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Hundreds Of Missouri Nursing Homes Left In The Lurch After Regulators Penalize Testing Lab

Gamma Healthcare's headquarters in Poplar Bluff, Missouri. The company was founded in 1981.
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Gamma Healthcare's headquarters in Poplar Bluff, Missouri. The company was founded in 1981.

Federal regulators pulled the lab certifications of Gamma Healthcare of Poplar Bluff, Missouri, which provides diagnostic testing for hundreds of long-term care facilities in Missouri.

Missouri nursing homes are scrambling to find labs to perform COVID-19 and other diagnostic tests after federal regulators suspended the lab licenses of a Missouri-based company that serves hundreds of long-term care facilities throughout the state.

The Centers for Medicare and Medicaid Services took the action against Gamma Healthcare Inc.’s labs in Poplar Bluff and Springfield, Missouri, after finding workflow issues that CMS said could lead to contamination of samples.

Gamma provides laboratory services for 2,500 long-term care facilities and physician practices in 11 states in the Midwest and South, including Missouri and Kansas.

Its lab in Poplar Bluff runs 1.6 million tests per month, including 100% of the company’s COVID-19 and urinary tract infection tests, according to recently filed court documents. Its Springfield lab runs 990 tests per month for patients at risk of blood clots or on blood thinning drugs.

Nearly 900 long-term care facilities in Missouri utilize Gamma, including 459 of the state’s 504 skilled nursing facilities and more than 400 assisted living and residential care facilities.

“This lab work that’s done is critical given the underlying health conditions that our residents in nursing homes have,” said Nikki Strong, executive director of the Missouri Health Care Association, a trade group that represents hundreds of Missouri long-term care facilities.

“So if they do close their doors, I don’t know what we’re going to do, quite frankly. It’s not as easy as we’ll just go pick up the phone and call another lab and have that lab do that. Labs across the country are overwhelmed right now.”

Gamma went to federal court 10 days ago seeking to block regulators from suspending the lab licenses. But U.S. District Judge Doug Harpool denied its request, saying he was not going to second-guess regulators’ decision.

Gamma was founded in 1981 and employs about 750 people. The company, which is based in Poplar Bluff, is owned and operated by members of the Murphy family, four of whom occupy the company’s top positions.

Jerrod Murphy, the company’s president and CEO, told KCUR Gamma was blindsided by CMS’ decision to pull its lab certifications.

“We’ve been in business 39 years and never had this level of scrutiny,” he said. “The odd thing about this is it was based on COVID testing, but they suspended the whole lab for all the testing.”

It’s not clear why CMS took such a draconian step. In the past, when on-site surveys of Gamma labs uncovered deficiencies, Gamma was able to take corrective action and allowed to continue its work.

“This is really a mystery,” said Mark Weller, an attorney with the Polsinelli firm who represents Gamma. “We even brought in consultants in the last month that work with labs all around the country and they’re just as perplexed as we are at the very hard line that CMS has taken.”

CMS officials did not respond to a request for comment.

What is clear is that, unless CMS reverses course, the hundreds of nursing homes that depend on Gamma’s services, particularly those in rural areas, will struggle to find other labs to do the daily diagnostic testing that is routinely performed in nursing homes. Those include not just COVID-19 testing, but testing for diabetes, pneumonia, urinary infections and other conditions.

“Most people just don’t think about how does somebody in a nursing home have their health care taken care of, and certainly their lab testing done,” Weller said. “But there’s a very small, specialized segment of portable labs like Gamma that have phlebotomists who get up at 4 in the morning, go to the nursing home, go to the patient’s bedside, draw their blood, process the sample in the lab and then get back the results to the physicians, many times in the same day. Because a lot of them are critically ill, co-morbidity patients and need those results back.”

Gamma says the nursing homes it serves have more than 250,000 residents, many in rural areas that have no ready access to medical testing.

“They don’t have access to other providers or to lab work without calling the hospital or putting the patient in an ambulance and taking them to a hospital,” Murphy, Gamma’s CEO, said.

Strong, of the Missouri Health Care Association, said that her members were scrambling to figure out how to secure phlebotomy services and then get the samples to another lab in a timely fashion.

“So this is really a headache,” she said.

For the time being, Murphy said, some of the slack can be picked up by Gamma’s labs in St. Louis and Tyler, Texas, which still have their licenses to operate. Gamma is also farming out its work to other labs.

But Murphy said that was not sustainable in the long run.

“Obviously this is not going to be a long-term fix,” he said. “We can only sustain this type of workflow for a short period of time. Our hope is that CMS will come to the table, and we can resolve the matter before we have to quit servicing these facilities.”

Dan Margolies has been a reporter for the Kansas City Business Journal, The Kansas City Star, and KCUR Public Radio. He retired as a reporter in December 2022 after a 37-year journalism career.
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