Lab Network Guides Standards, Collaborates with Payors to Drive Reimbursement

NEW YORK (360Dx) – Five years ago, three lab professionals at Seattle Children's Hospital formed a cooperative group aimed at helping laboratories in pediatric hospitals improve test ordering. Today, that cooperative group has expanded outside pediatrics and evolved into Patient-centered Laboratory Utilization Guidance Services, or PLUGS, a lab industry network that drives laboratory stewardship standards and work with payors on lab test reimbursement.

"Basically our main mission is to have a national impact on improving test ordering, interpretation, retrieval and reimbursement. Those are the main aspects that you want to go right when you are ordering laboratory tests," said Jane Dickerson, clinical director of PLUGS and director of a chemistry lab and reference lab services at Seattle Children's Hospital.

Dickerson cofounded PLUGS with Jessie Conta, a genetic counselor and lab supervisor at Seattle Children's Hospital, and Michael Astion, medical director of the department of laboratories at Seattle Children's Hospital. PLUGS currently has 80 members, including some large healthcare systems, putting the number of hospital represented by the group at more than 150. Membership is also open to non-hospital labs, such as reference labs.

PLUGS' efforts include what the group calls insurance advocacy, which involves working with payors to match payor reimbursements with best practices in laboratory test ordering, according to Conta, who serves as director of genetic counseling services for PLUGS.

"What we really want to do, and what I think is really powerful about PLUGS, is align with payors to make sure we are looking from the same direction, and to make sure we are getting rational policies to get tests covered," Conta said. "We can agree there are limited resources, so certain tests probably aren't appropriate. It's having the right processes in place to catch them."

The effects of PLUGS' insurance advocacy work can be seen in the group's efforts related to whole-exome sequencing, she said.

"It's a great, exciting genetic test. It can give helpful diagnostic answers to families, but it's pretty expensive and in many eyes of the payers it can be seen as experimental and investigational," Conta said.

PLUGS drafted a policy for coverage of children who could benefit most from whole-exome sequencing and took it to EviCore Healthcare, a lab benefit manager that contracts with insurers to guide coverage decisions, according to Conta. EviCore, at the time didn't have a policy related to whole-exome sequencing, which meant those tests were being denied.

"We proposed something to them that wasn't going to give testing to everyone, but certainly gave it to more than we were getting previously," Conta said.

EviCore modified the coverage policy that PLUGS drafted, and then implemented it, according to Conti.

"Any of the payors they are working with are able to use that policy to now get testing for kids who were otherwise having it denied previously," she said.

While whole-exome sequencing can be used for adults, the policy that PLUGS and EviCore collaborated on is designed for children up to the age of 21. It was designed to have the most diagnostic yield and aligns with the practices of other payors who cover the test, according to Conti. Under the policy, some of the criteria for using the test includes working with a genetic counselor or geneticist, and using it in situations when other tests have failed to identify the cause of a condition, she said.

Lab Stewardship

Beyond insurance advocacy, PLUGS also aims to help labs adopt and implement stewardship policies to improve test ordering and interpretation, according to Dickerson. Just this fall, a 10-member national committee for lab stewardship within PLUGS released a set of lab stewardship standards intended to help labs establish best practices for lab testing.

Key elements of the group's lab stewardship standards begin with establishing a governance structure that has all the necessary subspecialties of ordering physicians represented, according to Dickerson.

"You need a reliable mechanism within an institution to have accountability and a place for escalation," she said.

The governance committee is tasked with helping an institution determine appropriate "intervention" policies for ensuring that the right tests get ordered, Dickerson said. Intervention policies might include adding alerts, or even hard stops in the institution's electronic health record system, or having specialists, such as geneticists review lab test orders to make sure they meet criteria established by the institution.

Other parts of the group's lab stewardship standards include recommendations around extracting lab data from health systems in an actionable way, and recommendations for continuing to review the lab stewardship policies that are in place to ensure they have the desired effect, Dickerson said.

PLUGS also works with member institutions to help ensure they have the basic infrastructure in place to ensure that proper governance can be implemented, Dickerson said. This can involve helping institutions understand the importance of identifying who from the IT department can implement intervention policies into the electronic medical record system, and assistance with establishing the right culture to ensure that policies are adhered to.

"It probably sounds obvious, but hospitals are big, and things get lost. With labs being only 4 percent of the healthcare budget, it is not top of mind. Standards are one way to help advocate for [test ordering] oversight measures and make sure they are given appropriate transparency, visibility, accountability and resources like a pharmacy would get," Dickerson said.

In fact, the amount of assistance institutions often need in organizing basic infrastructure requirements to set up lab stewardship programs has been one of the surprises of PLUGS' efforts.

"I think very early on when we started PLUGS we were really focused on doing test algorithms, or really specific test recommendations, or things like benchmarking, because that's what we thought people wanted," Conti said. "It became very apparent from the beginning that people had no system in place to support something like algorithms. We realized you have to start where people are. We have had our program in place for a while and have a lot of expertise that we can bring to the network."

Another surprise of the program, has been that physicians ordering lab tests have been very receptive to the program, Dickerson said.

"We were fearful both in our own institution and in PLUGS that the lab could be perceived negatively by putting processes in place to review doctors' orders or question and change their orders," Dickerson said. "Through our own survey that we implemented of our own physicians, that was also shared and completed by several PLUGS members, we found that providers were not as upset as we initially thought they might be, and in fact they appreciated the collaboration."

Key to working with ordering physicians has been ensuring that specialties are represented in the governance structure and given a voice in establishing test ordering policies that impact them, according to Dickerson.

In 2017, PLUGS had its biggest growth in membership yet, Conti said, and moving forward, PLUGS plans to continue to expand its role of encouraging collaboration among different stakeholders in lab testing, to include participation of patients in the discussion as well.

"What's unique about PLUGS is we are trying to reach a lot of different stakeholders. It's the lab administration, the hospital administration, the reference labs performing the tests, the insurance payors, the IVD companies, the doctors ordering tests," Conti said. "How can we get everybody all on the same page to believe that we have limited healthcare resources, and probably some people who want a test can't have it? How do we maximize who is getting it and when, and empower patients to be part of that conversation?"