Tuesday, January 12, 2010

Congratulations Navigenics. You ARE a clinical lab! Uh-Oh...

So like I have said multiple times. Navigenics is AT LEAST a clinical laboratory if not a healthcare provider.

It turns out that the NY State Dept of Health thinks they are a laboratory and have now awarded them a license to do their "Health Compass" in NY

So I say "Congratulations, you are a dead man"

Why do I say this? Simply because now Navigenics (any one notice that the only other prominent genetics word that uses genics is EuGENICS? Hmmmmm)

As I was saying, now Navigenics will be allowed to be a lab in NY and are given a license. What will that entail?

Uh, Vance, you did read Subpart 34-2 of 10 NYCRR, Laboratory Business Practices in it's entirety before you jumped into this right??

I did back in 2005 and that's what shook us even further away from the "BIZ"

The New York State Regulations on Clinical Laboratories are extremely rigorous. In fact, if they offered the hairbrained scheme of marking up tests for my profit, like M.F. did back in 2007, they would be in violation.


Section 34-2.4 Prohibited business practices by clinical laboratories.

(a) No clinical laboratory, its agent, employee or fiduciary shall make, offer, give,
or agree to make, offer or give, any payment or other consideration to a health services
purveyor for the referral of specimens for the performance of clinical laboratory services.

Like I said, Hair-brained scheme M.F.

These laws may impair their ability to run a for profit lab and KEEP their NYS license to test.

Here are a few more doozies

Section 34-2.4 Prohibited business practices by clinical laboratories.

(b) No clinical laboratory, its agent, employee or fiduciary, shall participate in the
division, transference, assignment, rebate, or splitting of fees with any health services
purveyor, or with another clinical laboratory, in relation to clinical laboratory services.

Looks like no deep discounts for the holidays in NYC....uh oh.

Section 34-2.6 Space.

(a) The rental of space by a clinical laboratory from a referring
health services purveyor, or an immediate family member of such purveyor, for more
than fair market value, or under circumstances where the rental amount is affected by
the volume or value of tests ordered by the health services purveyor shall be deemed
consideration given for referral of specimens for performance of clinical laboratory
services, and is prohibited.

No increased rent shenannigans either!

The rest of 34-2.6 is onerous as well. New York is Dedicated to preventing doctors and health care facilities, including labs from engaging in what other business may call standard operating procedure. Why? It may jeopardize the public health....

Section 34-2.8 Professional courtesy.

The provision of clinical laboratory services by
a clinical laboratory for health services purveyors, their families, or their employees,
agents, or fiduciaries at a charge which is below the lower of the applicable Medicare
fee schedule amount or the national limitation amount as defined by the Medicare
program for such services is consideration given for referral of specimens for
performance of clinical laboratory services, and is prohibited.

Looks like the Beth Israel Deaconess program with naviGENICS is a no no as well.........

Perhaps the biggest issue comes in the prepared reports.......

Section 34-2.11 Recall letters and reporting of test results.

(a) A clinical laboratory shall not communicate to a patient of a referring health
services purveyor that a clinical laboratory test, including, but not limited to a Pap
smear, is or will be due to be performed, or that a visit to the health services purveyor
for diagnosis or treatment is or will be due. A clinical laboratory shall not prepare such
communication for the health services purveyor to send, or otherwise facilitate the
preparation or sending of such communication by the health services purveyor. Such
communication or its facilitation shall be deemed consideration given for referral of
specimens for performance of clinical laboratory services, and is prohibited.

What does this mean? Any New York State resident who receives a doctor ordered naviGENICS health compass cannot receive direct communication of these results.

NOR can Navigenics customize a report for an ordering set of physicians in NYS. Which the physician just spits out at time of follow up.......

What this can mean is one thing and one thing only......

Navigenics is about to go into the clinical business. With a different name and a different company. They will work together in synchrony with the Navigenics lab team and provide that they deem to be "personalized medicine" But what will be nothing more than Medicine with a personal genomics boondoggle...

Real personalized medicine includes patient pedigrees. Who knows, maybe they will do this?

The Sherpa Says: Not a bright move coming into NYC without investigating what it entailed. I hope someone did their homework and has found a "loophole" Because otherwise, no doctor in their right mind is going to order your tests.....for now......


peter castellano said...

I find it hard to believe that Navigenics would have entered into the license application process without knowing all of these regulations/prohibitions. Since they are the first of this kind of company to receive a license from NY state, I have read that they were in constant contact with the regulators who granted them this license. Surely, they must have disclosed what they are planning to do with their business. Do you have any insight/information on what basis, therefore, the license was granted and how the state of NY views their proposed business, which seems in direct violation of many of these prohibitions. It just doesn't make sense.
Peter Castellano, Esq.

Steve Murphy MD said...

Like I said, they are likely changing their business plan. Otherwise this makes no sense. The lab can't employ doctors who order their tests.

RenataM said...

I so enjoy your entertaining posts - Sherpa! So much provacative fun!

Clearly, NYS has been satisfied - and that's a benchmark worthy of celebration IF the goal is progress.

Perhaps a call to Albany is in order to ask them what distinguished Navigenics?

Steve Murphy MD said...

I am in interested in what Navigenics will do to keep to the laws, not what they did to be cleared as a lab. However, we certainly could call Wadsworth, but not sure that states have the same Freedom of Information requests......

I do congratulate them. But you figure the would have done this BEFORE their huge 9 day open bar in SoHo....


peter castellano said...

Thanks for the reply. Yes, I'm not sure how they're changing their plan. In your response to Renata, I'm not sure what you mean by you're not interested in how they became a lab, you're interested in how they keep to the laws. Aren't these 2 things intertwined? I guess what I'm saying is in getting their lab license, wouldn't the regulatory agency have to have recommended they do or cease doing something which could directly violate another reg? Also, NY State does have its version of FOIA...I just got some info on a company that way by writing to the Attorney Geneneral's office.

RenataM said...

Hey - as a Manhattan born/bred resident - I am ALWAYS for a party at any place/anytime - Harlem or Soho is fine!

Be well...and please continue posting. You do a contrarian service that is needed. Thanks!

Steve Murphy MD said...


Yes they are intertwined and I am certain that they must have presented an altered business plan. But I am not so interested in what they said they would do. I am more interested in what they now will do.....