TestUtah is on track for a new state contract — but it will have to use a different lab

(Rick Egan | Tribune file photo) TestUtah Covid-19 testing at the 800 North location in Orem, Tuesday, June 9, 2020.

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The state is on track to renew its contract with the tech company behind TestUtah, but the details aren’t finalized — and it won’t be using the same Utah County lab, which has been cited by federal regulators for multiple violations.

State officials are “in discussions” with Nomi Health, the Orem software company that operates TestUtah, confirmed Nate Checketts, director of Medicaid and health financing for the Utah Department of Health.

When TestUtah launched in March, it was promoted as a philanthropic, volunteer effort, despite the companies involved having secured millions of taxpayer dollars in no-bid contracts. The state has paid Nomi at least $10 million to run a series of coronavirus testing sites in Utah and a website to screen patients for symptoms. The company has received more than $50 million to operate similar programs in Iowa and Nebraska.

But questions about test accuracy have dogged TestUtah since April, when data showed it was producing an unusually low rate of positive results. TestUtah then refused to join Utah’s other labs in a collaborative “proficiency challenge” to check the sensitivity of one another’s coronavirus tests. Instead, in a compromise with health officials, TestUtah agreed to a more rudimentary experiment that involved exchanging 90 samples with the state lab and comparing results.

But after weeks of back-and-forth with Timpanogos Hospital, where TestUtah had contracted to process its tests, the health department refused to release the results of the experiment.

At about the same time, federal inspectors reviewed the Timpanogos lab and found it in violation of its certification guidelines, due to problems with how the lab was processing its COVID-19 tests. The hospital has responded to the alleged violations, and federal regulators’ were still reviewing the case this week.

But the Orem hospital lab will not continue to process tests collected by Nomi if the state renews the TestUtah contract next week.

Instead, Nomi would be required to work with whatever lab the state chooses, according to agreements that set terms and pricing for government-issued testing contracts. State health officials are negotiating with Fulgent Therapeutics, based in Temple City, Calif., to conduct the lab processing of TestUtah’s tests, Checketts said.

The set of agreements, based on a bidding process state officials conducted this summer, provide multiple vendors and prices for sample collection, lab work and patient communications for COVID-19 testing, said Tom Hudachko, the spokesman for the state health department. Any government entity can use these agreements to arrange testing at whatever scale they need, he said.

For example, Hudachko said, a school district that wants to conduct testing before a football game may use the vendors and fee schedules arranged by the state without having to conduct its own bidding process, which can take weeks.

The agreements themselves do not commit any public funds; that is established in separate, “service-level contracts,” Hudachko said.

The agreements include six vendors. Four are for lab testing: Fulgent, ARUP Laboratories in Salt Lake City, Premier Medical Laboratories in South Carolina, and LabCorp’s Salt Lake City operations. Two other vendors may provide sample collection: Nomi and Kansas-based NICUSA, Inc.

Hudachko said he didn’t know whether HCA Healthcare, which owns Timpanogos Hospital, submitted a bid for the lab work or whether federal inspectors’ findings played a role in awarding the contracts.