As states across the country, including California this year, begin to rein in Pharmacy Benefit Managers (PBMs), and U.S. Congress on the brink of enacting regulations, another threat could affect whether patients can get the lab tests their doctors order.
They’re called Laboratory Benefit Managers (LBMs), and their growing role in our healthcare system could quietly reshape how and where patients access critical diagnostic tests.
Why LBMs Matter to Patients
For the millions of Americans living with chronic conditions, these tests are an essential tool for prevention, diagnosis, and treatment decisions. But without oversight, LBMs are beginning to act as gatekeepers — deciding which labs can perform tests, how much they’ll be reimbursed and, in some cases, whether patients can get them at all.
How LBMs Create Barriers
LBMs contract with health insurers and employers to manage laboratory benefits, much like PBMs have long been overseeing prescription benefits. On paper, they promise efficiency, reductions in unnecessary testing and cost control. But, in practice, they’re introducing new barriers to access, narrowing laboratory networks, and disrupting relationships between patients, providers, and the labs that service them.
How do they do this? LBMs use “utilization management” programs that can require prior authorization for molecular or genetic testing, force physicians to use “preferred” labs, or deny tests that fall outside rigid coverage criteria — even when clinically necessary.
For patients with cancer or rare diseases, these tests can determine whether a treatment works or fails. Yet increasingly, patients and doctors have no visibility into why a test was delayed or denied, because LBM decisions are made behind closed doors under confidential contracts.
This lack of transparency mirrors long-standing concerns about PBMs, which have been found to drive up drug costs and restrict access while operating with minimal oversight. By doing this, PBMs and insurers block prescription access for many patients, sometimes leading to fatal consequences — a troubling precedent for what may now unfold in the laboratory space.
Despite their growing influence, LBMs operate in a regulatory gray zone. Their contracts are confidential, their reimbursement structures are opaque, and their decisions can determine whether patients receive timely testing – often without the patient or doctor realizing why delays or denials occur.
The Bigger Picture
Independent and community laboratories – especially those serving rural and underserved areas – are already struggling to stay afloat amid years of reimbursement cuts. Adding another unregulated intermediary to the mix could push many over the edge.
And the stakes are high. Laboratory testing informs roughly 70% of clinical decisions, yet accounts for less than 1% of Medicare spending. These tests guide everything from cancer diagnoses to medication choices, and when access is delayed or denied, patient outcomes suffer.
What Patients Can Do
-
Ask your doctor whether an LBM manages your lab benefits and how that might affect testing (If your doctor does not know, reach out to your employer and insurer for more information)
-
Keep track of any delays or denials and ask for explanations
-
Advocate for transparency: knowing who makes decisions and why can help protect timely access to care
If left unchecked, LBMs could become the next hidden barrier between patients and the care they need most. It’s time for policymakers and patient advocates to take a closer look at how these unregulated middlemen are reshaping access to diagnostic testing – and ensure that patients, not profit motives, remain at the center of care.