Friday, October 23, 2020

MolDx (And Noridian) Finalize Prostate Cancer Tissue Prognostics LCD

Since May 2020, MOLDX watchers have often been perplexed by the new discrepancies between system-wide MolDx LCDs (in four MACs) and unique maneuvers of the western Noridian MAC which differ from final MOLDX decisions elsewhere.  See for example here.  

By late September, I felt confident enough to call a pattern (here).  

  • Noridian was declining to finalize LCDs from MOLDX that it felt were too specific to a single product. (In some cases, Noridian declined to finalize such an LCD even if MOLDX changed the headline title of the LCD).   
  • Noridian does go along with MOLDX, verbatim, when an LCD is clearly designed in a holistic way to cover a whole domain of test types.

Prostate LCD Finalized, From Specific to General

A good example is the finalization of last year's draft LCD DL38341.  The original title was, "MolDX: Decipher® Biopsy Prostate Cancer Classifier Assay for Men with Favorable Intermediate Risk Disease (DL38341)."   Note that there are at least three covered prostate cancer tissue risk classifiers - Myriad, Oncotype, and Decipher - but there are multiple context (biopsy tissue pre surgery, postsurgical resection tissue, before and after various definitive or invasive therapies).

DL3841 has now been finalized, even in Noridian, as " Prostate Cancer Genomic Classifier Assay for Men with Localized Disease (L38341)."  It comes with a Response to Comments document A58511.  It comes with a Billing and Coding article A57236.   I've made a redline comparing the text of DRAFT versus FINAL.

  • I've put the whole set in one zip file in the cloud, here.
    • See upper right hand "down" arrow to download zip.

The coverage article appears to provide equal coverage for 81541 and 81542, which are Myriad Prolaris and Decipher Bioscience, Decipher Test.  81541 is $3873 while 81542 has been in the 2020 gapfill process, recently given a price of $3159 (new, subject to appeal).  

Oncotype Prostate, 0047U, is not listed in the coding article A57236.  (Current fee schedule $3873).

Thursday, October 22, 2020

CMS Releases Final Gapfill Pricing for CY2021 Lab Codes

 Each year, CMS considers all new lab codes in a summer pricing meeting, and CMS sets some quickly by "crosswalk" to an existing price.  Others are sent to "gapfill," a process in the second year where MAC medical directors proposed then finalize pricing for the "gapfilled" lab codes.  

While CMS sets "gapfill" at the median rate of all the states, MolDx controls pricing in 28 states and therefore sets the next year's median regardless of pricing proposals in the other 22 states.

On October 22, 2020, CMS released final gapfill prices for CY2021 on 37 codes.  (I say final; technically the prices can be appealed to CMS administrators til November 22).

  • See the public meeting home page here.
  • Look near the bottom for the 2021 final gapfill file, it should be here.
  • I've made a summary cloud file comparing June proposed and October final on one spreadsheet, here.

CMS revised 4 prices upwards and left 33 the same.  Prices on the elevated tests are shown:

CMS had comments to change pricing on 7 codes, acting as requested on 4.  CMS turned down 3 requests for higher prices.  CMS also logged comments "supporting the proposed price" (no action needed) on 2 codes.

Tuesday, October 20, 2020

AMA Releases 4Q2020 PLA Code Applications; Meeting November 5.

AMA takes PLA code applications every quarter (e.g. circa July 1, circa October 1) and briefly posts them for public inspection a couple weeks later.  This also gives you a chance to register for the public meeting for those PLA codes, which is essentially a 15 minute version of a regular CPT editorial meeting.  (Between the applications and the CPT meeting, there is an internal meeting of a review group called PLA-TAG to which applicants may be invited for questions if needed.)

AMA has posted the applications for new or revised PLA codes, received October 7 earlier this month.

  • See the webpage  here and the PDF of applications here.

The BioFire is Out!

It's pretty interesting.  Biofire is deleting its FilmArray respiratory panel codes, possibly because they have been replaced by panels containing added COVID (that's only a guess, and they are deleting their RESP codes, not their GI codes.)  These are PLA codes 0098U, 0099U, 0100U.  

It's especially interesting because in CY2019 data, only four PLA codes out of well over 100 - the FMI tumor test, the Oncotype Prostate test, and two Biofire codes 0097U GI, 0099U Resp - had any significant usage (with a rapid dropoff, being in sequence paid: $78M, $20M, $3M, $2M).  Nearly all other PLA codes were essentially unused by CMS in CY2020, paying 0-$10,000.

New PLA Codes

There are only a handful of new code applicants this fall; in the past there have been as many as 20-30 in a single quarter.

The six new applications (see PDF linked at top) are Guardant G360CDx, PIGF pre eclampsia screen, a MAAA immunoassay, Onctype MAP, 257 genes, ThyGeNext Thyroid Oncogene Panel, Precision Blood (51 antigens by DNA), and PreTRM, an LC-MS preterm birth risk predictor MAAA.

Both Guardant and Foundation Medicine have recently approved (FDA PMA) CDx liquid biopsy tests, and both were Breakthrough Devices.  Foundation Medicine applied for a liquid biopsy oncogene test PLA code in a prior quarter.

click to enlarge


The descriptors posted by AMA for these new PLA codes are subject to edits by the PLA committee.  


The next regular CPT deadline is November 6, here.

Saturday, October 17, 2020

My Video About the New CMS Colorectal Liquid Biopsy NCD

Here's my video and deck about Medicare's October 16, 2020, announcement of an all-new approach to covering future liquid biopsy tests that screen for colorectal cancer.

The first six minutes explain what happened and why it's important.  For those who want a deep dive, the next ten minutes provide that.  The jump-point between the overview and the deep dive is clearly marked.

If you'd rather go straight to the deck alone, I provide the PowerPoint link below, as well as at the YouTube channel.

Video here:

Video also here:

See my October 16 breaking-news blog here.


On October 16, 2020, the Medicare agency proposed to cover FDA-approved blood tests to screen for colorectal cancer. No such tests are currently covered, but they would be covered in the future as they emerge from FDA approval and receive medical association endorsements. Comment period is open for 30 days. Below, I provide links to the original documents and my blog on the topic. This video covers the essentials in the first 3-4 minutes, and then takes a deep dive in the last ten minutes. NCD PROPOSAL: -- TRACKING SHEET (HOME PAGE) -- DRAFT PROPOSAL (COMMENT BOX AT TOP) MY BLOG http://www.discoveriesinhealthpolicy.... POWERPOINT USED IN THIS VIDEO

  Informal transcript

Friday, October 16, 2020

CMS Posts Administrator's Ruling That Creates $75 and $100 Tiers for COVID testing

On Thursday, October 15, CMS announced it would drop the price of COVID high throughput testing from $100 to $75, at the same time, that it will implement a performance bonus of $25 per test for a 48 hour turnaround.

See yesterday's posting here Seema Verma had flagged the changed in a September speech, without this level of detail.

Today, Friday, CMS released the actual 10-page legal document supporting the policy change.  It's Ruling 2020-1-R2.  See it here:

On the same day, October 16, WSJ ran a story on rapid mass testing by Broad Institute for numerous New England colleges.  The WSJ says that some labs provide COVID testing on a 4 day timeline for $100, while Broad provides testing in 18 hours for $25.   (That assumes coordinated mass testing programs in place, though, it's not one-off retail testing of any patient.)


Collection to "Completed Test"

CMS clearly refers to a two calendar day turnaround from the time of specimen collection to the time of "completing the test."  I had a few calls from labs hoping the 48 hours was going to be from the time of lab receipt, not patient test.

Completed Test Means: Ready to Release

CMS defines a "completed test" as one that is complete and the report is "ready to be released."  Sounds like that has to occur by 11:59 pm on the third calendar day (e.g. Monday to Wednesday). 

Two Calendar Days

The policy refers both to "two calendar days" (not 48 hours).  I suspect a test taken at 8 am Monday and returned Wednesday is two calendar days, whether 8 am or 8 pm on Wednesday (but that's just a hunch).  I'm assuming that "two calendar days" does not mean a test taken Monday and reported Tuesday, which I would call "one calendar day."  

Don't Mess With Us and Wait Five Days by Batching

CMS strongly defends its reasoning in the Administrator's R2 ruling.  It notes that it priced  high throughput tests at $100, assuming they required high resources for fast turnaround.  CMS comments that some labs may have taken advantage of  the agency, and use economical limited resources and batching to produce tests at long delays of 3-6 days.  Continue doing that, and pay a financial penalty, says CMS.

Don't Just Push Part B to Front of Queue

CMS provides a rational for the "majority of cases in previous month" clause - a 51% rule - because it doesn't want labs to merely push Medicare Part B cases to the front of a queue and delay everyone else.  

Where is U0005?
In transmittal R1 last spring, CMS announced inside the Administrator's Transmittal the text of the new rapid codes U0003, U0004.  This new transmittal R2 does not seem to show us the text of the new code U0005, the $25 add-on payment.

Medicare FFS 
The program for $25 add-on payments applies only to Medicare fee for service.  Over a third of Medicare patients are in Medicare Advantage, half of patients in a few states.

Hospital Outpatient and ER
Normally, since about 2014, CMS has "bundled" or not paid separately most lab tests in the hospital outpatient and E.R. settings, including clinical chemistry and microbiology.  (Human genetic testing is paid separately).    However, CMS has specifically made COVID testing separately payable in the E.R. and hospital outpatient settings.

How Solid Are Administrator's Rulings?
Generally, CMS policy decisions and fee schedule changes must go through public comment (administrative rule making.)  I've heard it said that the positioning of these pop-up internally generated Administrator's Rulings is a little dubious under the Administrative Procedures Act, depending on the weight and content of the matter involved.

CMS sets up coverage for FDA colon cancer screening LBx tests - but proposes Epi proColon falls short

The Epigenomics Epi proColon test was the first liquid biopsy test to receive FDA approval, in April 2016 (here).  The test detects epigenomic DNA changes in the blood that are indicative of the patient having colon cancer, without the need for a fecal matter test or colonoscopy.   (Multiple companies such as Guardant, Exact, and others are now hoping for new tests with similar colon screening indications).

On January 28, 2020, CMS opened an NCD on the Epi proColon test (here).  The expected draft decision date was August 28, which CMS missed (here).

Meanwhile, this year, AHRQ is doing a broad evidence survey of liquid biopsy, presumably at the request of CMS (here).

Today, October 16, CMS released a response to Epigenomic's letter, a dramatic decision which will provide open ended coverage of FDA approved liquid biopsy colon cancer tests (or any blood-based biomarker) on a rolling basis, if they meet the criteria of 74% sensitivity and 90% specificity.  This proposed decision is big news, because it would mean rapid coverage for companies like Guardant and Exact and others with large FDA trials for liquid biopsy CRC screening tests underway.   However, the stated criteria (as a draft decision) leave the Epigenomics test non-covered.

On October 17, I posted a 15 minute deck and YouTube video about the NCD - here.

See Genomeweb coverage here.

On Monday, October 19, Exact Sciences was up +4%, Guardant Health up +2%, but both within their 5-day trading range.

The back story and links

On October 16, 2020, CMS released a proposed non-coverage decision on the Epi proColon test.

Tracking sheet here:

Request letter from company, April 2019:

(Note it was almost a year from the request to the opening).

The proposed position, with comment to November 15, is here:

It's an Interesting Decision

The decision is important for several reasons:

  • The decision sets out that in the future, similar LBx tests WILL be covered, if they have an FDA marketing authorization for CRC screening, AND
  • The test has sensitivity of 74% or better and specificity of 90% or better, against a colonoscopy gold standard, AND
  • The test is recommended by USPSTF or one major professional society guideline.
CMS likely chose 90%/74% because it's about the statistics achieved by a standard of care, the FIT test (here).  It's the performance expected by FDA for a first-line blood screening test that would substitute for FIT with similar performance.  

My reading? This is probably a big win for companies like Guardant if there test meets the 90%/74% rules provided in the NCD.  These are draft guideposts, and could change in the final NCD.

After the November 15 comment period, a final decision is expected by January 14.

I've clipped the full rules below the break.

A Nerd Note - That Really Matters  

There is a nuance here - generally, CMS NCDs have authority to cover screening tests AFTER they receive an A/B rating from USPSTF, and go through the additional later NCD process.  For example, a pancreatic cancer screening test.

There is a special clause in Medicare's statue that CMS can produce an NCD directly (without USPSTF) if the test is for screening prostate or colon cancer.  

A Signal How to Fix the Medicare Statute

I think this provides a good argument that Congress can drop the requirement that CMS coverage decisions for preventive tests can take place only after USPSTF approval (outside of colon and prostate tests).   

Here's why.  CMS has had the authority to make NCDs for preventive colon and prostate tests for twenty years, and has used that authority very cautiously and carefully.   CMS can also make similarly prudent, cautious and careful coverage for possible future FDA approved ovarian, pancreatic, or other tests, without waiting an unknown 2 or 5 or 8 years for such a test to be taken up by an underfunded and very slow USPSTF process.

CMS Oddity: CMS Issues Notice, No National Decision, Only LCD's, for ALLOMAP test.

CareDx is one of the leading genomics companies, with a market cap today of $2.5B (here).  Their pioneering product, covered by CMS since about 2008, was the ALLOMAP test, a test of WBC activation that can help manage heart transplant recipients.  More recently, CareDx has had a major achievement in the commercialization of the AlloSure test, which detects DNA secreted from damaged graft kidneys and helps manage renal transplant rejection.

In a proposed decision memorandum released today, October 16, 2020, CMS announces it plans NOT to do an NCD on the Allomap test.  CMS remarks in the procedural history, that an NCD had been requested in January 2013 (!) from Marc Halushka, Johns Hopkins.  

CMS concludes that 

We believe the proposed decision to continue to allow MACs to determine coverage of AlloMap® Molecular Expression Testing for Detection of Rejection of Cardiac Allografts is clinically appropriate and in the best interest of beneficiaries....due to the very low number of tests, which are used by << 1 percent of the Medicare population, and the need for careful patient selection, CMS believes that coverage of AlloMap is an appropriate determination made by the Medicare Administrative Contractors (MACs).  The MACs are structured to be able to take into account local patient, clinician and institutional factors, which are important when the overall prevalence is low.

CMS proposes this position as a public comment period for 30 days.

See decision here: 


Note the "comment" box in the header above.

See the tracking sheet here:

The PDF of the 2013 request letter (84pp with attachments) is online here:

Very, Very Nerdy Note: CMS Again Updates Proposed CLFS Prices for CY2021 (V4)


CMS holds public meetings each summer to price 100+ new lab codes for the coming calendar year.  CMS released proposed prices about September 22 with a comment period to October 21.   CMS has slightly updated this spreadsheet several times, most recently to "Version 4."  

If you want to be completely up to date, go to the CMS lab page here and look for Payment Determinations header and then for the zip file for CY 2021 - Clinical Laboratory Fee Schedule Test Codes Preliminary Payment Determinations (ver. 4) (ZIP).

Or Ver 5, if there is one....Tab B provides edits or corrections, there are now about 12, for example, code 81XX1 was granted ADLT status so it's being removed from the crosswalk decisions.

For example, there was a series of codes where public comment AND panel recommended crosswalk to 81315, but the CMS initial recommendation was to crosswalk the set of codes successively to 81315, then 81316, then 81317, then 81318.  It's now corrected so each crosswalk to the same and correct code 81315.

Thursday, October 15, 2020

CMS to Reprice COVID Testing: $75 for Slow High Throughput, $100 for Fast High Throughput



Initially this year, CMS paid $51 for COVID testing.   In April, CMS announced high-throughput codes that would be priced higher, at $100, to encourage investment, development, and rapid expansion of test resources.   This $100 price was announced via an Administrator's Ruling on April 14 - here.

On October 15, CMS announced a new policy that will pay $100 only for two-day turnaround of results.  Otherwise, even high-throughput testing will be discounted to $75 beginning January 1.

CMS made the announcement in a press release - here.   

  • CMS watchers will recall that Seema Verma flagged that some major change in COVID pricing was coming in a speech one month ago, on September 17 (news report here).

On Friday, CMS also posted the actual 10 page ruling - here.  This refers multiple times to 2 days time, relative to the specimen being COLLECTED (not accessioned at the lab door, as some labs hoped).

CMS argues that the full $100 payment for intensive resources and staff are only applicable in a lab that is resourcing fully for 48 hours turnarounds.

CMS estimates that the costs ($100) associated with high throughput technology, hiring staff, and other resource costs, are only incurred when laboratories complete the majority of molecular genomic CDLTs that make use of high throughput technology for the detection of SARS–CoV–2 or diagnosis of the virus that causes COVID-19 within 2 calendar days of specimen collection for all patients, not just for a subset of patients. 

According to the press release, the upcoming R2 will leave the existing codes intact, reduce the $100 price to $75, and create a new code U0005 for a $25 supplement.

In an interesting twist, while the CMS payment will apply only to Medicare payments, the payment of $25 will be given for Medicare patient IF the lab had two day turnaround time on "THE MAJORITY OF ALL" of its COVID testing in the previous month.  This seems to be written as an "AND" clause, see quote below, so the test for a certain Medicare patient this month must be in two days, AND ALSO, the tests for all patients in the previous month must (in the majority) be made in two days.  However, I'm not sure that the syntax, which is repeated after the (a)/(b) statement, is perfectly clear.   Clipped below. 

Not that this applies only to Medicare FFS patients (Traditional Part B); some experts think that in a few years this will only be half of Medicare patients, the rest being under Medicare Advantage. 


CMS writes,

"Starting January 1, 2021, the amended Administrative Ruling (CMS 2020-1-R2) will lower the base payment amount for COVID-19 diagnostic tests run on high-throughput technology to $75 in accordance with CMS’s assessment of the resources needed to perform those tests. Also starting January 1, 2021, Medicare will make an additional $25 add-on payment to laboratories for a COVID-19 diagnostic test run on high throughput technology if the laboratory: 
a) completes the test in two calendar days or less, and 
b) completes the majority of their COVID-19 diagnostic tests that use high throughput technology in two calendar days or less for all of their patients (not just their Medicare patients) in the previous month. 
Laboratories that complete a majority of COVID-19 diagnostic tests run on high throughput technology within two days will be paid $100 per test by Medicare, while laboratories that take longer will receive $75 per test."  


Wednesday, October 14, 2020

Medicare's Unorthodox Spending on Code 81408 in CY2019: 80% in Red States

81408 Isn't Just a Code, It's the HIGHEST PAID Genetic Code

81408 isn't just any CPT code, it's the highest-paid genomic code in 2019 (here).  Growth exploded, in round numbers, from $5M in 2017, to $100M in 2018, to $300M in 2019.   Everything about this story is bizarre.

80% of the 2019 payments for 81408 go to 2016's red states, and 100% of the 2019 payments go to red states plus NJ and DC, which are served by a MAC in an adjacent 2016 red state.


The Bizarre Explosion of 81408 Billing

I've previously reported that Medicare's overall molecular pathology spending has been rising dynamically, from about $500M in 2017 to about $1B in 2018 to about $1.7B in 2019.   See previous blogs, one focused on 81408 spending as a whole (here), one focused on the spending being 99% from Novitas and FCSO MACs (here), including data on who in particular billed that code in the most recent year with NPI-level data, which is 2017 (here).   

Early billing on 81408 in CY017 is associated with DOJ genetics fraud press releases and news stories in 2019.  

81408 in Medicare is ALWAYS Highly Anomalous

81408 is what AMA calls a "tier 2 level 9" code which holds a grab-bag of genes studied by full sequencing whose use is by definition rare, and often for obscure fatal pediatric disorders.

As I've discussed earlier, payments for 81408 are de facto extremely anomalous, because nationwide Medicare payments were almost zero in 2017 and earlier, and because later payments occur only in two MACs, which have policies that explicitly have no edits for 81408.  

In the other five MACs, 81408 is nonpayable as not medically necessary.  Said differently, the highest-paid CPT code in 2019, 81408, is medically nonpayable in 5 of 7 MACs.  

81408 Paid Mostly in RED States in 2019

A new data analysis today shows that 81408 in CY2019 was paid 78.5%, almost 80%, in RED states.

A few more findings.  

In Blue states, payment, if any went to NJ & DC.

First, while around 20% of 81408 payments were in blue states, it was highly focused, and never occurred in either NGS MAC or MOLDX MACs.   

Said differently, 19/21 blue states got ZERO payments for 81408.

Nearly 100% of the spending on 81408 in BLUE states was in either D.C. or in New Jersey, two (2016) blue states whose payment policies are governed by the Novitas MAC, which is in Pennsylvania, a 2016 red state.   

CMS MUE Edits for 81408 - OMG

Second, CMS medically unlikely edits are in place to help stem fraud, and provide no more than units of 1 for most genetic tests, but allow TWO UNITS PER DAY of 81408.   Again, absolutely unbelievable data. (I almost wrote, un-effing-believable.)

Why hasn't CMS released missing May 2020 date on CY2018 payments?

Third, and finally, in a departure from official policy, CMS has declined to release CY2018 payment data by NPI and CPT code, which it should have released in May 2020.  See blog on this topic here and see background here including my correspondence with CMS this fall.   

Since CMS isn't releasing the 2019 NPI/CPT data on the standard CMS website for this data, I've separately put in my own FOIA request this week, here.

Note that this data (NPI/CPT) should be released annually by CMS in May.  It's not ad hoc.  It reflects official policy positions of CMS (see here and see Federal Register, 79FR3205, January 14, 2014 here.)

Helping Voters Decide 

If 2018 data were released by CMS, as would normally happen last May, stakeholders could see ahead of the election whether recipients of the anomalous payments were also big political donors.


I note that 2019 81408 payments were 78% in red states.  

Obviously, in 2016 there were more red states, with an electoral count, roughly reflecting population, of 57%.  

However, as to the circa 44% population in blue states, who got 20% of 81408 billings, 100% of that went to only two places, NJ and DC, under the Novitas MAC.  19 of 21 Blue states, including New York, Illinois, and California,  had exactly 0% of the 81408 gravy train.  Which, as far as we know, may be as fast or faster in 2020 as it was in 2019.

Tuesday, October 13, 2020

Palmetto's Public DEX Data Shows How Indicted Lab Invades Medicare, Gets Payable Z Codes

In a series of blogs over the last several weeks, I've discussed the explosion in spending for CPT code 81408, which came out of nowhere in 2017 to become the highest-spending CPT code in MoPath in 2019.  See here.

LabSolutions in the Press

As I explained in that blog, in 2017, LabSolutions in George became one of the first-ever labs to bill 81408, with about 60% of national payments for 81408 in 2017.  (Anomalously, CMS has not released its 2018 lab payment data, it's late and I think it's being held til after the election.)  For a September 2019 story about LabSolutions here.  (FN1) For a November 2019 story here.

LabSolutions at Palmetto DEX/MOLDX

Since Georgia is a MolDx state, LabSolutions had to apply for Z codes.  While Z codes are used internally at MolDx, the labs and tests and whether tests are covered by Medicare can be found in a public website run by Palmetto here.

You get a webpage at DEX for LabSolutions LLC, and you gets its NPI, lab director, and address.  

A Full Profile of Expected Lab Billing to CMS

LabSolutions has been issued 113 Z codes (test entries each match a (hidden) Z code.  Very few labs have that many Z codes.  This means you can get the full profile of every test that LabSolutions felt should be entered for future Medicare payment.

Moreover, even on October 13, 2020, many of the codes for LabSolutions are still publicly listed by the Palmetto MAC as being "payable."

Payable codes per MolDx for LabSolutions today include BRCA testing, CYP2C19, CYP2D6, MSH6, and many more.  (Detail here).

It's unclear how MolDx handled the tech assessments for sequencing tests, as the lab allegedly appeared to be a shell outsourcing the test services to others in some cases (here) - according to Reuters.
Like all information on the public DEX website, this information is also available in a Master Edit File circulated to all MolDx MACs to control their payment rules, and obtained from time to time by outside parties via FOIA (here).

While Palmetto covered a lot of codes billed by LabSolutions LLC, it did not cover 81408 genes.

Medicare Advantage - Handcuffed to MAC Coverage Like it or Not

Medicare Advantage plans are required to cover all services covered by any "written decision" of MACs, such as Palmetto GBA LLC.  (Here).  Since the DEX website is a written work product of Palmetto GBA LLC, branded as Palmetto GBA LLC, publicly Medicare-covered LabSolutions tests may have to be paid even today by Medicare Advantage plans, even if for some reason Palmetto MAC itself has issued internal edits not to pay for them.  DEX specifically states, as shown above, that some LabSolutions tests have public states as "Palmetto, Medicare, Covered." 

One of the very largest recent Medicare Part B fraud cases involving the lab industry occurred in a Palmetto GBA MAC state, Virginia (here).



The cited article states, September 2019, that 

"Mina Patel, the owner of Atlanta-based LabSolutions, was charged in federal court in Miami last week with 13 counts including conspiracy, health care fraud, conspiracy to defraud the government [etc]." 

The article adds that Patel "billed Medicare for more than $494M" and that DOJ seized $30M and a Ferrari from Patel.  Another articles says that Medicare payments were $154M 2016-2019.

The lab's attorney asserted there were misleading statements by parties seeking to lighten their own sentences (here).  "The conduct of LabSolutions and Minal Patel was based on the advice of lawyers."

LabSolutions data also here.

Monday, October 12, 2020

Reimbursement is not Inherently Dangerous, but Unforgiving of Neglect

This morning I had the chance to do a 45 minute interview on diagnostics and payers for a class being held at ASU in its diagnostics policy center.   

Both the interviewer, Pierre Casseigneul (founding CEO of CareDx) and I have pilot's licenses, though mine's been inactive for quite a while.   

The discussion reminded me of a plaque I've had for decades:  Aviation is not inherently dangerous, but it's terribly unforgiving of any carelessness, incapacity, or neglect.

Like aviation, health-tech reimbursement is partly intuitive but our health system is overlaid with very complex, unavoidable, and arcane rules that take a long time to master.   And they are unforgiving of neglect.

And any major mistake can trap a company very fast.  

  • For example, a company might start with $500,000 in angel funds and only learn a year later, after much invested time and late nights, when seeking Series A funds, that its inpatient product is bundled to a hospital inpatient DRG and will be nearly impossible to sell or to get further funding.  
  • Or a scientist founder may have no grasp at all of the cost and time and effort to obtain "share of mind" with doctors and become a standard of care.  

But like aviation, when everything goes right, it can be thrilling!

Friday, October 9, 2020

Very Brief Blog: Startup with Tiny Handheld Raises $60M, Gets FDA EUA, Raises Extra $10M from NIH RADx

Visby Medical, a team I was able to help in their early planning phases for commercialization a couple years ago, has had a run of good news this year.  Their product is a tiny molecular testing POCT handheld device. See my September note here.

In April, early in the COVID epidemic, the Stanford spinout raised $70M.   In September, they got an FDA EUA for their highly innovative device.   In October, they announced an additional $10M from the NIH RADx tech investment fund.

See latest announcement here.

Very Brief Blog: Medicare Genetic Testing, $117M Indictment

DOJ announces an indictment for "bribes and kickbacks leading to improper billing" - $117M against the owner of "Specialty Drug Testing LLC" in Monroe, Alabama.

DOJ here.   Local news story here.

Easy Internet Research - Will CMS Release 2018 Data?

In the past several weeks, I've run a series of articles showing that a lot of Medicare fraud - in the many hundreds of millions of dollars - can easily be gleaned from available CY2019 data at the state and national level.   This can be tied to specific CPT codes and specific edits (or lack of edits) at a minority of CMS MACs.   DOJ has estimated the fraudulent charges in the last year or two, on genetic codes alone, exceeded $2 billion dollars.  This creates large anomalies in the public CMS data.  

The DOJ press release we're discussing today gives the lab here as Specialty Drug Testing LLC.  A quick google search gives the NPI as being 1639577091.  (Here.)   Then turn to the Physician (Lab) Utilization Database at CMS, which is currently updated through 2017.  (2018 data should have been released in 6/2020).   There, go to CY2017 and search on the NPI number.  

This gives you all paid claims by CPT code and dollar amount for Specialty Drug Testing LLC from CY2017.  The 2017 claims were modest, only $864,426 in total.  The spectrum of 2017 claims was as follows (click to enlarge):

Whatever resulted in $117M of charges found by the DOJ by 2020, it clearly occurred after CY2017.

Where is CMS CY2018 Data?

CMS normally releases provider/calendar year claims paid data on an 18 month delay - e.g. June 2019 for CY2017, and June 2020 for CY2018.  CY2018 data has not been released yet (here).  

CMS data staff are vague as to the cause of the delay (see prior link and here).   

In addition, I've had a personal encounter with a MAC declining to release typically available data, and a client has had a MAC state that no FOIA data was available on a topic that HAS to have FOIA data available.   So:  Is a picture emerging that CMS cracking down on release of FOIA data in the weeks before an election?   You decide.

If so, CMS would be backtracking on publicly made policy decisions from 2014/2014 following FOIA-based court cases (here)(cloud copy here).

Wednesday, October 7, 2020

Legislators Attack HHS Decision on LDTs, FDA Stops EUA Review for LDT Tests

In mid-August, HHS abruptly announced that FDA was blocked (by HHS) from reviewing LDTs.  (See entry point and links here).

Letters from House to HHS

On October 7, several legislators in the House released a public condemnation of this decision, via a press release and via a public letter to HHS Secretary Alex Azar.  See the six-page public letter here.   The press release is clipped below the break.

More: FDA Stops EUA Review for Local LDTs

Also on October 7, FDA announced that it would not review LDTs for COVID EUA status - here.  

This latter FDA move is important because some COVID testing laws for commercial insurers and payments depend on whether tests have been FDA-reviewed (e.g. cleared, approved, or EUA).  See page 3-4 at this HHS PDF here

Regarding FDA stopping LDT review for EUAs, articles here and here.  It's been suggested that FDA wants to prioritize review of POCT and high-throughput IVD tests, rather than local LDT tests. "To make the best use of our resources for the greatest public health benefit, FDA is declining to review EUA requests for LDTs at this time," stated OIVD director Tim Stenzl.  "We are currently in a different phase of the pandemic with respect to tests than we were previously," he added.

Back Story: HHS Memo to End LDT Review

The House letter cites an October 2 Politico story that revealed a 17-page legal memo drafted at HHS that undercut FDA's arguments it had statutory authority to review LDTs in the first place.  Politico here, PDF of memo released here.  (24 mb).  The legal memo dates to June 22.  It amounts to a master class in FDA history regarding LDTs, written toward the endpoint that FDA can't regulate LDTs.  

There is also a "two-pager" FAQ at HHS about the recent changes in FDA and LDT policy (here).  The FAQ notes (its last question)  that FDA review is required to get certain legal benefits for COVID tests.


I've bundled some key documents in one zip file in the cloud, here.