FORT MYERS — Government and insurer reimbursement cuts for cancer tests hurt NeoGenomics' financial results in the most recent quarter.
The cancer-diagnostic company reported a net loss of $761,000 on revenues of $23 million in the first quarter ending March 31. That compares with net income of $102,000 on revenues of $18.2 million in the first quarter one year ago.
While testing and revenues rose in part because of the acquisition of California-based PathLogic in July, the average revenue per test dropped 11%. The company attributed the decline to lower reimbursements for a cancer test called fluorescence in-situ hybridization (FISH).
“We estimate that declines in FISH reimbursement reduced our revenue by approximately $2.1 million in quarter one, and most of that amount similarly reduced profit,” says Douglas VanOort, the company's chairman and CEO, in a statement.
Still, VanOort remains positive. He says some commercial insurers are analyzing the new reimbursement rates and may revise them higher despite the fact that they often follow Medicare guidelines.
“We believe that volume growth and process and productivity improvements will allow for a return to profitability in the second half of this year,” says VanOort, in the earnings statement. “We remain committed to invest in growth through innovation as we continue to develop and commercialize new and innovative tests.”
NeoGenomics is headquartered in Fort Myers, where it operates a laboratory that performs cancer tests for oncologists, pathologists, clinicians and hospitals. The company also has labs in Tampa, Nashville, and Fresno and West Sacramento, Calif.