedHealthcare will assess the Florida pilot's success and decide within the next few months whether to expand the program to other states. “We're hopeful we can,” Ho said.
But the Florida Medical Association has drafted legislation to block insurers from implementing similar programs. Doctors say complying with the new program takes too much time.
“Soon we won't be able to see patients, we'll just spend all our time documenting everything,” said Tampa orthopedist Dr. Michael Wasylik, chairman of the medical association's medical services committee. “It makes me want to puke just talking about it.”
Clinical lab companies in Florida complain that UnitedHealthcare's pilot locks them out, benefiting BeaconLBS' parent company, LabCorp. They say BeaconLBS requires them to agree to certain prices offered at “labs of choice.” Of the 13 “labs of choice,” five are owned by or affiliated with LabCorp.
“They're trying to force everyone to send to LabCorp,” said Joseph Raiano, operations manager for Reliance Pathology Partners in Tampa.
For UnitedHealthcare to cover lab tests, physicians must use BeaconLBS' Web-based support tool, which doctors say is balky and doesn't work with their electronic health-record systems.
“The computer entry was like 22 clicks,” said Wasylik, who has spent months working with UnitedHealthcare and BeaconLBS to improve the system. “I would have to sign out of my EMR program and sign in to their system. It sounds petty, but you have to understand how much doctors are burdened.”
UnitedHealthcare said it has improved its computer interface and removed tests for prenatal profiles and gestational diabetes from its pre-notice requirement tests. It has also worked to integrate the BeaconLBS system with more EHR systems.
But Jeff Scott, the Florida Medical Association's director of legal and governmental affairs, said there remains “absolute, complete dissatisfaction with this program.”
BeaconLBS did not respond to requests for comment.
The American College of Rheumatology wrote to UnitedHealthcare criticizing the pilot, saying doctors are “the only ones aware of the nuances of an individual patient's symptoms, disease and needs,” and shouldn't be second- guessed.
But UnitedHealthcare isn't alone among insurers acting to control lab-test costs. Aetna, which uses a preferred network of lab providers, has “noticed growth in lab work with the expansion of esoteric and molecular testing,” an Aetna company spokesman said.
“We are working closely with our vendors to ensure they understand our clinical policies and health-benefit plans to help manage unnecessary lab testing, reduce costs and improve quality of care.”
Procedures for approving lab tests vary among insurers, with many now requiring pre-approval for some high-cost molecular testing but not for routine tests.
Aetna, for example, only requires pre-approval on lab tests for mutation screening in the BRCA genes.
Robert Michel, editor of the Dark Report, a trade newsletter for the clinical lab industry, said UnitedHealthcare's arrangement with BeaconLBS shuts out nearly half the labs UnitedHealthcare's network doctors have previously used.
The insurer, Michel charged, is letting LabCorp's business unit decide in a non-transparent way which labs get to be in-network and how much they get paid.
“You can see why these excluded labs consider this anti-business behavior,” he said.
David Royse is a freelance writer based in Chicago.
(This article has been updated with a correction. UnitedHealthcare will pay any in-network lab for tests ordered by doctors who gave prior notice before ordering the test. In addition, United says it's not locking out labs that meet accreditation standards from payment for tests, contrary to claims by some lab industry critics.)