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CUSTOMER
TriCore Reference Laboratories
CHALLENGE
Increase the value of clinical labs for care teams and payers across the continuum of care.
OUTCOME
Analytics using patients’ real-time longitudinal laboratory results, and claims data, yielded
higher value information and new revenue streams for TriCore.

TriCore Reference Laboratories Transforms to the Clinical Lab 2.0 Model with InterSystems HealthShare and Rhodes Group Software

Clinical reference laboratories perform about 13 billion diagnostic tests in the U.S. each year. It’s estimated that such tests impact specialty care decisions as much as 66% of the time1.

The labs performing these tests are vitally important to the healthcare system. Yet labs are traditionally viewed not as an integrated and valued member of the care team, but as a commodity due in large part to their occupying only 2% of healthcare spending2. This perception is reflected in decreasing payments for lab services.

The Centers for Medicare and Medicaid Services (CMS), through the Protecting Access to Medicare Act, is cutting reimbursement for laboratory tests by 10% in 2018, 2019, and 2020. It then cuts an additional 15% the next two years. For most labs, already operating on thin profit margins, this is an existential threat.

TriCore Reference Laboratories, a clinical lab serving the State of New Mexico, didn’t want to just remain viable by cutting costs. Instead, TriCore is transforming to a Clinical Lab 2.0 business model, with extended services to increase its value and revenue as an integrated member of the care team. This transformation relies on InterSystems HealthShare® and software solutions from TriCore’s Rhodes Group division.

Real-Time Data and Lab Analytics Improve Outcomes

“Business as usual is not an option for clinical labs. We have to change and change how we’re perceived and compensated to survive.”TriCore’s Rhodes Group software currently uses HealthShare Health Connect as its interoperability engine. Rhodes will be using other HealthShare solutions and InterSystems IRIS Data Platform™ as its innovation and technology platform. HealthShare will aggregatea patient’s longitudinal laboratory test results in real time from TriCore’s labs across New Mexico, combine it with claims data, and normalize it all into a unified care record. HealthShare’s ability to transform diverse data into a single, consistent format is critical for analytics and TriCore’s value proposition. TriCore can provide more timely and actionable insights into a patient’s or population’s current health status across the care continuum. For payers, it is a deeper perspective than their own systems can provide.

To support this claim, TriCore completed a pilot program with a major, statewide payer and Medicaid Managed Care Organization (MCO) in New Mexico. The program focused on an acutely time-sensitive specialty — prenatal and postpartum care — with the goal of improving care quality and performance measures.

Real-World Proof

An Institute of Medicine report3 estimated that in 2005 the economic burden associated with preterm birth in the U.S. was at least $51,600 per infant, or $26.2 billion total. In light of possibly catastrophic outcomes, the societal and personal costs of pre-term birth, and the costs shouldered by payers and at-risk providers, the TriCore pilot program results were striking. They will be published in 2019. The results quoted below focus on identification of individuals in need and gaps in care, and outcomes of the study.

Identification

  • 65% of the women identified as pregnant by TriCore were not so identified in the MCO claims data
  • 79% of the pregnant population were identified as having gaps in care (often by first determining gestational age)
  • 50% of the pregnant population were identified as not receiving care
  • 77% of all pregnant mothers were found in the first trimester

Faster identification of pregnant MCO members made it easier to enroll those patients in proper prenatal or postpartum care programs within the time-frame required by Healthcare Effectiveness Data and Information Set (HEDIS) performance measures. Examples include the percent of members receiving prenatal care in the first trimester, and those receiving postpartum care within 56 days of delivery.

Outcomes

  • 33% reduction in neonatal intensive care unit occupancy rate
  • 40% reduction in pre-term births compared to the control group
  • 10% reduction in emergency department visits

Many patients visit multiple providers who may request their own tests, creating a complicated and difficult-to-analyze information environment for payers and at-risk providers. TriCore is now in a unique position to help improve outcomes through clinical analytics and communication with providers.

Reduced Risk for Care Teams, New Revenue for Labs

$4,384,801 in direct savings and penalty avoidance for one New Mexico MCO in one year makes a strong case for the value of clinical reference lab analytics.Using the most conservative estimate of costs, TriCore projected significant savings for its MCO customer in the pilot:

  • $2,278,348 saved due to the reduction in pre-term births, based on an individual cost of $33,096 per year4
  • $510,203 saved due to reduced neonatal intensive care unit occupancy
  • $56,250 saved due to reduced emergency department use
  • $1,540,000 in penalties avoided by achieving New Mexico Medicaid performance objectives5

Payers and providers in at-risk contracts need help demonstrating better outcomes and performance measures. Labs like TriCore, with software from Rhodes Group, can deliver this help while creating new revenue streams not tied to the standard Medicare fee schedule and lab service agreements. “A major MCO told us that our data is better than theirs,” says Dr. Michael Crossey, TriCore CEO & President, “and they have invited TriCore to be part of their value-based care negotiations.”


1 Ulrich-Peter Rohr, Carmen Binder, Thomas Dieterle, Francesco Giusti, Carlo Guiseppe Mario Messina, Eduard Toerien, et al: The Value of In Vitro Diagnostic Testing in Medical Practice: A Status Report. PLOS ONE 11(3): e0149856, doi:10.1371/journal.pone.0149856. March 4,
2016.
2 Medicare Payment Advisory Commission: A Data Book: Health Care Spending and the Medicare Program, June 2016
3 Behrman R, Butler A, (representing the Committee on Understanding Premature Birth and Assuring Healthy Outcomes): Preterm birth, causes, consequences, and prevention. Washington (DC): Institute of Medicine, The National Academies Press; 2007.
4 Thanh NX et al. Health Service Use and Costs Associated with Low Birth Weight-A Population Level Analysis. (2015) J Pediatr. 167(3): 551-55
5 NMHSD Amendment #8 to the Medicaid Managed Care Agreement Among NMHSD and HCSC http://www.hsd.state.nm.us/uploads/files/Looking%20For%20Information/General%20Information/
Contracts/Medical%20Assistance%20Division/MCOs%20-%20Centennial%20Care/BCBSNM_CONTRACT_AMENDMENT_%238_SIGNED.pdf (Accessed: June 7, 2018)

“Business as usual is not an option for clinical labs. We have to change and change how we’re perceived and compensated to survive.”

Sam Merkouriou
Vice President, Rhodes Group

$4,384,801 in direct savings and penalty avoidance for one New Mexico MCO in one year makes a strong case for the value of clinical reference lab analytics.

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