CLN Article

Lab Formularies: The Time Is Now

Bench Matters: February 2015

Cheryl Caskey, MLS

Should hospital laboratorians develop formularies like our pharmacy colleagues did years ago? The impetus for pharmacies to develop formularies was to contain costs by having physicians order generic drugs rather than specialized drugs. What is a laboratory formulary? In simple terms, it is a list of tests physicians can order. Why would a laboratory want to consider this approach? In the current healthcare environment, laboratorians need to reconsider their roles in healthcare organizations. However, since there are no generic laboratory tests, the impetus for a laboratory formulary cannot be the same as it was for the pharmacy.

A major laboratory incentive to develop a formulary should be to limit inappropriate ordering of expensive molecular, genomic, and other esoteric tests. Lab formularies also hold the line on: utilizing diagnostic tests suboptimally—i.e., ordering an old test when a newer, better test is available; ordering tests found valuable in research but without extensive clinical validation or no documentation of improved diagnostic value versus existing tests; and adding a new, improved test to a panel without replacing an existing panel test.

Many feel developing laboratory formularies would defy the laboratory professional stereotype. But consider this: hospital pharmacies once were treated as a back office function that just supplied drugs and gave doctors what they wanted—not unlike many laboratories today. Over time, pharmacies developed formularies in collaboration with physicians and now pharmacists influence drug orders. Today laboratorians can and should be making a difference in optimal laboratory test ordering.

Laboratory professionals should be fully engaged in test ordering; we need to be able to question test requests, suggest appropriate tests, and cancel inappropriate tests. All members of the lab staff have valuable contributions to make to this effort. 

Getting Started

So how does one start the process of developing a lab formulary? There’s no single magic step—a multi-pronged approach is the only way to go; however, collaboration is essential. Clinicians, laboratory professionals at all levels, clinically engaged pathologists, and the laboratory director must be involved. Education of all parties is another must. Everyone involved must understand how the test cycle works, know the roadblocks in the cycle, and how to overcome them. Physicians in particular also need a core knowledge of and competency in ordering tests correctly.

Beyond these broad considerations laboratorians have some particular responsibilities in influencing test ordering and working towards a formulary. One important action would be redesigning the lab requisition. Is the general requisition current and with limited esoteric tests? Tests should be organized by disease state or order patterns, and test bundling should be minimized. The lab also needs to establish a process to review new tests requested—they should only be ordered when data indicates their utility.

Another step along the way to developing a formulary is to review existing standing orders and consult with physicians to see how they are used in clinical practice. In addition, labs should set up an approval and cancel test process for certain tests to ensure that they are ordered only when medically necessary. The same applies to send-out tests. Labs also need to take a look at how they report results, adding information as necessary to assist physicians with clinical interpretation.

A Look at Different Models

Laboratories are just starting to implement formularies, and there is not an extensive literature about this topic. One model involves a tiered approach in which one tier of tests is available to all physicians, a second tier is open to subspecialists, and a third tier—while not impossible to order—requires committee review/approval.

Other hospitals rely on their computerized physician order entry (CPOE) and electronic health record systems to hold the line on test utilization. After educating physicians, these institutions implement electronic-based barriers to ordering certain tests, with their main strategy being not having tests on the menu that should not be there, and reducing the overall inpatient test menu.

These hospitals also use CPOE and lab information systems to monitor utilization trends closely for problems and to spend a lot of time with specialty groups regarding those problem areas. CPOE systems also have been used like an electronic gatekeeper, to prohibit certain test orders unless required pre-requisite test results indicate the need for a particular test.

Another strategy relies on using financial cutoffs for referral testing. This approach counts on the laboratory to be active in test utilization starting with the referral menu. For it to work well, laboratorians have to be educated to communicate more effectively with physicians. The goal is not to lean heavily on physicians about ordering unnecessary tests, but rather to ask how a particular test will influence patient management. If an in-house, less expensive test is available then the lab provides ordering options.

Some organizations have taken the tack of combining CPOE-guided test selection, one-on-one education with physicians, and cost limits for send-out tests. The focus here is on perfecting CPOE order sets so that test selections are offered based on patient symptoms, episodes, or upon admission with certain diagnosis codes. Only appropriate tests appear online for the specific scenario. These online order sets emanate from evidence-based best practices. Of course, physicians still can access the full test menu, but it is harder than normal to do. The fact is, Medicare and other payers are increasingly targeting over-utilization and there is a need for laboratories to curb costs. Forward-thinking laboratorians will take advantage of this environment and make the laboratory part of the solution.

Cheryl R. Caskey, MA, MLS, is compliance officer at Omega Diagnostics in Shreveport, Louisiana.
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