Survey Reveals Huge Gap Between “Have” and “Have Not” Labs

Survey Reveals Huge Gap Between “Have” and “Have Not” Labs

Survey Reveals Huge Gap Between “Have” and “Have Not” Labs

The latest Laboratory Economics Covid-19 Survey of Labs showed that 71% of labs were currently performing Covid-19 PCR testing and another 3% planned to soon add this capability, while 26% were not doing this testing. Those labs that are performing Covid-19 PCR testing reported that they expect their overall test volume (including both Covid and non-Covid testing) this year to increase by an average of 59% with a median of 10%.

The benefits garnered by labs doing Covid-19 PCR testing will soon be enlarged as many labs are in the process of switching to combo tests that detect Covid-19 and influenza A/B from a single patient specimen (CPT 87636). New combo PCR tests for Covid-19, influenza A/B and respiratory syncytial virus (RSV) are also being introduced (CPT 87637).

Meanwhile, the “Have Nots” that do not perform Covid-19 PCR testing are expecting average volume growth of only 1% with a median of 0%. The “Have Nots” surveyed were comprised entirely of local pathology groups and physician-office-based labs.

“The downturn in patient office visits has decreased lab volumes and caused many to furlough or completely lay off certain areas of staff. The labs that are thriving are those that have been fast and flexible enough to add Covid testing,” said a surveyed lab executive from Florida.

“The Covid pandemic has introduced new healthcare delivery platforms, such as telemedicine, that do not enable the same amount of referral laboratory testing. Despite offering an electronic order and convenient online scheduling at local patient service centers, we are seeing an increase in patient no-shows and test orders are not being completed,” noted a lab executive from Texas.

National Covid-19 PCR test volumes have quadrupled since LE’s initial Covid-19 survey conducted back in early May. Volumes might be even higher if not for continued supply shortages. Our most recent survey
showed that 59% of labs had shortages in PCR-based Covid-19 test kits. Pipette tips (45%) and collection swabs/specimen transport media (41%) are also currently in short supply.

The Laboratory Economics Covid-19 Survey of Labs was emailed to approximately 6,000 pathologists, laboratory directors, managers and executives between September 30 and October 13. We received complete responses from 124 individuals, including 44% from local independent pathology groups/labs, 25% from national pathology/commercial lab companies, 23% from hospital-based labs and pathology groups, 6% from academic medical centers, and 2% from physician office labs.

Majority Of NYC Nursing Home Employees Have Had Covid-19

Majority Of NYC Nursing Home Employees Have Had Covid-19

Majority Of NYC Nursing Home Employees Have Had Covid-19

BioReference Labs reports that Covid-19 antibody testing it performed on nursing home employees throughout New York State in May-June showed a 29% positivity rate. New York City nursing home employees were found to have the highest positivity rate (55%).

During the same time period, BioReference performed PCR-based molecular tests for active Covid-19 infection and found a 2.9% positive rate throughout the state, including a 4.6% positive rate for New York City nursing home employees.

The testing was performed as a result of a New York State mandate (effective May 10) that all personnel at nursing home and adult care facilities be tested for active Covid-19 infection using PCR-based molecular testing, twice per week. In addition, at the start of the program, many nursing homes asked that employees be tested for antibodies at the same time.

BioReference uses the Roche Elecsys Anti-Sars CoV-2 assay for antibody testing. Overall, BioReference tested 3,488 nursing home employees in New York State (primarily in May) for antibodies and found 1,010 positive cases. “With 29% of employees testing positive for antibodies, an extrapolated estimate for the 140,000 total nursing home staff in New York State suggests as many as 41,760 nursing home staff members in the state could have had Covid-19 prior to early May,” according to Jon Cohen, MD, Executive Chairman at BioReference.

Top 25 Fastest-Growing Labs by Medicare Part B Volume of Services
Sweden’s Controversial Covid-19 Strategy

Sweden’s Controversial Covid-19 Strategy

Sweden’s Controversial Covid-19 Strategy

Sweden never imposed a strict lockdown to combat Covid-19, unlike most other countries. The only official rules put in place are a ban on gatherings of 50 people or more and a ban on visitors to nursing homes.

The nation’s Chief Epidemiologist, Anders Tegnell, MD, PhD, says Sweden’s strategy is based on the assumption that Covid-19 isn’t going away any time soon, and that severe lockdowns can’t be maintained for very long and will prove to be ineffective over the long run. Strict lockdowns may temporarily contain the virus, but won’t prevent it from returning, according to Tegnell.

In an interview with Swedish Public Radio on June 24, Tegnell said that Sweden has followed the “classic pandemic model” that he had been discussing with international colleagues for 20 years. Tegnell characterized lockdowns as flying in the face of what is known about handling viral outbreaks. “It was as if the world had gone mad, and everything we had discussed was forgotten….The cases became too many and the political pressure got too strong. And then Sweden stood there rather alone.”

Sweden, which has a population of 10.1 million, has recorded 65,137 cases, 2,407 intensive care admissions and 5,268 deaths from Covid-19 as of June 25, according to the Public Health Agency for Sweden. More than half of the Covid-19 deaths in Sweden have occurred among its nursing home residents.

Covid-19 deaths in Sweden are much higher per capita than its nearest neighbors (Finland, Norway and Denmark), which had strict lockdowns. However, its per capita death rate is lower than some other European countries that had strict lockdowns, such as Belgium, Britain, Spain and Italy.

Sweden New Covid-19 Cases 7 day moving avg
Swedish Covid-19 ICU-Admissions
Daily Deaths Covid-19 Sweden

Survey Reveals Huge Gap Between “Have” and “Have Not” Labs

Medicare Sets Good Rates For Covid-19 Testing

Medicare Sets Good Rates For Covid-19 Testing

CMS has been very fair when establishing reimbursement rates for Covid-19
tests in an effort to encourage widespread diagnostic and antibody testing.
Furthermore, private health plans are required to cover both diagnostic and antibody testing without member cost-sharing (copays or deductibles) as a result of the Families First Coronavirus Response Act (FFCRA). “Most private insurers have been uncharacteristically reasonable in establishing their rates and working with labs to fix claims processing errors for Covid-19 testing,” notes Lale White, Chairman & CEO at XIFIN Inc. (San Diego).

High-Throughput Covid-19 Diagnostic Testing
Covid-19 diagnostic testing on high-throughput testing systems (200+ specimens per day; e.g., Roche cobas 6800/8800, Abbott m2000 System, Hologic Panther Fusion System, et al.) is billed using HCPCS U0003 or U0004 at a Medicare rate of $100. XIFIN’s White says that her firm has
seen 89% of private insurance claims for U0003 and U0004 paid at or above Medicare’s rate, and only 11% underpaid. She says that underpayment most commonly occurs with BCBS plans, which are frequently paying for high-throughput Covid-19 testing at the low-throughput rate of $51.

Low-Throughput Covid-19 Diagnostic Testing
CMS has established two codes (HCPCS U0002 and CPT 87635) for low-throughput Covid-19 diagnostic testing systems (<200 specimens per day) and set reimbursement at $51.31. Aetna and Cigna are paying equivalent rates, according to Scott Liff, President & CEO at Kellison & Company (Cleveland, OH). Similarly, UnitedHealthcare and many BCBS plans are allowing $51.31, according to Deb Larson, Executive Vice President at TELCOR Inc. (Lincoln, NE). In addition, several big state Medicaid plans, including California, Illinois and New York, have set their fee-for-service rates for U0002/87635 equivalent to Medicare.

Covid-19 Antibody Testing
Medicare reimbursement for Covid-19 antibody testing has been set at $45.23 for CPT 86328 (point-of-care tests) and $42.13 for CPT 86769 (laboratory-based multi-step methods). These are very favorable rates when compared with other antibody test codes for infectious agents that are
reimbursed by Medicare at rates between $8.93 and $19.35, according to Charles Root, PhD, President of CodeMap LLC (Chicago). He notes that labs testing for two antibodies (IgM and IgG) can bill CPT 86769 twice for total Medicare reimbursement of $84.26.

Unfortunately, White says that private insurer reimbursement of Covid-19 antibody testing is more problematic. Most private payer claims for CPT 86769 are being reimbursed below the Medicare rate. For example, some BCBS plans are paying between $12 and $35, with an average of roughly $20, according to White. Similarly, TELCOR’s Larson has seen BCBS rates in the range of $12 to $20, while Kellison’s Liff has seen rates of between $15 and $18 from Cigna.

In addition, some private insurers have taken the position that antibody testing should not be covered if it’s part of an employer-based testing effort for bringing their staff safely back to work, even if the testing is voluntary and performed under a doctor’s order. This flies in the face of the CARES Act, which is intended to promote both Covid-19 diagnostic and antibody testing for anyone that wants it, notes White.

Claims Denial Rates for Covid-19 Testing
Early on in the pandemic (March/April), White says that XIFIN was seeing denials and balance bill errors occurring on about 22% of the Covid-19 test claims it processed. The most common denial and adjudication errors involved medical necessity denials and improper processing of patient
co-pays and deductibles.

However, White says that most payers have readily acknowledged their adjudication errors, made corrections and reprocessed claims with very few requesting a resubmission.

On current claims through the end of May, White says that initial denial rates have fallen to 7% with co-pay/deductible errors at less than 1%. “We expect that 7% medical necessity denial rate to get down to 4% to 5% after we make some calls to correct the remaining denial adjudication errors.”

Similarly, Larson says that TELCOR is currently seeing initial denial rates of 5% to 9% on Covid-19 test claims with the primary source of denials related to member insurance coverage eligibility.

Challenges for Out-of-Network Labs
White notes that one issue that has not been resolved is the continuation of BCBS payer policies that reimburse patients directly for out-of-network (OON) lab test claims. This forces OON labs performing Covid-19 testing to seek payment from patients. “With bad debt rates as high as 50% on direct patient billing and all the added costs involved with identifying a direct patient payment, it is not prudent for the Blues to take a position of penalizing labs that are OON during a time when extensive testing capacity is being demanded at the federal, state and local level for management of the pandemic,” observes White.

Specimen Collection Rates for Covid-19
On March 30, CMS announced the creation of new Covid-19 specimen collection HCPCS codes (G2023 and G2024) at very favorable rates.

HCPCS G2023 is intended for independent labs that collect Covid-19 specimens (by any specimen source) from homebound or non-hospital patients. Medicare reimbursement has been set at $23.46.

HCPCS G2024 is intended for independent labs that collect Covid-19 specimens (by any specimen source) from patients in a nursing home or on behalf of a home health agency. Medicare reimbursement has been set at $25.46.

CMS says that these new specimen collection codes will remain in effect until it has determined that the Covid-19 pandemic is over.

The rates for G2023 and G2024 are far above Medicare’s existing $5 rate for G0471 paid to labs for non-Covid-19 blood collection services provided to nursing home patients or on behalf of a home health agency.

However, the catch is that nearly all Covid-19 diagnostic test samples are nasal swabs that are collected by nurses, not lab-employed phlebotomists (see page 6 for more).

The new Covid-19 specimen collection codes do apply to lab-employed phlebotomists that collect blood samples for Covid-19 antibody testing from nursing home or homebound patients. However, demand for antibody testing has been weak to date.

Swedish Flag

Survey Reveals Huge Gap Between “Have” and “Have Not” Labs

Covid-19 Situation Update At Five Laboratories

Covid-19 Situation Update At Five Laboratories

Viracor Eurofins Laboratories (Lee’s Summit, MO) has the capacity to perform 2,000 PCR-based Covid-19 tests per day; however, about 50% of that capacity is currently unused, according to Steven Kleiboeker, PhD, Vice President of Research and Development. Nationwide, Eurofins U.S. Clinical Diagnostics, which includes Viracor and six other laboratories, has the capacity to run up to 10,000 PCR tests per day and expects to triple that number by the end of this month.

Viracor launched Covid-19 antibody testing on May 5 and has the capacity to perform more than 2,000 tests per day with a 24-hour turnaround from specimen receipt. Nationwide, Kleiboeker says that Eurofins’ seven labs can currently perform up to 10,000 antibody tests per day with capacity expected to triple by the end of this month.

Kleiboeker expects the demand for Covid-19 testing to increase dramatically as lockdowns in many states have begun to be lifted. That being said, Eurofins currently has excess testing capacity. “This is due to a variety of factors, including hospitals taking their testing in-house, supply-chain issues, and on the coasts, exclusive deals between the top insurance companies and the two largest labs,” according to Kleiboeker.

ARUP Laboratories
ARUP Labs is currently performing between 3,000 and 3,500 PCR-based Covid-19 tests per day and steadily increasing its capacity, according to Julio Delgado, MD, Chief Medical Officer and Director of Labs. He says that the swab and test kit supply situation has improved over the past few weeks and that ARUP has expanded its Covid-19 testing from Utah patients only to nationwide. In addition, ARUP began Covid-19 antibody testing in late April and is now performing about 5,000 antibody tests per day with steadily increasing capacity.

Northwell Health Labs
Northwell is currently performing about 2,000 PCR-based Covid-19 tests per day, according to James Crawford, MD, PhD, Senior Vice President for Laboratory Services. He says daily positivity rates for Covid testing peaked at 63% on March 31 and have now fallen to roughly 15%. In response to shortages, Northwell has begun using its own self-manufactured 3D swabs, which were clinically validated before deploying. In addition, Northwell started performing antibody testing on May 1 using multiple commercial platforms. Northwell is currently performing about 5,000 antibody tests per day and is in the process of testing its 70,000 employees.

American Health Associates
American Health Associates (Davie, FL), which provides lab testing services to more than 4,000 nursing homes and assisted-living facilities, recently began performing PCR-based Covid-19 testing and serum antibody testing at its corporate laboratory near Miami. Previously, AHA had sent its Covid-19 test samples to LabCorp. AHA is using the 7500 Fast Dx instrument from Thermo Fisher Scientific in combination with Thermo’s 96 Kingfisher auto extraction unit for PCR-based Covid-19 testing. AHA will be using Abbott’s Covid-19 antibody test. In addition, AHA plans to soon add Covid-19 testing capabilities to its labs in Atlanta and Cincinnati, according to CEO Chris Martin. AHA is currently performing an average of roughly 100 PCR-based Covid-19 tests per day and 350 antibody tests. Martin expects AHA’s Covid-19 testing volume to expand rapidly in the coming weeks.

BioReference Labs
To date (through May 6), BioReference has performed approximately 700,000 PCR-based Covid-19 tests, is currently performing about 20,000 tests per day, and plans to reach 40,000 by the end of the month. In late April, BioReference started offering Covid-19 antibody testing. Capacity is currently 20,000 tests per day and is expected to reach 400,000 tests per day in June, according to Jon Cohen, MD, Executive Chairman of BioReference Labs. Roche will be the primary antibody assay used by BioReference.

LabCorp Reports First-Quarter Results

LabCorp Reports First-Quarter Results

LabCorp Reports First-Quarter Results

LabCorp reported a net loss of $317.2 million for the three months ended March 31, 2020, down from net income of $185.6 million in the same period a year ago; revenue was up 1.2% to $2.824 billion. A summary of key topics discussed by CEO Adam Schechter and CFO Glenn Eisenberg on an April 29 conference call follows.

Diagnostics Division
LabCorp’s Diagnostics Division reported a 1.2% decline in revenue to $1.702 billion. Volume decreased by 4.4%, including an organic volume decrease of 6.1%, partially offset by acquisition volume of 1.6%. LabCorp’s requisition volume is currently down by roughly 50% to 55% versus the company’s normal preCovid-19 crisis volumes.

Increased demand for Covid-19 testing is marginally offsetting the loss in routine test volumes, according to Schechter. He said that LabCorp is currently able to perform more than 60,000 PCR-based Covid-19 tests per day, or 1.8 million per month, and is seeking to expand to over 100,000 tests per day.

LabCorp’s primary PCR-based Covid-19 testing locations are Burlington, NC; Indianapolis, IN; Phoenix, AZ; and Raritan, NJ. LabCorp is performing the majority of its testing on analyzers from Thermo Fisher and Roche, in addition to the Hologic Panther Fusion System. “The issue that you run into is you need additional machines and you can imagine there’s lots of back orders and you know doing these RNA tests and the PCR test takes a lot of equipment. But we’re going to try to build to get to over 100,000 as quickly as we can,” said Schechter.

Home Sample Collection Kits
LabCorp launched its Covid-19 at-home self-collection kits through its branded Pixel service in late April. The kits allow patients to swab their own nasal passages and mail the samples back to LabCorp for PCRbased Covid-19 testing. The service is currently available only for healthcare workers and first responders who have Covid-19 symptoms. To obtain a collection kit, an individual must first fill out an online questionnaire, which is then reviewed and authorized by a physician. LabCorp will bill private insurance or utilize federal funds to cover the upfront cost of the test, while self-paying customers pay $119. LabCorp intends to make the collection kits available to all consumers in the coming weeks. However, the service is not available in MD, NJ, NY, and RI, due to state restrictions.

Covid-19 Antibody Testing
LabCorp can currently perform more than 50,000 Covid-19 antibody tests per day and expects to increase its capacity to over 200,000 tests per day by mid-May. LabCorp is using Abbott’s antibody test. “When you think about those numbers, over 200,000 tests today in serology and maybe 100,000 tests over time for PCR, it’s still a very small number compared to the 530 million or so tests that we do across all of our testing [pre-Covid-19]. So unless we start to see that come back, it will be hard for these tests to make up for the difference in what we’ve seen since the last weeks of March,” according to Schechter.

Accounts Receivable
LabCorp said that, as a result of increase in unemployment and the potential financial difficulties of medical practices from the impact of the Covid-19 crisis, it took a first-quarter charge of $17 million to increase its accounts receivable reserves.

Cost Cutting

Some of the actions that LabCorp has taken to help offset the impact of Covid-19 include employee furloughs, delays in new hiring, reducing temporary and contract workers, and suspension of merit pay hikes
and 401(k) plan contributions.

The CARES Act
LabCorp received $56 million in April through the CARES Act, which the company is using to ramp up
its Covid-19 testing capacity