Market Data 
Markets
Replies to post #192798 on Biotech Values
09/19/15 12:55 PM
Investor unease about the merger is easy to understand. The merger proxy, filed by the companies before the Aug. 20 approval vote by Bio-Reference shareholders, reveals the lab’s long campaign to find a buyer.
Bio-Reference said that it began shopping itself as far back as 2009, but got no bidders. Last year, Bio-Reference became increasingly concerned about its prospects as a stand-alone company, given “certain laboratory market dynamics, pricing pressure from new genetic testing companies, and reimbursement pressure from government and commercial payers,” and intensified its search, talking to more than 20 potential buyers and submitting to the due diligence of a dozen. None bit. In March 2015, Frost came knocking.
…[BRLI] former salespeople describe a different ethos, where the sales force, for example, downplayed the standard $200 pap smear in favor of the $2,500 GenPap panel test, which detects sexually transmitted diseases as well as cervical cancer, even for testing of elderly patients. The resulting commissions, according to an ex-salesperson–who asked to remain unidentified to avoid legal retaliation—were “awesome.” Pushback from health insurers, however, has sharply cut reimbursement on such pricey tests, says another former salesperson who also requested anonymity.
…Collection of patient co-pays is a sore legal issue in health care generally, and highly relevant to Bio-Reference, which frequently finds itself consigned to “out of network” status when competing against LabCorp and Quest. Former Bio-Reference salespeople describe how their phone calls to the company’s billing department could eliminate the co-pay obligation of a complaining patient—and remove a disadvantage Bio-Reference suffered when competing against labs that were “in network” and co-pay free under the patient’s health plan.
Bio-Reference didn’t answer our question about the proportion of patient co-pays and deductibles that it collects.
AI
