Laboratories warn about rate cuts applied by insurers

Felipe Cintrón, president of the Clinical Laboratories Association of Puerto Rico (Facebook via Asoc. de Laboratorios Clínicos de Puerto Rico)

By THE STAR STAFF

The Clinical Laboratories Association of Puerto Rico (ALCPR by its initials in Spanish) issued a warning Tuesday that new rate cuts by health insurers could lead to the closure of laboratories, potentially limiting patient access to essential diagnostic tests that inform medical decisions.

The warning follows Triple-S Advantage’s announcement of another unilateral rate reduction of up to 25%, effective this past August.

“Faced with an anticipated closure of dozens of hospitals and a significant loss of physicians — as well as a persistent shortage of nurses — the common denominator of the crisis affecting our healthcare system is the practices of insurance companies,” stated ALCPR President Felipe Cintrón. “Insurance companies are benefiting from record increases in premiums while continuing to exert economic pressure on independent laboratories that provide critical diagnostic information to both physicians and patients.”

The clinical laboratory sector is increasingly under pressure from insurance companies that compete directly by operating their own laboratories, while concurrently reducing the rates paid to independent providers, Cintrón noted.

In response to Triple-S’s actions, the ALCPR intends to send letters to the president of the insurer and the new executive director of the Puerto Rico Health Insurance Administration -- the body overseeing the Medicare Platinum segment -- requesting immediate action to address the ongoing rate crisis.

The cuts in rates compound existing cost increases, Cintrón said. An economic study prepared for the ALCPR in 2023 revealed that clinical laboratories in Puerto Rico are experiencing stagnation and a decrease in rates from insurers, while healthcare costs have surged by over 24%. For instance, in the Medicare Advantage category, rates fell by 29.5% between 2012 and 2022, while insurance premiums rose by 40.7% from 2010 to 2023. The growing disparity poses a significant threat to the sustainability of laboratory services across Puerto Rico.

The variation in prices for specific tests underscores the severity of the situation, the ALCPR president added. For example, the average reimbursement for a complete blood count, or CBC, in Puerto Rico is just $9.60, compared to $75 in the continental United States. Similarly, a comprehensive metabolic panel, or CMP, averages $14.34 in Puerto Rico, compared to $225 in the U.S. Those discrepancies are prevalent for most routine laboratory tests.

According to official communications obtained by the ALCPR, Triple-S has notified laboratories of new rate reductions that will align their rates with 85% of current Medicare rates, effectively resulting in a decrease of 25-27%. The insurer did not provide any justification for the cuts, except for a vague reference to “alignment” with federal guidelines, the ALCPR noted. The situation continues a two-decade trend of reduced reimbursements for laboratories.

Small laboratories, particularly those in rural areas and small towns serving communities with limited access to healthcare, face an increased risk of closure due to the pressure to lower rates.

“We have absorbed significant increases in the costs of raw materials, profits, and workers’ compensation, all without any rate adjustments,” said Alba Rivera Torres, administrator of the Plaza Oasis Clinical Laboratory in Santa Isabel, in response to Triple-S’s notice. “This latest reduction pushes us below the threshold of economic sustainability.”

Cintrón said the ALCPR supports legislative actions such as Bill 2 of 2025, which would establish minimum reimbursement rates based on actual operating costs and require periodic reviews linked to inflation rates for healthcare costs. The organization also supports Rule 91, which would establish the basis for collective bargaining between insurers and providers.

The ALCPR is demanding that insurers justify rate cuts while laboratory costs continue to rise, citing examples such as COVID-19 and Mycoplasma tests, which laboratories incur for $14, but insurers reimburse between $8 and $12.

“We request prompt action from regulatory agencies and the Puerto Rico Legislature,” Cintrón said. “The healthcare system is facing a critical period. [...] The current situation regarding rates and payment timing is financially unsustainable.”