New billing rules from UnitedHealthcare have the lab industry concerned about additional administrative burdens and the potential for an increase in denials from the nation's largest health insurer.
At the beginning of March, the payor began rolling out notices of its new test registry protocol, under which labs must register with UHC the tests they offer and include a unique test code for each test they bill the insurer in order to be reimbursed.
UHC declined an interview request but provided comments on the test registry rollout through a spokesperson. The company initially set a deadline of September 1, 2020 for labs to register their tests but recently extended that deadline to December 1, 2020 due to the SARS-CoV-2 pandemic, said the spokesperson. Regarding the new deadline the company "will continue to monitor the situation and make adjustments as needed," UHC said.
Even with the new deadline, though, many labs, especially smaller independent labs and hospital outreach facilities, may struggle to register their tests in time, said Jane Hermansen, manager of outreach and network development at Mayo Clinic Laboratories and the immediate past president of the Clinical Laboratory Management Association.
"Hospital labs are really stressed and are quite panicky about finding the time to fit this extra administrative step in," said Hermansen, noting that the timing is particularly challenging given the pandemic situation. "We are still dealing with hunkering down, getting ready for a third wave of sick patients to come in this fall, and now we have to take an overburdened systems and add this IT data entry piece, as well."
UHC said that the company has created the test registry in order to gain better visibility into what tests it is paying for and to provide its members better information on test availability and costs.
Kyle Fetter, executive vice president and general manager of diagnostic services at Xifin, said, however, that while this might make sense for some categories of testing, the value of applying the requirement across the board including to very routine tests was less clear.
Fetter said that the genetic testing space had gone through a similar experience in the last decade. At that time, he noted, "you had many types of genetic tests that were different from each other in many ways and unidentifiable based on the codes that they were using."
In that case, Fetter said, the Molecular Diagnostic Services (MolDX) program determined that the CPT codes being used for these tests were not sufficient and that other, more descriptive identifiers were needed.
"And that was OK on some level because there were probably some tests out there getting paid for that maybe in hindsight should have had more oversight," he said.
Fetter said the UHC registry is different in that the payor is requiring registration not only of complex tests for which more descriptive codes could provide useful transparency, but of "all laboratory testing, even the most generic laboratory testing."
One possible motive for UHC, Fetter said, is that the test registry could make it easier for the payor to identify bills from out-of-network labs.
"The fact that you have to give this additional code gives them a very discrete and easy mechanism to identify an out-of-network service," he said. "People think things like that are easy for a payor — like, yeah, I know when I see this lab come in on a claim with this procedure, it is out of network — but it's not easy. Adding another code like this does probably make this quite a bit easier for them in their adjudication systems to identify services as out of network."
Fetter also suggested that the move was a way for UHC to narrow its network by creating a burden that may be challenging for many labs to meet.
Harley Ross, executive vice president and chief revenue officer at healthcare revenue cycle management firm Quadax, suggested that the registry could potentially help UHC steer more business to its Preferred Lab Network members, which are mostly large national labs with IT infrastructure and resources that could make it easier for them to comply with the requirements.
This would fit with other moves by the insurer that seem designed to steer patients to these preferred providers, which typically have lower prices than small independent or hospital labs.
For instance, UHC has eliminated out-of-pocket charges for many of its members when they use a PLN member for their lab testing, which may incentivize members to use PLN labs, particularly in cases where they would otherwise be subject to substantial cost sharing or co-pays.
Ross said that the implementation process and the inevitable hiccups involved from an operational perspective could prove too much for some more financially vulnerable labs.
"These things never go off cleanly," he said. "So, from an operational cost perspective, if all of a sudden my costs on, for example, UnitedHealthcare claims go up 10 percent because I'm having to do contract denial follow-up, appeal follow-up, etc.… there are just a lot of unknowns about how material that will be to those labs."
He suggested that given UHC's size, this could have broader effects on the industry, including but not limited to, impacting reimbursement rates under the Protecting Access to Medicare Act if it resulted in labs seeing lower average test payments.
The company has received pushback from a number of provider groups regarding its test registry. In August, the American Hospital Association issued a letter to UHC calling on the payor to reconsider the policy, saying that it "could negatively impact the accessibility of care, as well as create unnecessary burdens on both patients and providers at the same time that such providers are expected to still be managing the COVID-19 public health emergency." It added that UHC has not "provided a rationale" for the requirements nor "justified the potential negative consequences."
The College of American Pathologists also issued a statement in August objecting to the registry requirements, particularly in light of the pandemic, saying that "now is not the time to move forward with new billing rules and potentially further disrupt revenues by denying claims for tests."
Fetter said that there is also frustration in the lab industry at what is perceived as a lack of communication coming from UHC.
"When we could call them about it, people couldn't answer questions about it," he said.
Hermansen said that UHC rolled out the plan with little notice.
"They just kind of snuck it out on their website, and it was just kind of savvy people who were poking around on that website and said, oh, look at this," she said.
UHC said that the company began to post information about the change on its website starting on March 1, 2020 and that it has since published articles in its network bulletin and sent letters to providers.
Beyond the UHC requirements, there is the concern that other payors will follow suit, Hermansen said.
If that happened it could be a substantial burden for labs, Fetter said. "If Humana and Aetna and Anthem and other payors all picked this up, it would be a pretty massive lift" for labs.
"You'll have 10 different codes for 10 different payors," he said. "So you send a bill to UnitedHealthcare and it's a patient who has AARP backing up an Aetna Medicare Advantage plan, and they aren't going to have the same codes when they cross those claims over."
Fetter suggested that concerns about this kind of complication might ultimately lead UHC to walk back the registry plan, at least partially.
"My guess is that even if this goes into place, they will end up having to roll it back at certain points because it won't be working," he said. "I think they are going to realize this is a bigger headache than it's worth."
He noted that UHC rolled out its genetic test registry at the end of 2019 and suggested that the broader test registry might have been conceived as a way to expand that concept to other test codes that it also considered lacking in transparency.
"I think they said, let's take this [genetic registry] a step further and roll it out to the rest of lab because there are other tests that are unnecessarily complex and expensive and we don't have good tracking on them," Fetter said.
This story first appeared in our sister publication 360Dx, which provides in-depth coverage of in vitro diagnostics and the clinical lab market.
