In the past 6 months, CLIA Lab Consultant has helped more than 25 clients with COVID testing needs, services provided included: lab director placement, business strategies, reimbursement, establishing back to work/school program, CLIA audit, startup waived, moderate, high complexity and mobile testing laboratories. We had assisted COVID labs startup with 11 different states (AZ, CA, FL, GA, HI, KS, MD, NY, OH, TX and WI) including states (California, Maryland and New York) with its own lab regulations.
All laboratories are currently generating revenue or have active testing for back to school/work programs. One of key services we provided to our client is on-going update to the industry trend and strategic review, allowing laboratories to make changes to capture the market. Some of the changes that were made included: operating its own collection sites, update license for temporary site testing, add offering of rapid testing and lab developed test, move from cash to insurance billing model.
With COVID-19 there are constant changes to the testing market, in order to stay competitive in a rapidly changing environment, laboratories must continuously update and make changes to offering and operation.
This week the California state response to whistleblower allegations at the billion-dollar COVID lab at Valencia established with PerkinElmer. The allegations included employees sleeping at work, swab samples found inside restrooms, lack of training/competency, thousands of inconclusive COVID results (7.5 times higher than other state labs). Testing personnel/supervisors does not meet CLIA and State regulations.
While the investigation is on-going, it’s definitely a wakeup call to other labs doing COVID testing. During the COVID pandemic, a lot of labs quickly ramp up testing through rapid hiring, purchasing and validation now as we are one year into the pandemic many labs are overdue for inspection. Labs should review it’s procedures, processes, training and quality assessment to ensure compliance with CLIA and other applicable regulations before the CLIA office sends it’s inspection notice. By the time, the lab received the inspection notice, there might not be adequate time to review and verify everything needed. Bringing in a consultant can be helpful with a fresh set of eyes and perspective and also add extra help to the lab that’s already stretched thin by the surge of testing volume.
CMS 116 the CLIA application form is a required form to operate clinical labs within the U.S. (with a couple exceptions), if it is a non-waived lab the CMS-209 CLIA laboratory personnel report is also required. Some states require state application forms to be completed as well. CMS and state agencies do offer guidelines and help in completing those forms then why is it necessary to pay a consultant to complete those forms for the lab. Those forms while simple are legal documents, therefore just like any legal documents it’s best to have someone with knowledge and experience with the process to verify accuracy and completeness. Another critical reason to have a lab consultant review those forms is when CLIA/State forms are not complete correctly, the lab will need to submit corrections. Oftentimes correcting errors on one form require the lab to revise another field on a different form if the lab failed to recognize the required correction the form gets rejected and another revision will need to be submitted. In the resubmission process, the lab loses track of the revision made and when the CLIA/state inspector comes for inspection there are discrepancies between what the lab is doing and the information provided on forms that were submitted. Discrepancy not only leads to citations, but it creates a bad impression for the inspector as he/she wonders if the lab can’t fill out those forms correctly then what else can be wrong.
The demand for lab directors has increased as the number of non-waived COVID labs continue to grow. For this past year, we had successfully placed high complexity lab directors for all our clients that requested for this service. Our lab director program does not have any recurring monthly fee, the lab will pay a one-time upfront payment roughly equaling to the monthly compensation of the lab director. The lab director and the lab can negotiate the terms of the agreement directly, a template will be provided as a starting point. Allowing the lab director and the lab to negotiate directly ensures the agreement will be beneficial to both parties. We have lab directors that's licensed in states that required separate state license, including: California, Florida, Hawaii and New York.
Some experts believe home testing will be the key to end the pandemic, but there has been a lot of confusion on home testing due to differences in home collection vs actual testing.
Home collection kit - The LabCorp’s Pixel COVID-19 Test Home Collection Kit allows individuals to self-collect a nasal swab, then send it to LabCorp for testing without a doctor’s order. There are also other self collection kits for nasal and saliva that require a doctor’s order. The advantage of home collection kit is patients can avoid the long line at the drive thru collection site, the test will be performed by CLIA high complexity labs and using PCR which is more sensitive than antigen testing. One of the major disadvantages of home collection kits is turnaround time the patient must wait days for the lab to run the test.
Home testing kit - currently there are both FDA EUA molecular and antigen test kits available, the patient will collect and test the sample at their own home. With at home testing, the result is available in minutes to the individual. The Ellume antigen test is the only home test that doesn’t require a doctor’s order, both the Abbott BinaxNOW antigen test and Lucira Health molecular test required a doctor’s order. The sensitivity and detection limit is lower than lab performed PCR test.
Home testing supply is currently extremely limited and production is unlikely to ramp up until Spring of next year. Laboratory-based testing would still be a key to control the pandemic in the near future.
The COVID-19 testing supply chain had been under pressure almost a year now from swab, UTM, extraction reagent, pipette tip, analyzer, biosafety hood to COVID reagents. But the biggest shortage that remains unsolved is waived point of care (POC) molecular testing. Currently, all analyzers and test kits that’s capable of waived point of care COVID molecular testing are on backorder; there are labs with analyzers but unable to secure test kits and supplies isn’t guaranteed.
Antigen testing is emerging as an alternative as the supply problem with POC molecular testing challenge isn’t expected to be resolved anytime soon. Then comes the FDA warning letter in November alerting clinical labs and providers of false positive antigen tests. In the FDA letter the problems outlined included:
On 11/17/20 the FDA issued EUA to Lucira Health All-In-One Test Kit, this is the first test kit allowing anyone over 14 years old to perform self-testing at home. This is definitely a game-changer and many entrepreneurs planning to startup and mobile/pop up lab owners are trying to understand the impact this will have on their business model moving forward. While the technology and the FDA approval are a game changer, but the impact of Lucira approval will be likely minimal in the near future and shouldn’t discourage anyone from starting up a lab. There is still a lot of barriers to break through before the test can make an impact:
At home testing isn’t the end of the mobile/pop up COVID lab, there are still opportunities to open up your own mobile and pop up COVID lab.
There are an increasing number of entrepreneurs wanting to start up new business ventures around COVID testing but without operating a lab. Some of the areas included:
I have worked with clients where the only reason they start looking for a lab consultant is because they received a cease-and-desist letter from CMS or a notice from FDA their company website contains misleading information.
Hiring a lab consultant early on during the business planning process, not only can help entrepreneurs avoid legal actions by CMS, FDA, and State regulators. But an experienced lab consultant can provide valuable insight into the laboratory industry and help make connections.
At CLIA Lab Consultant, we provide startup consultation for $1,000 covering 2 hours of work, for the following topics: CLIA, CMS, State regulations (if applicable), FDA, EUA, Mobile/Temporary Site testing, OSHA, safety regulations, insurance, billing, ICD-10, CPT code and reimbursement.
When I get calls regarding COVID lab startup, people will ask about the time it takes to get the lab up and running. They usually ask about reagent, analyzer, Biosafety cabinet (BSC), space requirement, etc., but often no one asks about LIMS/LIS initially.
Most labs would be going with a cloud-based system as it offers faster implementation and does not require on-site IT support. A google search on cloud-based LIMS will turn up a huge selection of vendors. Many of the cloud-based LIMS/LIS will appear very similar in terms of functionalities; it is often difficult for labs to evaluate which system is better based on demo and promotional material.
Clinical vs industry system
Some LIMS started in other industries (agriculture, cannabis, chemical processing, environmental, food/beverage and manufacturing) before entering clinical. It is important to know that healthcare and clinical labs are unique, repackage LIMS from other industries and selling it to clinical labs is not going to be a good system.
For COVID lab startup some basic LIMS function requirements include interfacing with molecular analyzers, physician/patient portal and reportable disease reporting to the public health department using HL7 and/or CSV files. Have the LIMS vendor provide the billable hours needed for each function ahead of time, if the LIMS vendor had experience in lab setup, they should not have a problem guaranteeing the hours needed.
Get reference: be specific and ask questions
Always ask for a couple references to contact and be specific, if setting up a high complexity COVID-19 PCR lab with multiple interfaces, patient/physician portal and HL7 public health reporting, ask the LIMS vendor to provide references that are using the same functionality.
As part of CLIA lab startup service, we would assist the lab in selecting the right LIMS and participate in conference calls with the LIMS vendor as needed, there is no additional charge for this service. As we recognize LIMS implementation is an integral part of the startup process and it is in the best interest of the laboratory to have an experienced lab consultant that can provide guidance to the lab.
I was asked if it was too late to start up a molecular COVID lab with the vaccine under review by the FDA and existing labs being more prepared for higher volume. The answer is no, there is still time to start up a molecular COVID lab to recoup the startup cost and be profitable. There are advantages for labs that are starting up now.
Starting a business is fraught with risks and especially in times of uncertainty like a pandemic. On the other hand, uncertainty also creates significantly more reward opportunities for those willing to take on the risk. At CLIA Lab Consultant we go beyond ensuring your lab is compliant with all regulations, but also for financial viability as well.
Michael Yu, MS, MBA, MLS(ASCP)
Michael is the founder and owner of CLIA Lab Consultant where he provides consultation to laboratories and companies world-wide for startup and lab regulations, reimbursement, and testing strategies.