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Avalon Healthcare Solutions (Avalon), founded in 2013, has developed and deployed a comprehensive Laboratory Benefit Management (LBM) solution to manage laboratory testing quality and spend on behalf of payers. Avalon’s solutions help payers transform their lab benefit from the old fee for service model to a Value Based Care model, delivering improved quality and significant laboratory cost reduction. Currently serving health plans representing over 21 million members, Avalon delivers 10-18% savings across all outpatient laboratory services. The demand for laboratory testing is increasing disproportionally compared to medical activity . Researchers suggest that more than 20%-33% of all laboratory utilization is not medically necessary. 5,6


Through a robust solution which entails both Genetic Testing Management and Routine Testing Management, Avalon has demonstrated the ability to successfully decrease the utilization of unnecessary laboratory procedures and drive the continual reduction of inappropriate testing and coding over time. Members also benefit from the improved alignment to the laboratory science standards as they receive high-quality care and avoid costs associated with unnecessary testing.

Clinical Advisory Board (CAB): Avalon’s independent CAB is comprised of five prominent individuals in the medical community. Approximately 140 evidence-based scientific lab policies are reviewed by the CAB annually; the approved policies are offered to payers for adoption.

Routine Management Testing (RTM): Avalon’s RTM solution is powered by our proprietary cloud-based clinical lab editing application known as the Automated Policy Enforcement Application (APEA). In less than one second, APEA provides decision advice codes to deny, reduce, or approve claim lines along with references to specific policy detail. APEA handles more than 2 million automated evidence-based lab edits.

Genetic Testing Management (GTM): Avalon’s robust GTM program requires a nurse or physician to review and determine if a prescribed test or panel is medically appropriate. This assessment also effectively prevents unnecessary and low-quality, high-cost tests prospectively, and ensures that labs are inputting codes correctly and appropriately. A portion of the GTM system can be automated through an Avalon-based proprietary self-service Prior Authorization System (PAS).

Independent Laboratory Network: Avalon partners with over 60 independent laboratories creating a broad network that supports client health plans in all medical areas.


As shown in Figure 1, in 2019 Avalon helped commercial populationbased plans save up to $2.35 Per Member Per Month (PMPM) in unnecessary outpatient laboratory testing spend. This $2.35 PMPM savings can be further categorized by Genetic Testing Management (GTM) and Routine Testing Management (RTM) as shown in Figure 2.

Avalon’s GTM program has successfully prevented unwarranted and low-quality, high-cost tests prospectively. In 2019, utilization and associated costs were found to be 45% higher in populations without Avalon GTM programs when compared to populations with Avalon GTM programs, as shown in Figure 3.

Avalon has also achieved great success with their RTM program powered by the Automated Policy Enforcement Application (APEA). APEA has successfully increased compliance with policies and decreased the volume of inappropriate testing units. Decreased units can be attributed to provider education and more appropriate billing practices. Figure 4 shows that the compound annual growth rate (CAGR) of units ordered PMPM in populations without APEA is increasing, while the CAGR of units ordered PMPM in populations with APEA is decreasing.


1. Mathias PC, Conta JH, Konnick EQ, et al. Preventing Genetic Testing Order Errors With a Laboratory Utilization Management Program. Am J Clin Pathol. 2016;146(2):221-226.

2. Daily D. Doctors’ Mistakes in Genetic Test Orders Is Warning Signal to Pathologists and Clinical Laboratories. 2012; Link to website.

3. Phillips KA, Deverka PA, Hooker GW, Douglas MP. Genetic Test Availability And Spending: Where Are We Now? Where Are We Going? Health Aff (Millwood). 2018;37(5):710716.

4. Freedman DB. Towards Better Test Utilization - Strategies to Improve Physician Ordering and Their Impact on Patient Outcomes. Ejifcc. 2015;26(1):15-30.

5. Ngo A, Gandhi P, Miller WG. Frequency that laboratory tests influence medical decisions. The Journal of Applied Laboratory Medicine. 2017;1(4):410-414.

6. Mize R, Hunt S, Redman W. The Issue of Test Utilization within the Clinical Laboratory. Journal of Business and Behavior Sciences.