As UHC limits OON lab services, questions arise surrounding timing

August 24, 2020

At a time when patients and providers alike are being severely impacted by the COVID-19 Public Health Emergency, UnitedHealthcare (UHC) has taken the opportunity to push some aggressive policy changes to limit care — all while reaping record profits.

As of July 1, most UnitedHealthcare commercial members no longer have benefits for out-of-network (OON) Laboratory, Dialysis and Durable Medical Equipment services. Physicians are now required to obtain a patient’s consent when involving a OON provider for non-emergent services. Failure to do so will could put you in violation of your contract and could result in a host of penalties, including a lowered fee schedule or termination of your contract.

MORE: View the full bulletin from UHC.

MORE: Download the member consent form required for OON referrals (PDF).

When considering this change alongside UHC’s introduction of its new Lab Test Registry that will roll out on Jan. 1, 2021, it’s hard not to feel like providers are being made to jump through hoops during a vulnerable time, says Mick Raich, CEO of Vachette Pathology.

“The new rules basically say if a referring physician sends work to an out-of-network laboratory, then the patient must sign a form allowing this to take place — basically this is an ABN for out-of-network work,” Raich says in regard to the new OON policy. “UHC has leveled several consequences for those who don’t play nice, including the option to terminate the referring physician’s contract or making the patients pay out-of-pocket costs. This will tighten up the network referral patterns even more and make it harder for out of network laboratories to see these patients.”

Vachette also reached out to Matthew Zaborski, Assistant Vice President of Sales and Marketing at APS Medical Billing, to discuss how their clients have been impacted by these recent changes and to get his thoughts on what’s spurring them.

  • What was your initial reaction to the out-of-network policy change? How have clients responded?

Zaborski: My initial reaction to this policy is that it is rather restrictive and broad in its application, given the different settings where laboratory services are delivered. This payer, along with others, has traditionally kept narrow networks, particularly when it comes to outpatient and non-hospital patient care. Penalizing referring physicians for use of providers they trust to provide timely and high-quality service may be within their contractual rights, but also allows them to basically regulate the industry. There are also many instances where advanced studies are available that could make a major impact on patient care and outcomes, but are only offered at out-of-network laboratories. Ultimately, pathology groups and independent laboratories need clear communication with referring providers on network status to help them stay compliant. This may be easier said than done, especially for a hospital based group who may not know when new outpatient and outreach volumes funnel into their laboratories. These providers need to work closely with laboratory and key health system contacts to ensure the referring providers are aware of all contractual concerns.

  • Are you surprised UHC would make a change like this in the middle of a public health emergency, especially when many patients could be utilizing OON lab services for covid testing?

Zaborski: Considering how vulnerable so many American’s feel today, it does seem like pretty poor timing to pull out-of-network benefits from their plan provisions. There is legislation that requires insurers to cover COVID testing with no cost sharing specifically and disallows balance billing by providers. Because of this, patients are protected from the cost related to use of OON laboratories for these purposes, but that doesn’t even cover the entire episode of care. It is counter intuitive to have the government indicate it wants access to testing for all Americans, expedited approval of tests, a push of these tests into the market at as many locations as possible; but have this carrier strip benefits from its members. This certainly is not putting patients over paperwork. Considering UHC’s other policies with delayed implementation due to the public health emergency, this seems like it should have been considered in the same light.

  • Along with the lab test registry that will go into effect next year, UHC seems to be aggressively instituting new policies that are narrowing its network and restricting services. Why do you think they’ve become so emboldened as of late and do you anticipate other commercial payers will follow suit with similar policies?

Zaborski: I think one of the largest contributing factors to their restrictive policies is the continued movement on the surprise bill front. In many cases, providers have lost the leverage of being out of network due to the laws not protecting their interest. Most states have some sort of protection for patients, but many states have very restrictive laws that tie a provider’s hands when trying to secure fair contracts and fee schedules for their services. Small- and medium-size independent laboratories have felt the pinch for some time since they have had to accept sub-par rates just to get in network due to national labs undercutting the market. This is assuming the payer will let them in at all. A few years back, we saw exclusive contracts with national labs being terminated by UHC and other major payers, who then contracted with the other national labs and established a larger footprint. This has gone a long way to allow the payers to cite network adequacy. Unfortunately, laboratory medicine and pathology practices don’t all fit the same mold. The case mix at the large laboratories does not mirror that of a hospital-based group, so you have large labs setting market prices while their resources are not being stretched on a per-case basis. In other words, all 88305s are not created equal, and therefore their RVU output and its value is not either.

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