The cold war between hospital laboratories and the nation’s third largest health insurer, UnitedHealthcare (UHC), over reimbursement of diagnostic tests is getting hotter by the day. At the center of the conflict is a controversial new UHC policy that would require laboratories to meet the standards of its homegrown provider care quality and efficiency program to qualify for reimbursement. Hospitals are pushing back against the policy and have now asked the federal government to intervene in the dispute. The Reimbursement Challenge Payors of all stripe have a rich tradition of griping about the high costs of laboratory tests. A turning point came in 2014 when Congress enacted the Protecting Access to Medicare Act (PAMA) to mandate imposition of a market-based pricing regime for Part B Medicare laboratory test reimbursement. Although the laboratory industry embraced the concept of market-based pricing, it recoiled at the distorted methods that CMS used to implement the scheme. By excluding hospital laboratories from the calculation of market price, the CMS PAMA system artificially and unfairly slashed reimbursement rates across the board. PAMA proved to be a double whammy for laboratories to the extent it inspired private payors to implement their own aggressive reimbursement systems. In many […]