Journal of Clinical and Laboratory Medicine

Sci Forschen
Open HUB for Scientific Researc h ISSN 2572-9578 | Open Access

REVIEW ARTICLE Volume 4 - Issue 1

Use of Laboratory Decision System as a Test Utilization Management Tool in

Clinical Settings, Current and Future Perspectives
Lucas Leblow1, Timothy Hamill2, and Safedin H Beqaj3,*
1
Laboratory Decision System, Medical Database, Inc, California, USA
2
UCSF Department of Laboratory Medicine, San Francisco, California, USA
3
Universal Diagnostic Laboratories, Van Nuys, California, USA

*Corresponding author: Safedin H Beqaj, Universal Diagnostic Laboratories, Van Nuys, California, USA, E-mail: [email protected]

Received: 14 Jul, 2019 | Accepted: 30 Aug, 2019 | Published: 05 Sep, 2019

Citation: Leblow L, Hamill T, Beqaj SH (2019) Use of Laboratory Decision System as a Test Utilization Management Tool in Clinical Settings,
Current and Future Perspectives. J Clin Lab Med 4(1): dx.doi.org/10.16966/2572-9578.128
Copyright: © 2019 Leblow L, et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License,
which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

Abstract
Managing laboratory test utilization has been a growing problem for the healthcare industry for a long time. With an ever-increasing number of
tests, especially in the area of molecular genetics where per test costs are very high, inappropriate utilization is creating a financial burden on
healthcare overall. Several large healthcare institutions have made efforts to solve this problem and have developed their own test utilization
management approaches. These include, physician education, providing test pricing information, utilizing reminders in Computerized Provider Order
Entry (CPOE) systems and/or setting up committees to authorize the use of expensive or complex tests. While these approaches have achieved
some minor success in curbing test overutilization and generating cost savings, a robust automated Clinical Laboratory Decision Support System has
still been sorely lacking. We present, here, a newly developed Laboratory Decision System, LDSTM as a potential method to address test utilization
management in clinical settings. A study of provider and payer use of LDSTM revealed significant improvements in test ordering and management
on both sides: a significant reduction in unnecessary tests from the provider’s side and measurable improvement in medical necessity checks from
the payer’s side.

Introduction methods for reducing wasteful testing. A study published by the

American College of Physicians (ACP), in 2012, stemming the
Currently, physicians are challenged by a lack of access to
Tide of over treatment in U.S. Healthcare, explains “the impact
centralized information regarding thousands of available clinical
of unnecessary tests on healthcare cost totals up to $250 billion
laboratory tests [1]. A study conducted by the Common wealth
a year” [4]. Timely, relevant and actionable data is needed for
Fund Survey of Public Views of the U.S. Health Care System showed
that over 23% of tests ordered by physicians had previously been doctors to accurately order tests, and for labs and other rendering
performed. Such duplication increases the cost of care while further providers to deliver services efficiently and get paid in a timely
delaying or confusing the patient’s diagnosis and care [1,2]. Physician manner. Further, the rapid growth in molecular and genetic testing
uncertainty related to appropriate laboratory utilization was studied (welcomed new tools for diagnosis and disease management) poses
by the Center for Disease Control (CDC) in 2011. The study surveyed a challenge for both healthcare providers and for commercial
1,768 primary care physicians in the U.S and demonstrated that payers regarding proper utilization of these specialized tests.
14.7% had uncertainty in selecting and ordering the correct test and Given their relatively high cost, inappropriate use of these tests
8.3% had difficulty interpreting tests [3]. When these statistics are represents an additional financial burden on an already over-taxed
applied to over 300 million patient laboratory visits a year in the U.S, healthcare system [2,4,5].
inappropriate test ordering and interpretation potentially impacts 23 Since laboratory testing provides 70-85% of the objective data
million patients annually [3]. Such inappropriate test utilization has
upon which physicians base their diagnoses and treatments,
further downstream clinical and cost impact on our overall healthcare
laboratory diagnostics has become the single highest-volume medical
system. The survey also indicated that more than three-quarters of
activity in the U.S., with an estimated 4-5 billion tests performed
physician respondents indicated that consulting an expert, checking
annually [5]. Inappropriate testing consists of both over- and under-
e-references or specialist referrals was helpful in reducing uncertainty
utilization, which together can dramatically increase healthcare
in ordering and interpreting lab tests [3].
costs. Overutilization refers to tests that are ordered when not
For these and other compelling reasons, payers, particularly clinically indicated, while underutilization refers to tests that are
Medicare, are beginning to require standardization of practices and clinically indicated but not ordered. A Harvard Medical School 15-

J Clin Lab Med | JCLM 1

 Sci Forschen
Open HUB for Scientific Researc h
Journal of Clinical and Laboratory Medicine
Open Access Journal

year meta-analysis indicated that overutilization and underutilization utilization and, thereby, decrease unnecessary orders and cost [15]. For
of laboratory tests occurs 20.6% and 44.8% of the time respectively example, there is a 2015 “Advanced Imaging Bill” which mandates that
[6]. Inappropriate testing may lead to incorrect or delayed diagnoses government-approved imaging services will only be reimbursed if the
and treatments, which negatively impact patient recovery time and insurance claim confirms that appropriate-use criteria was consulted
associated costs. Test overutilization often increases the likelihood or a CDSS was used [17,18]. The Bill also recommends use of CDSS
of false-positive results which can result in incorrect diagnoses, for other diagnostic test ordering, if available. Accordingly, CDSS’s are
additional inappropriate testing, increased costs, and adverse outcomes currently available for cardiology, medication management, oncology
due to unwarranted intervention [6,7]. Additionally, a consequence and urology. These developments strongly indicate that there also is
of ordering tests which are not indicated often can be the failure to a substantial need for a laboratory CDSS to aid healthcare providers
order tests which are clinically ‘indicated’, further compounding in selecting and ordering laboratory tests and reducing inappropriate
the problem. Test underutilization can contribute to an increase in testing [11,12]. Currently, there are some partially developed and
morbidity due to delayed or missed diagnoses and, paradoxically, can semi-manual lab CDSS’s that help physicians order laboratory tests;
lead to downstream overutilization, again resulting in higher costs and however, these modules are provider-driven and require inconvenient
poorer patient care [2,7]. interactive user questions to access the information needed [9-
11,19,20]. In addition, these systems do not provide any scoring
With industry and governmental shifts from traditional fee-for- system for tests based on medical evidence, clinical relevancy and
service to value-based care, over/underutilization is a critical issue that medical necessity as used by radiology CDSS’s.
affects the bottom line with respect to increased costs and poor clinical
outcomes. In order to meet the goals of modern healthcare, medical Laboratory decision support system
providers and insurance payers are searching for solutions that will To address these challenges, Medical Database, Inc (MDB) has
help in making optimal decisions in the selection of diagnostic tests developed a laboratory decision support platform that includes an
and ensuring the appropriate utilization of laboratory resources. easy-to-use test ordering and utilization management application, also
known as the Laboratory Decision System or LDSTM. This platform
Current Approach to Test Utilization Problem
gives healthcare providers access to a systematic and in-depth resource
There have been several efforts by large healthcare institutions to assist in selecting and ordering the most appropriate laboratory tests
to counter test utilization problems. However, it is worth listing the using evidence-based guidelines and industry best practices. This data
main factors influencing ordering behavior: ease of ordering in CPOE, base is designed to aid physicians in better understanding, selecting,
ignorance of test characteristics, peer or supervisor pressure to be ordering, and interpreting the most relevant lab tests for their patient’s
extremely thorough, fear of litigation, impatience, desire for certainty condition. LDSTM also incorporates a proprietary “MDB Ranking
of diagnosis, financial incentives, and patient demand [2,5,8,9]. In System” which supports healthcare providers and care managers in
general, the overall management of these factors requires new tools, selecting the most relevant tests based on disease and/or ICD10 codes.
education, changes in habits and reward feedback loops [8,10-12]. Two The MBD Ranking System rates potential tests for any given disease
important studies that have attempted to analyze and solve the problem and assigns an easily interpretable numerical and color-coded score
of test utilization are the Veterans Affairs Hospital study [13] and the based on clinical relevance, medical necessity, and testing indication
Massachusetts General Hospital (MGH) study [8,14]. The Veterans (Figure 1). Tests with scores of 5 or above meet medical necessity, while
Affairs Hospital study managed test utilization by implementing a those with scores of 4 or less do not. LDSTM follows Medicare’s medical
modified and improved laboratory information system that allowed necessity guidelines by using testing indications such as “initial testing/
them to setup special rules, restrictions, reminders and notifications, screening” to allow providers to better characterize the patient’s
which lead to reduction in unnecessary tests and decreased cost [13]. disorder based on initial test results before ordering highly complex
The MGH study developed a laboratory utilization management and/or expensive tests [2]. Within the system, each test is linked to
program that required committee review and approval for test orders its appropriate Current Procedural Terminology (CPT) code(s), and
and acted as a ‘governor’ against practitioners ordering ‘inappropriate’ diseases, and each disease is linked to its applicable International
tests. This method is predictably costly as it necessitates the ‘hands- Classification of Diseases (ICD)-10 and Systemized Nomenclature
on’ participation of expensive experts including pathologists and of Medicine (SNOMED) code. Accordingly, when LDSTM solution is
genetic counselors in decision making and does not result in timely used to compliment an electronic medical record ordering system, the
responses [2,5,8,14]. Over burdened clinicians cannot afford to spend appropriate ICD10 and CPT codes can be sent directly with the order
large amounts of time tracking down a pathologist for an answer that for use in claims submission (Figure 1A). In addition, LDSTM has the
they often require immediately. Several other studies have used similar capability to help select appropriate tests for more than one disease
strategies to reduce unnecessary test ordering and cost reduction, (co-morbidity) in a single order when clinical indications exist (Figure
especially with respect to sending out tests which are often poorly 1A). This platform offers a timely and relevant test utilization solution
reimbursed, and, therefore, create financial burdens for many small
for physicians, hospitals and laboratory providers. It can also serve as
and large hospitals [8,15,16].
an expert reference tool for payers in medical review, pre-approval and
Future Approach to Test Utilization Problem claims verification programs. Lastly, each test entry has content that
describes test overview, test utility, interpretation, reference ranges,
Clinical decision support system sample collection, handling and test methodology (Figure 1B). This
Selecting appropriate medical tests is an ongoing and growing information can be used as a supportive, educational and consultative
problem in many specialties including radiology, cardiology, tool for physician to better understand and interpret test results
Pulmonology and pharmacology. Since radiology diagnostic imaging [11,12]. Since the platform can be interfaced with Electronic Medical
is more costly than laboratory testing, the U.S. government has Records (EMR), Electronic Hospital Records (EHR) and Laboratory
approved a reimbursement reward system for insurance providers that Information Systems (LIS), the content can be access directly through
utilize a Clinical Decision Support System (CDSS) to improve imaging these system and orders send directly to laboratories for testing.

Citation: Leblow L, Hamill T, Beqaj SH (2019) Use of Laboratory Decision System as a Test Utilization Management Tool in Clinical
Settings, Current and Future Perspectives. J Clin Lab Med 4(1): dx.doi.org/10.16966/2572-9578.128 2
 Sci Forschen
Open HUB for Scientific Researc h
Journal of Clinical and Laboratory Medicine
Open Access Journal

A B
Figure 1: Ordering test using LDSTM; A) ordering by disease or ICD10. In this example “Viral hepatitis type C was used. As shown, most specific
tests associated with the disease are listed and scored based on clinical relevance and medical necessity; B) ordering by test or procedure. In
this case Hepatitis C Virus Antibody test was used. As shown, most common associated diseases with the test are listed and scored based on
clinical relevance and medical necessity.

In order to qualify for reimbursement, every ordered test must ICD10 and compare to LDSTM medical evidence score and to CMS,
be submitted with the correct ICD10 and CPT codes to indicate and LCD and NCD policies and make a recommendation.
support clinical relevance and medical necessity. The LDSTM platform
can provide a comprehensive tool to assist billing staff and healthcare Reference Laboratory Study
insurance payers with this process. The platform allows evidence and A total of 96,170 laboratory orders with almost 374,423 test
knowledge-based content to be queried by SNOMED, ICD10, CPT or claims were analyzed from a reference laboratory. The average
disease/test description. These capabilities afford providers, payers and number of HCPCS (CPT) codes per order was 3.8. Of these, 814
clinical lab service provider’s further insight into the appropriateness tests were accompanied by an invalid ICD10 (i.e., an ICD10 code
of lab claim submission and reimbursement. that is not part of the most current ICD10 data set from CMS).
There is a possibility that some of these “invalid” ICD10 codes
Study supporting laboratory decisions system as a test
actually were valid at the time of the order. Furthermore, 44,671 tests
utilization management
or 11.93% were accompanied by ICD10 codes that are described
To verify performance of this system, we analyzed claims or orders by Medicare as “never covered”, often because they indicate that
from a reference laboratory and a small insurance provider managing the test is performed for screening purposes and did not meet
self-pay organizations. Claims or orders were reviewed using the MBD medical necessity. (https://www.cms.gov/Medicare/Coverage/
LDSTM system for medical necessity based upon medical evidence score CoverageGenInfo/LabNCDsICD10.html). A total of 160,449 tests
(based on clinical relevance and published guidelines) and based on (i.e., 42.9% of total tests) were subject to an associated Medicare
Medicare Local and National Coverage Determination policies (LCDs policy according to our findings. Based on these policies, 112,400
and NCDs). The system has the capability to review every CPT and tests met coverage criteria and 48,049 tests did not.

Citation: Leblow L, Hamill T, Beqaj SH (2019) Use of Laboratory Decision System as a Test Utilization Management Tool in Clinical
Settings, Current and Future Perspectives. J Clin Lab Med 4(1): dx.doi.org/10.16966/2572-9578.128 3
 Sci Forschen
Open HUB for Scientific Researc h
Journal of Clinical and Laboratory Medicine
Open Access Journal

Of the original test claims sample, 342,699 tests (91.5%) had an PPO Insurance Provider Managing Self-Pay
associated LDSTM score. Of these scored tests, 178,962 (47.80%) met Organizations Study
coverage and 163,737 (43.73%) failed to meet coverage, according
to the MBD LDSTM Ranking System. As stated above, the LDSTM can In a second study, we analyzed 294,870 laboratory test claims from
provide recommendations for alternative diagnostic ICD10 codes a PPO provider managing self-pay insurers seeking improvement in
or tests which may aid physicians in choosing a more appropriate claim verification and cost reduction. Of these, 8 claims were missing
ICD10 diagnostic code or test. These recommended alternative ICD10 codes, 503 claims had invalid ICD10 codes, 30,017 (10.18%)
ICD10 codes or tests are ones that would be covered according to had ICD10 codes that were always denied, and 31,521 (10.69%) were
the MBD LDSTM Ranking System and CMS LCDs and NCDs. Based claims that Medicare would not support (8.9% that did not meet
on a subset composed of the first 10,000 claims reviewed, the LDSTM NCDs and 1.79% that did not meet LCD policies). Of all submitted
recommended 9,637 tests (96.4%) with an alternative ICD10 code or claims, 259,840 tests (88.18%) were covered by the LDSTM system. Of
test with a score above 5, meeting medical necessity. Of these, 7755 those covered, 51.97% had LDSTM scores >5 and the remaining 48.03%
tests (i.e., 80.5%) were recommended by the LDSTM system which had scores <5. Interestingly, there were 4783 claims, or 1.62%, for a
would meet Medicare policies, demonstrating that LDSTM system ‘General Health Panel’ that Medicare and most of payers would not
would correct inappropriate orders if employed as a testing utilization cover. If these had been eliminated, it would have alone represented
management system (Table 1). a $228,388 cost savings. Finally, 26.7% of claims were submitted with

Table 1: Independent Reference Laboratory claims analyzed for medical necessity by the LDSTM.

Claim Analytical Description Number of Claims Percentage

Total orders 96170
Average # HCPC per order 3.833982
Total tests 374423
# of claims with SOME invalid ICD10 814 0.22%
# of claims with ALL NCD non-covered ICD10 44671 11.93%
# of claims with Medicare policy 160449 42.85%
# of claims that Medicare supports 112400 30.02%
# of claims that Medicare does not support 48049 12.83%
# of claims that NCD does not support 37505 10.02%
# of claims that LCD does not support 10544 2.82%
# of claims with MDB score 342699 91.53%
# of claims that MDB supports (score >=5) 178962 47.80%
# of claims that MDB does not support (score < 5) 163737 43.73%
First 10,000 claims subset
# of claims with MDB test alternatives (score >=5) 9637 96.37%
# of claims with MDB test alternatives that Medicare supports 7755 80.47%

Table 2: Payer claim analyzed for medical necessity by the LDSTM.

Claim Analytical Description Number of Claims Percentage Cost based on CMS

Total claims 294870
Total claims missing ICD10 8
Total claims with always-denied ICD10 30007 10.18%
Total claims with invalid ICD10 503 0.17%
# of claims that Medicare does not support 31528 10.69%
# of claims that fail NCD 26243 8.90%
# of claims that fail LCD 5285 1.79%
# of claims with mdb determination/advice 260020 88.18%
# of claims with mdb support (score ≥ 5) 135141 51.97%
# of claims with mdb does not support (score < 5) 124879 48.03%
# of claims with mdb suggestions 260020 100.00%
# of claims with mdb suggestions ≥ 5 259776 99.91%
General Health Panel 4783 1.60% $228,388.00
All ICD10 Z codes 77204 26.18% $2,950,000.00
ICD10 Z00.00 26052 8.84%

Citation: Leblow L, Hamill T, Beqaj SH (2019) Use of Laboratory Decision System as a Test Utilization Management Tool in Clinical
Settings, Current and Future Perspectives. J Clin Lab Med 4(1): dx.doi.org/10.16966/2572-9578.128 4
 Sci Forschen
Open HUB for Scientific Researc h
Journal of Clinical and Laboratory Medicine
Open Access Journal

a “Z” ICD10 code that would have required additional supportive 6. Zhi M, Ding EL, Theisen-Toupal J, Whelan J, Arnaout R (2013) The
ICD10 code(s) to establish medical necessity. If these claims were landscape of inappropriate laboratory testing: a 15-year meta-
denied as not meeting medical necessity, the PPO would lose $2.95 M analysis. PLoS One 8: e78962.
in claims that could have been corrected had the LDSTM been used as 7. Gandhi TK, Kachalia A, Thomas EJ, Puopolo AL, Yoon C (2006) Missed
an ordering system (Table 2). and delayed diagnoses in the ambulatory setting: a study of closed
malpractice claims. Ann Intern Med 145: 488-496.
Overall, in this study more than 50% of submitted orders did not
meet medical necessity when compared to the MBD LDSTM Ranking 8. Bindraban RS, Ten Berg MJ, Naaktgeboren CA, Kramer MHH, Van
System and more than 20% did not meet Medicare LCD and NCD Solinge WW, et al. (2018) Reducing Test Utilization in Hospital
policies. Significant improvement would have resulted had the LDSTM Settings: A Narrative Review. Ann Lab Med 38: 402-412.
been employed as a testing selection and ordering system because each 9. Bellodi E, Vagnoni E, Bonvento B, Lamma E (2017) Economic and
order automatically would have been assigned the correct ICD10 and/ organizational impact of a clinical decision support system on
or diagnostic code. In addition, when appropriate, the LDSTM would laboratory test ordering. BMC Med Inform Decis Mak 17: 179.
make suggestions for more accurate ICD10 codes for every order, 10. Faisal A, Andres K, Rind JAK, Das A, Alter D, et al. (2018) Reducing the
whether submitted by test, disease or ICD10 code. It is posited that number of unnecessary routine laboratory tests through education
the LDSTM would improve orders more than 99%; however, more of internal medicine residents. Postgrad Med J 94: 716-719.
analytical study is needed to support and verify this new MBD LDSTM
11. Plebani M, Aita A, Padoan A, Sciacovelli L (2019) Decision Support
system.
and Patient Safety. Clin Lab Med 39: 231-244.
Conclusion 12. Plebani M, Panteghini M (2014) Promoting clinical and laboratory
interaction by harmonization. Clin Chim Acta 432: 15-21.
There is a clear and immediate need for a Laboratory Decision
Support System similar to that which is used in Radiology which can aid 13. Konger RL, Ndekwe P, Jones G, Schmidt RP, Trey M, et al. (2016)
providers in selecting the right test for each disease or condition, while Reduction in Unnecessary Clinical Laboratory Testing through
assigning the correct ICD10 code to meet the medical necessity. Such Utilization Management at a US Government Veterans Affairs
Hospital. Am J Clin Pathol 145: 355-364.
an LDSTM system can assist providers in making appropriate utilization
decisions while also supporting laboratories in reimbursement and 14. Kim JY, Dzik WH, Dighe AS, Lewandrowski KB (2011) Utilization
streamline claim verification for payers, all of which combined will Management in a Large Urban Academic Medical Center: a 10-year
serve to make the laboratory industry and overall healthcare more experience. Am J Clin Pathol 135: 108-118.
efficient and cost-effective. 15. Burns J (2014) Health plans deploy new systems to control use of lab
tests. Manag Care 23: 14,16-17,19-20.
References
16. Greenblatt MB, Nowak JA, Quade CC, Tanasijevic M, Lindeman N,
1. Jackson BR (2007) Managing laboratory test use: principles and et al. (2015) Impact of a Prospective Review Program for Reference
tools. Clin Lab Med 27: 733-748. Laboratory Testing Requests. Am J Clin Pathol 143: 627-634.
2. Yeh DD (2014) A clinician’s perspective on laboratory utilization 17. Dave Fornell (2017) CMS to Require Appropriate Use Criteria
management. Clin Chim Acta 427: 145-150. Documentation for Medical Imaging Orders. Diagnostic and
3. Hickner J, Thompson PJ, Wilkinson T, Epner P, Sheehan M, et al. Interventional Cardiology.
(2014) Primary care physicians’ challenges in ordering clinical 18. McMorris Rodgers, Cathy (2015-2016) H.R.2550 Medical Imaging
laboratory tests and interpreting results. J Am Board Fam Med 27: Modernization Act of 2015. 114th Congress.
268-274.
19. Baron JM, Dighe AS (2014) The role of informatics and decision
4. Debra Sherman (2012) Stemming the tide of overtreatment in U.S. support in utilization management. Clin Chim Acta 427: 196-201.
healthcare. Health News. The American College of Physicians.
20. Delvaux N, Van Thienen K, Heselmans A, de Velde SV, Ramaekers D,
5. Huck A, Lewandrowski K (2014) Utilization management in the et al. (2017) The Effects of Computerized Clinical Decision Support
clinical laboratory: an introduction and overview of the literature. Systems on Laboratory Test Ordering: A Systematic Review. Arch
Clin Chim Acta 427: 111-117. Pathol Lab Med 141: 585-595.

Citation: Leblow L, Hamill T, Beqaj SH (2019) Use of Laboratory Decision System as a Test Utilization Management Tool in Clinical
Settings, Current and Future Perspectives. J Clin Lab Med 4(1): dx.doi.org/10.16966/2572-9578.128 5