LabCorp’s Beacon Laboratory Benefit Solutions laboratory management system is touted as a way for smaller laboratories to better manage their operations. But the nation’s largest health insurer apparently sees Beacon as a way to potentially ratchet down costs throughout a large chunk of its provider network. That is how Minnesota-based UnitedHealthcare is employing Beacon in Florida, where it will launch a lab benefit management program starting Oct. 1. Beacon will serve as its administrator. In a letter sent to its network of independent and hospital labs last May, UnitedHealthcare said the use of the Beacon system is “to help improve quality of care and manage appropriate utilization for outpatient laboratory services.” The pilot pertains only to UnitedHealthcare’s fully insured commercial members, which excludes its huge Medicare Advantage business, Medicaid managed care, and a variety of subsidiaries. Nevertheless, it is fairly sweeping. More than 80 tests—including virtually all anatomic pathology assays and even basic thyroid and urine panels—require preauthorization by submitting a request through Beacon’s platform and waiting for approval. Moreover, many tests also require that the pathologist have certification from the College of American Pathologists. And a second review by another appropriately certified pathologist may also be required, both for […]
LabCorp’s Beacon Laboratory Benefit Solutions laboratory management system is touted as a way for smaller laboratories to better manage their operations. But the nation’s largest health insurer apparently sees Beacon as a way to potentially ratchet down costs throughout a large chunk of its provider network.
That is how Minnesota-based UnitedHealthcare is employing Beacon in Florida, where it will launch a lab benefit management program starting Oct. 1. Beacon will serve as its administrator.
In a letter sent to its network of independent and hospital labs last May, UnitedHealthcare said the use of the Beacon system is “to help improve quality of care and manage appropriate utilization for outpatient laboratory services.”
The pilot pertains only to UnitedHealthcare’s fully insured commercial members, which excludes its huge Medicare Advantage business, Medicaid managed care, and a variety of subsidiaries. Nevertheless, it is fairly sweeping. More than 80 tests—including virtually all anatomic pathology assays and even basic thyroid and urine panels—require preauthorization by submitting a request through Beacon’s platform and waiting for approval.
Moreover, many tests also require that the pathologist have certification from the College of American Pathologists. And a second review by another appropriately certified pathologist may also be required, both for premalignant and malignant diagnoses. For dermatopathology cases, one of the pathologists involved in the diagnosis must have a subspecialty in dermatopathology; ditto for cytopathology and hematopathology.
If the preauthorization and other protocols are not followed, the pathologists will not be paid for the services rendered.
Laboratory Industry Report attempted to reach about a dozen independent pathologists practicing in Florida for comment. Most either declined to comment or did not respond. But the one clinician who did go on the record felt the pilot project was an overreach.
“It’s a very sophisticated business strategy on the part of LabCorp to increase market share for [its] outpatient business and for United to boost profits disguised as a ‘quality initiative,’” said Pedro Carmona, M.D., a pathologist who practices in Titusville, Fla.
Carmona is concerned about having to retain—and possibly pay— subspecialists for second reviews, particularly for work that he believes is often unnecessary. As an example, he believes that after 25 years of practice, he can accurately diagnose about 70 percent of hematopathology cases without a review from a subspecialist.
“We’ve received training for diagnosing a lot of hematopathology and dermopathology cases,” he said. “Does that experience and training not count anymore?”
Carmona does not believe the UnitedHealthcare-Beacon initiative will have a large impact on his practice, as he does not treat a large number of United enrollees. But he is concerned that it could impact the community hospitals involved in the Titusville area and elsewhere in Florida.
A LabCorp spokesperson did not respond to repeated requests for comment. A UnitedHealthcare spokesperson said the program helps providers choose the most appropriate tests using evidence-based guidelines.
At the same time, a report released earlier this month by the Office of Inspector General of the U.S. Department of Health and Human Services concluded that more than 20 percent of all of the laboratory claims submitted to the Medicare program in 2010 are tied to questionable billing patterns. That may provide the leverage for UnitedHealthcare to eventually expand the program into other states and insurance plans.
Takeaway: LabCorp appears to be expanding its Beacon subdivision beyond laboratory management and into the realm of private payers and utilization management.
