A birdseye view of a group of people sitting at a table with computers and tablets.

A number of laboratories are becoming more proactive in the services they offer to clinicians, said Andrew Fletcher, MD, MBA, CPE, CHCQM, FCAP, founder of Eutiologic Consulting in Salt Lake City, a consulting company focused on laboratory stewardship and quality. Fletcher advocates for labs to figure out ways they can provide added value not only to providers, but also to managed care companies.

“Labs tend to look inward at ourselves. We’re not good at looking outward and seeing the bigger picture,” said Fletcher, who worked at ARUP Laboratories before starting Eutiologic. “We need to ask ourselves: How does the laboratory affect the cost of care? How do we take it to another level? How does the laboratory drive the cost of care for the entire healthcare system?”

Jon Harol, president of Lighthouse Lab Services, a consulting company based in Charlotte, North Carolina, agreed, noting that labs already provide a lot of value to the health system, but they need to be able to demonstrate it and tie it to healthcare outcomes.

“Labs need to do a better job of advocating for the value that they bring to healthcare, and they need to speak the language of healthcare outcomes,” he said.

Fletcher’s own experience demonstrates that laboratory intervention can be helpful in improving care and reducing costs in many different areas, including shortening length of stay, both for inpatients and in the emergency department (ED). While working at ARUP, he realized that for patients coming to the ED for chest pain, providers often were running creatine kinase-MB tests every 8 hours—when the patients first arrived and twice more over the next 16 hours. However, because of Medicare rules regarding observation, part of that time when patients were in the ED was not reimbursed.

Fletcher recommended that the ED use cardiac troponin tests instead, which are run every three hours (hours 0, 3, and 6). This allowed for faster diagnosis and reduced the time that patients spent in observation. High-sensitivity troponin tests, which can be run every hour, can save even more time and result in an even quicker diagnosis, thus improving patient outcomes.

“The laboratory actually helped shave time off the length of stay,” Fletcher noted, adding that these types of initiatives give labs leverage when it comes time to make decisions about budgeting within a health system or even in contract negotiations with payers.

“Most of the time labs don’t have a seat at the table when it comes to decision-making in the hospital,” he said. “But if the lab can actually show data on how they reduced length of stay and saved money for the system, they can get a seat at the table.”


TriCore in Albuquerque, New Mexico, is one of the labs leading the way in leveraging clinical laboratory results to improve patient care. The Rhodes Group, an analytics company owned by TriCore, works with managed care organizations to provide laboratory-generated clinical insights into specific conditions and to help the payers improve the health of certain populations.

In the area of prenatal care, for example, Rhodes conducted a study over 11 months to examine the benefit of laboratory-generated clinical insights on prenatal care quality metrics and clinical outcomes, explained Richard VanNess, Rhodes director of product development. Measures included early identification of pregnancy and births to facilitate care, care gaps with prenatal laboratory testing, ED visits, preterm births, and neonatal intensive care unit (NICU) admissions and length of stay.

Once Rhodes helped to identify gaps in care, payers were able to work with providers to ensure that those gaps in care were closed, resulting in improved outcomes, according to a study published in 2021. Women with ongoing prenatal care had fewer ED visits (17% vs. 23%) and NICU admissions (11% vs. 18%) compared with those without prenatal care.

“We are trying to leverage the lab’s data footprint to help close care gaps,” explained VanNess.

“Labs are in a unique position in America to have a positive impact on patient outcomes through their laboratory data.”

Not only does the Rhodes Group help close gaps in care for pregnant women and new mothers, but VanNess hopes the insights they are able to provide can help payers meet certain Healthcare Effectiveness Data and Information Set (HEDIS) targets, which would have both clinical and financial benefits.

For example, the Rhodes Group utilizes laboratory data analytics to identify diabetes screening care gaps for Medicaid patients who are being treated for schizophrenia and/or bipolar disorder and who are taking antipsychotic medications. Under HEDIS, payers are penalized if they fail to meet target screening goals (for 2023, the goal is to screen 82.78% of these patients).

“In New Mexico, payers struggle to meet the diabetes screening target for schizophrenia,” said VanNess. “Failure to meet these targets has significant cost implications to payers.”

VanNess has proposed to the payers that Rhodes Group and Tricore help identify patients who need screening and connect them with the appropriate testing. The managed care companies would pay the lab a set fee for specific outcomes and for helping them meet their HEDIS targets. Ultimately, such a collaboration would be a win-win-win situation for patients, TriCore, and payers, said VanNess.


Harol of Lighthouse Lab Services said that as federal payers move increasingly toward value-based care payment models where providers are paid a set fee for patient care, laboratory testing and data will become even more important than it already is. The challenge is that lab data can be difficult to put into forms that are useful.

“Showing that a test you provide now is going to help a patient a few years from now requires a lot of data collection, tracking, publishing. There’s a lot of work that has to be done to package that information,” he said. “It’s a heavy lift. There aren’t a lot of labs who are doing that.”

VanNess acknowledged that many clinical laboratories don’t have experience engaging with payers in this way, but he said it can be done.

“To be honest, I think a lot of labs are overwhelmed by the data,” he said. “We would like to teach other labs how to do this. It does take some investment and innovative thinking, but payers need these measurements in real time, and labs are in the best position to provide this kind of information.”

Fletcher agreed, noting that many laboratories are still “in the basement” and may be reluctant to approach payers or case managers to offer additional assistance in improving patient outcomes. “But some are starting to realize that maybe if I demonstrate my value to the healthcare system, I can get more allocated to the laboratory, and I can do more with the resources I have.”

“The lab has to be a little disruptive,” said VanNess. “You have to convince the payer that you deserve a seat at the table. Show them your data and what you can do for them. It’s a way to prove your value and might even help you become a preferred lab in some networks.”

Fletcher advises labs to approach case managers, ask about the biggest problems they are dealing with, and offer to help develop a solution.

“Explain to them that the lab isn’t going to solve all their problems, but we can help contribute to the solutions,” he said. “Labs can have a high-dollar impact, which in and of itself demonstrates the value of the laboratory.”

Kimberly Scott is a freelance writer who lives in Lewes, Delaware. +Email: [email protected]

The Role of Labs in MIPS

In addition to helping payers and providers in managing population health, clinical laboratories also can play a role in helping providers receive incentive payments under Medicare’s Merit-based Incentive Payment System (MIPS).

MIPS is part of Medicare’s Quality Payment Program, which rewards physicians for the value of care they provide rather than the volume of care they provide. Payment adjustments are based on performance points scored according to national benchmarks. Each performance year, an eligible clinician’s MIPS final score determines their future Medicare Part B payment adjustments.

“We work with a large managed care organization that decided it wanted to capitalize on its MIPS scores,” said Jon Harol, president of Lighthouse Lab Services, a consulting company based in Charlotte, North Carolina. “Lab testing was a big part of that. They increased testing for diabetes. They also used a lot of home testing to reach patients who were home-bound. The physicians were all a part of that, and it helped them improve their MIPS incentive bonus.”

Although it seems likely that the MIPS system will continue, a study published Dec. 6 in the Journal of the American Medical Association calls into question whether the program is working as intended (JAMA 2022; doi:10.1001/jama.2022.20619). Researchers analyzed more than 80,000 primary care physicians enrolled in MIPS and concluded that the program’s accuracy in identifying high-versus-low performing providers was really no better than chance.

The researchers are not certain why MIPS scores may not capture clinical performance. However, they suspect there is inadequate risk adjustment for physicians who serve more medically complex and socially vulnerable patients, and that smaller, independent primary care practices have fewer resources to dedicate to quality reporting, leading to low MIPS scores.

“MIPS scores may reflect doctors’ ability to keep up with MIPS paperwork more than they reflect their clinical performance,” wrote Amelia Bond, PhD, an assistant professor of population health sciences at Weill Cornell Medicine in New York City and author of the study.