America’s Fastest-Growing Labs

by Jondavid Klipp | Dec 22, 2020 | Laboratory Economics, Laboratory Market Research

America’s Fastest-Growing Labs

Phlebxpress (Temecula, CA) grew its Medicare Part B test service volume by 202% per year between 2015 and 2018, making it the fastest-growing independent lab company in America over the three-year period. Phlebxpress is a mobile phlebotomy company headquartered in Southern California that serves California, Nevada, and Texas. Its highest volume Part B test services included travel allowance (P9603 & P9604) and routine venipuncture (CPT 36415).

Two other mobile phlebotomy companies, Mobile Health Labs (Orlando, FL), up 63% per year, and Unique Lab Services (Fountain Hills, AZ), up 59% per year, rounded out the top three.

Two hospital-owned outreach labs, UCLA Outreach Clinical Lab (Panorama City, CA) and Pathology Laboratory (Ankeny, IA), owned by UnityPoint Health, were also among the fastest-growing lab companies.

Overall, some 2,900 independent clinical labs saw their Medicare Part B volume decline from 352.6 million test services in 2015 to 314.2 million test services in 2018. The decline was mostly driven by the introduction of new bundled codes for drug testing (G0480-G0483), which eliminated a large volume of individually billed drug tests.

Top 25 Fastest-Growing Labs by Medicare Part B Volume of Services

LabCorp Reports Full-Year 2019 Financial Results

by Jondavid Klipp | Feb 15, 2020 | Labcorp, Laboratory Market Research

LabCorp Reports Full-Year 2019 Financial Results

LabCorp (Burlington, NC) reported net income of $823.8 million for the full-year 2019, down from $883.7 million in 2018. LabCorp’s overall revenue increased by 2.0% to $11.6 billion in 2019.

Revenue from LabCorp’s lab testing business decreased by 0.4% to $7 billion in full-year 2019. This year LabCorp expects its lab testing business to increase its revenue by 0.5% to 2.5%. This guidance includes a -1.3% impact from PAMA and -0.9% from UnitedHealth’s nonrenewal of the BeaconLBS contract in Florida.

LabCorp expects revenue from its Covance Drug Development division to grow by 7% to 9.5% in 2020.

On February 13, LabCorp held a conference call with analysts and investors. Here are some comments on a few key topics from CEO Adam Schechter.

Impact from PAMA
Schechter said that the PAMA rate cuts reduced the company’s lab testing revenue by approximately $100 million in 2019. He expects a similar $100 million revenue loss from PAMA this year and again in 2021.

UnitedHealth’s Preferred Laboratory Network (PLN)
“I don’t assume there’ll be a significant shift [to PLN labs] in 2020 because they’re rolling it out as we speak….If it works for United, I think that other organizations may see this as an opportunity to help them reduce their laboratory costs by moving over business to a lab like ours.”

Hospital Lab Acquisitions
“As I look at the hospital tuck-in acquisitions, I can tell you that our list is long. There are many discussions that we’re having around the country with both local and regional labs and hospitals… I believe over time it [hospital lab deals] will begin to accelerate, particularly as they feel the continued impact from PAMA.”

Direct to Consumer Genetic Testing
“We saw a significant decline in 2019 versus 2018. It’s now a very small amount of our total volume and of our total revenue and operating income.” Laboratory Economics notes that LabCorp has had a contract to provide genotyping services to 23andMe Inc. (Sunnyvale, CA) since 2008. After years of strong demand for
its ancestry and health testing services, 23andMe recently laid off 100 employees, or 14% of its workforce, citing a slowdown in consumer demand.

Laboratory Economics Issues Research Report on U.S. Anatomic Pathology Market

by Jondavid Klipp | Sep 23, 2019 | Laboratory Economics, Laboratory Market Research

Laboratory Economics Issues Research Report on U.S. Anatomic Pathology Market

The publisher of Laboratory Economics has just released The U.S. Anatomic Pathology Market: Forecast & Trends 2019-2021. With this special report, you can tap into 150 pages of proprietary market research that reveals critical data and information about key business trends affecting the anatomic pathology market.

The report reveals that the anatomic pathology market (including Pap testing) now represents an estimated $18 billion of revenue with an annual growth rate of 3-4%. All data and trends are fully explained throughout the report, including 10-year historical data and a detailed three-year forecast.

The U.S. anatomic pathology market endured intense reimbursement pressure between 2013 and 2017. “However, the Medicare program has completed its evaluation of payment rates for all the key pathology codes and the reimbursement environment now appears stable,” according to Jondavid Klipp, Publisher of Laboratory Economics. “Furthermore, the introduction of new higher-priced molecular oncology tests linked to targeted cancer drugs is driving volume trends higher. As a result, the outlook for the U.S. anatomic pathology market is the best it’s been in the past 10 years.”

The report includes:

More than 100 charts and graphs
Industry size and growth rates
Detailed estimates for market subsets like prostate cancer testing, dermatopathology, lymphoma/leukemia and gastrointestinal
pathology
Medicare claims data for 60 key pathology codes
Cervical cancer testing trends and pricing data
In-office histology lab trends
Detailed analysis of the digital pathology market
Results from Laboratory Economics’ exclusive Anatomic Pathology
and Clinical Lab Trends Surveys from 2007 through 2019

Anatomic pathology companies featured in this report include: Aurora Diagnostics, Bako Diagnostics, CellNetix Labs, Exact Sciences, Genomic Health, InformDX, LabCorp/Dianon, Myriad Genetics, Mayo Clinic Labs, NeoGenomics, OPKO/BioReference Labs, PathGroup, Pathology Reference Laboratory, Poplar Healthcare, ProPath Services, Quest Diagnostics/AmeriPath and Sonic Healthcare USA.

The U.S. Anatomic Pathology Market: Forecast & Trends 2019-2021 is published by Laboratory Economics (www.laboratoryeconomics.com), an independent market research firm focused exclusively on the business of pathology and laboratory medicine.

Contact Information
Contact: Jondavid Klipp, President
Laboratory Economics
195 Kingwood Park
Poughkeepsie, NY 12601
Phone: 845-463-0080
www.laboratoryeconomics.com

Technical Rates for Many Pathology Services To Get Small Boost Under Proposed MPFS

by Jondavid Klipp | Aug 15, 2019 | Laboratory Market Research

Technical Rates for Many Pathology Services To Get Small Boost Under Proposed MPFS

The Proposed Medicare Physician Fee Schedule (MPFS) for 2020 includes a 5% hike to the technical component for CPT 88305, which, if finalized, would raise it to $32.12. Meanwhile, the rate for the professional interpretation is being lowered by a proposed 1% to $39.34. Overall, the global rate for CPT 88305 will increase by a proposed 2% to $71.46.

In general, technical component fees for many key surgical pathology
services (e.g., CPT 88305, 88307 and 88309) and special stains (e.g., CPT
88312 & 88313) are proposed to increase, while most professional interpretation rates are set for no change or small reductions.

Meanwhile, a few areas where pathologists and labs will see significant
rate reductions are cytopathology, flow cytometry and prostate biopsies.

Top 20 Medi-Cal Laboratories

by Jondavid Klipp | Jun 15, 2019 | Laboratory Market Research, Medi-Cal

Top 20 Medi-Cal Laboratories

The largest Medi-Cal lab provider is The Genetic Disease Screening Program (GDSP) of the California Department of Health, which received $29.5 million of Medi-Cal FFS payments in calendar year 2018, according to the latest available data from DHCS. The Genetic Disease Screening Program provides prenatal and newborn testing services to Medi-Cal recipients.

Quest Diagnostics is second largest, with $29.4 million of Medi-Cal FFS payments. Planned Parenthood, which tests for sexually transmitted diseases, received $24.7 million, followed by LabCorp at $8.8 million.

The largest academic medical centers and hospital outreach labs on the list are Dignity Health, with $3.3 million of payments, followed by Children’s Hospital of Los Angeles, $2.5 million, and Loma Linda University, $2.2 million.
In total, the top 20 lab organizations collected $127.9 million of Medi-Cal lab test payments for FFS patients in 2018.

Special New Year’s Report: Lab Execs Share Outlook for 2019

by Jondavid Klipp | Jan 14, 2019 | Laboratory Economics, Laboratory Market Research, Laboratory Outlook

Special New Year’s Report: Lab Execs Share Outlook for 2019

For an inside look at what may be in store for the clinical lab and pathology business this year, Laboratory Economics interviewed the top executives at a diverse group of 10 lab companies.

Not surprisingly, our interviews revealed that commercial insurers are using Medicare’s repricing of the CLFS as a pretext to cut their own rates. What is surprising (and alarming) is that some commercial insurers have demanded the full three-year phased-in ~30% CLFS reduction applied to their rates upfront immediately.

Labs are hoping to offset the pricing pressure by gaining economies of scale through geographic and test menu expansion. On the brighter side, the extreme pricing pressure that terrorized technical services for anatomic pathology seems to be over. Furthermore, molecular diagnostics and prescription drug monitoring continue to be high-growth markets.

Pricing pressure from both Medicare and commercial insurers
High volume growth in molecular diagnostics and prescription drug monitoring
Anatomic pathology reimbursement rates have stabilized
Hospital outreach labs benefiting from health system acquisitions of physician practices
Nursing home labs are restructuring and consolidating

Companies profiled in the January 2019 issue of Laboratory Economics include Sonic Healthcare USA, NeoGenomics, Health Network Laboratories, CellNetix, TriCore Reference Labs, Enzo Clinical Labs, Clinical Laboratory Services, CellMax Life, Psychemedics and Wisconsin Diagnostic Labs.