The Cutting Edge of Diagnostic Testing: Where's Your Lab?

Many Physician's Office Laboratories (POLs) were opened to provide quick and accurate diagnostic results to clinicians by keeping testing in house. In 2012, this model was in place for 116,634 of the 232,996 laboratories in the U.S.1 Many of these labs are in the office practices of primary care physicians, and some are in specialty practices that made the decision to have an in-house laboratory based on the necessity or desire of having certain tests at their fingertips.


According to an article in the Journal of General Internal Medicine, "physicians who own diagnostic testing equipment are more likely to order tests and highlight the important role that self-referral plays in the practice of outpatient medicine."2 These specialty tests, in conjunction with traditional diagnostic tests such as Complete Blood Count (CBC), Blood Chemistry Tests/Basic Metabolic Panel and Urinalysis, have created a one-stop shopping approach to medical care in many private practices. But, as patients' needs and medical technologies continue to change, so, too, must the POL.


In looking at future trends in lab testing, the factors to consider are as varied as the number of tests labs can provide. "Growth in physician office testing is fueled by trends in preventative medicine and proactive approaches in treating the increasing number of diagnosed diabetics; by the globalization of infectious diseases and the associated public health issues; and by the need to monitor the explosion of people with cardiovascular disease and other chronic conditions," according to a 2010 Kalorama Information market research report, "Physician Office Laboratory (POL) Testing Markets Worldwide: Status Quo and Future Trends."3 POLs are uniquely positioned to be able to provide high quality, immediate testing that can directly impact treatment and patient care, while also generating additional revenue for their practices.


Major factors to consider in testing trends are government regulation and oversight. The Physician Fee Schedule (PFS) was put on the table in 2013 by the Centers for Medicare & Medicaid Services (CMS) to trim excess costs and reduce physician overpayment or alleged abuse for self-referral based-testing. This legislation is still being considered, as thousands of physicians and laboratory organizations are voicing their concern over the methodology used in reducing these reimbursement fees. According to a recent article in the American Society of Clinical Pathology's ePolicy News, "Under the physician payment cap proposal, a ceiling on PFS payment rates is imposed, but only in cases where payment for the service provided at a 'non-facility' (non-hospital setting) exceeds the payment provided under the Medicare Outpatient Prospective Payment System's (OPPS) fee schedule. Payment amounts for services that are less on the PFS than the OPPS are not affected. CMS's rationale for imposing the cap is based on the belief that physician offices (non-facilities) should not be reimbursed at a level greater than hospital outpatient services, since hospitals' costs are, on average, greater."4 Many laboratory industry professionals feel that the rules should come down on physicians who may manipulate the system and not on laboratories in general.


The other major factor that must be considered in testing trends is the "Patient Protection and Affordable Care Act" (H.R. 3590). "The legislation contains a range of different provisions and while the law in a broad sense is expected to have a positive result in terms of net sales and procedure volume increases, it will also impose challenges, including cost containment initiatives and reimbursement cuts,"5 according to a 2013 Kalorama Information report, "The Impact of Healthcare Reform (PPACA) On the U.S. IVD Industry."


Of course, many of these new regulations and oversights do not take into consideration the investment that physicians already have made in providing in-house laboratory services to their patients. These investments are not only for equipment and consumable costs, but also for personnel, training and continuing education, Laboratory Information System (LIS) technology, as well as expenses associated with proficiency testing and accreditation. Physicians looking for a return on investment on their laboratories should weigh the costs of outfitting and running their lab with what lies ahead in the landscape of American medicine.


Meanwhile, as an estimated 35 million newly insured consumers enter the healthcare system as a result of the ACA, the result will be massive first-time lab testing with healthcare providers.6 What tests will these new patients need -- CBC, electrolytes, glycosylated Hemoglobin A1c (HbA1c), cholesterol and/or, Prostate-Specific Antigen (PSA)? Will an overweight population require more lipoprotein panels?7 Will an aging population require more blood tests (serum creatinine) to confirm that kidney function is normal prior to each IV injection for osteoporosis medications?8 And, with the concerns for preventive medicine, will the marketplace explode for genetic testing?9


Likely, lab testing trends will be based on what the landscape looks like in each individual POL. Market reports and industry guidelines are great ways to stay informed on the "hot testing topics." But a laboratory's ultimate test selection decision should be made based on patient demand, tests' cost effectiveness, and the laboratory's commitment to quality in providing the identified tests. After all, what's hot today might not be hot tomorrow, and labs don't want to have highly specialized, expensive equipment collecting dust on the bench top. As with many things in life, POLs must choose wisely, not only for their patients, but also for their practice as well.

About COLA Resources, Inc. (CRI)

CRI is a leader in online continuing education for physicians, laboratory personnel and allied health professionals. CRI offers continuing education through online courses, informational products in both electronic and hard copy form, webinars on cutting-edge technology and regulatory issues, and CRI on-site Symposia for Clinical Laboratories, providing live educational sessions and interactive workshops with leading industry organizations. For more information, visit their website at www.criedu.org or call 1-800-981-9883.

1CMS - CLIA Database Information, 2013, http://www.cms.gov/Regulations-and-Guidance/Legislation/CLIA/Downloads/summary_chart1993_to2010.pdf

2Bishop., et al. "Laboratory Test Ordering at Physician Offices with and without On-Site Laboratories" (2010) J Gen Intern Med. 2010 October; 25(10): 1057–1063.

3Kalorama Information. (2010), "Physician Office Laboratory (POL) Testing Markets Worldwide: Status Quo and Future Trends" http://www.marketresearch.com/Kalorama-Information-v767/Physician-Office-Laboratory-POL-Testing-2807838/

4ASCP Advocacy ePolicy News "Medicare PFS: A Triple Whammy for Pathologists and Labs" Retrieved from ASCP Online http://www.ascp.org/Advocacy/ePolicy-News-August-2013.html#Fed,

5"The Impact of Healthcare Reform (PPACA) On the U.S. IVD Industry" http://www.kaloramainformation.com/Impact-Healthcare-Reform-7728373/

6"Public Health Insurance / Care Options" http://healthcareprovider.info/public/

7"Common Blood Tests" http://www.nhlbi.nih.gov/health//dci/Diseases/bdt/bdt_types.html

8"Types of Osteoporosis Medications" http://nof.org/articles/22

9"Value of Genetic Counselors in the Laboratory" http://www.aruplab.com/files/resources/genetics/White-paper-1-value-of-GCs-in-lab.pdf