Monday, January 17, 2022

Catching Up With MolDx: December Meeting on Rheumatoid Arthritis Therapy Selection

On December 7, 2021, MOLDX held a multi-jurisdictional advisory meeting on the topic, "Predictive Testing to Guide Targeted Therapy Selection in Rheumatoid Arthritis."

The webpage is here:

This is framed as a MolDx meeting, but many of the questions were directly on the drug therapies themselves (for example, different tolerance profiles of different TNF inhibitors), and only a few questions focused on targeted diagnostics.  The "PrismRA" test was mentioned a few times.

The questions, panel ratings of the questions, and transcript are posted online, as well as links to videos.  See link above or see the cut/paste below the break.

The transcript is worth reviewing for insights into the way MolDx medical directors think and the experts they were interviewing were focused and articulate.

Sunday, January 16, 2022

The Government *Can* Require Vaccinations: Supreme Court History

We often hear conservative politicians emphasizes to audiences that the government can't make you get a vaccine.   That's misleading, based on Supreme Court precedents that were touched upon last week's vaccination cases.

Last week, there were two highly discussed Supreme Court decisions (links below).  Both were, technically, temporary decisions (to postpone or allow an implementation, not to decide a case in a final way).   

  • The Supreme Court put on hold an OHSA regulation that would have required vaccination (or weekly testing) at large employers.   
  • The Supreme Court did NOT put a hold on an HHS regulation that requires nearly all health care workers at institutions to be vaccinated.   

Although I don't like the "conservative" and "liberal" nomenclature at all, the "conservative" justices lost the HHS healthcare institution decision, and left behind a dissenting opinion by Justice Thomas.   Here, they brought up an argument they didn't need to voice in the OSHA case, since they had already won that one.    They noted that our federal constitution was created by the states in 1788 and retained all governing powers to the states, that weren't transferred to the federal government.  For example, raising an Army, declaring war, international treaties, and regulation of disputes between the states are some of the enumerated federal powers in the various Branches and Articles of the Constitution.

Thomas noted that vaccinations belonged to the legitimate authority of the state level, and not the federal level.   Thomas cited to Zucht v King 1922.   Zucht is a short dismissal of a state vaccination case, the point of which is to refer back to the prior and authoritative case, Jacobson v Massachusetts, 1905.   Both cases support the authority of states to create and enforce vaccination laws.   Opponents of state-based vaccination mandates lost in the Supreme Court.

So if a state governor, say, in Florida, says, "The government has no legal right to require vaccination!" that's not really true, unless the Constitution of Florida specifically governs that.  In general, Supreme Court precedents allow state legislatures to create vaccination mandate laws.  A governor can give a speech and promise not to do vaccination laws, but he and the assembly could do them, absent a local state constitution saying otherwise.  


Jacobson v Massachusetts, cited in briefing documents multiple times but cited just once in the 65pp of final opinions and dissents, remains an interesting read.  Basically, Jacobson argued first that vaccination violated the preamble of the Constitution (promote the general welfare and secure the blessings of liberty.)  Judge Harlan said that was not controlling law and too vague a standard to apply.   Jacobson argued that vaccination violated "the spirit of the constitution," which Harlan also dismissed quickly.   Jacobson argued a range of findings of fact, points which had been lost at lower trial courts and were not re-ligitated.   Finally, Jacobson argued that vaccination violated the 14th amendment (not to deprive of liberty and property without due process), which Harlan dealt with more carefully but found unavailing.   

Harlan 1905 attributes vaccination authority to the "police power" of the several states, which sounds grim, but I believe it's a term of art that means the general governing power of the state.  See a contemporary 1907 article in Columbia Law Review, by Cook, "What is Police Power?," writing, "no phrase is more frequently used and at the same time less understood."  

Zucht in 1922 was a girl wanting to attend Texas public schools; the vaccination was smallpox.


AMA attorney on the new cases here.  Discussion at MedPageToday here.  At HealthCareDive here.

OSHA Case (no vaccination per SCOTUS) here.  (Prior documents here.)

HHS health system case (vaccination can proceed per SCOTUS) here.  (Additional docket PDFs here).

Zucht 1922 here.  Justice Brandeis.

Jacobson 1905 here. on Jacobson, here.

Deeper dive, 2021, at National Constitution Center, here.


The Jacobson case reminds me again that SCOTUS opinions of the mid 1800s and early 1900s, like this one, are often clearer and more easily read than novels of the day, say Edith Wharton or Henry James from 1905.

The OSHA prior documents include remarkable dissents by Sutton (pdf p. 65) and Bush (pdf p. 92), the latter tracking policy back to 1822 for originalists.  He also cites Cass Sunstein, 2008, "Is OSHA Unconstitutional?" (here).  

Saturday, January 15, 2022

AMA Publishes January Applicants for New PLA Codes

 The AMA takes applications for new PLA codes quarterly and handles them within several weeks.  For the January 2022 quarter, the submitted PLA applications have been posted.   Interested parties can follow instructions on the linked PDF to review particular applications; apply to AMA by January 20, the comment request deadline.  If that is the request deadline, you have to turnaround a comment promptly as the PLA committee meets January 25.   Final voting occurs in conjunction with the February 3-5 general CPT meeting.

Find the agenda PDF listing the codes HERE.   The PLA home page is here.   Find the dates deadline here.

Quick Tally

I tally about 12 codes, a couple of which are minor revisions.  Two are microbiology - a metagenomic test from Hopkins and a sexually transmitted infection test from Bridge Diagnostics.   There is a cancer optical genome mapping test.  Among publicly held companies, Guardant applies for a Guardant360 code.  There is also a very complex cancer test "OncoMap Extra" which brings together the DNA exome, the RNA transcriptome,  and markers like TMB and MSI.   

Nerd Note 

At one time, AMA required exact gene numbers for multi-gene tests, but now they allow more flexible nomenclature like "83 genes or more."   

Thursday, January 13, 2022

Hearings on the Hill: House, New Med Tech (Dec 8), Senate, Covid Omicron (Jan 11). Bonus: Amy Abernethy Futurism.

Two interesting Congressional hearings in the past weeks.


On December 8, 2021, House Energy & Commerce held a 3.5 hour hearing on "Future of Biomedicine: Translating Biomedical Research into Personalized Health Care."   Speakers including Amy Abernethy (Verily), Atul Butte (UCSF), Leroy Hood (Institute for Systems Biology), Lloyd Minor (Dean, Stanford).   

  • Find the Congressional website here.
    • This includes links to streaming video plus links to PDF prepared testimony.
    • Bonus!  I provide an auto-transcript of the hearing.  Here.  58 pp.
    • Bonus!  I provide the PDFs in one zip file here.


If you're a fan of Amy Abernethy, see a 26 minute interview with her, January 13, 2022, at Health Care Blog, link to video here.  

Title is: Futurecasting with Amy Abernethy: Verily, Real-World Data, Clinical Trials & Health Policy in 2022.



See the website for the Senate HELP committee hearings on January 11, 2022, on the Administration's response to COVID Omicron.  Speaking? The usual top level leadership, Rochelle Walensky of CDC, Anthony Fauci of NIH, Janet Woodcock of FDA, Dawn O'Connell (Assistant Secretary, HHS). 

  • Find the Congressional website here.
    • This includes links to streaming video plus links to PDF prepared testimony.
    • Find an autotrascript of the four hour hearing here.  66p.
    • Find a zip file of the 4 prepared PDFs here.
    • See coverage of the sometimes fiery hearing at Bloomberg here.

Amy Abernethy at House Hearing, 12/2021


Some crude page numbers for topics in Dec 8 hearing, here.

Nerd note.  I rarely see the term PHENOME, used several times by Dr. Hood.  However, it appears in a new JAMA headline in Bastarache et al. here.  JAMA Cardiol headlined the term in an A-Fib and genetics article in 2019, Salem et al., here.

Phenome use frequency at PubMed. 2021 usage count was #917.  Shown.  Used as title word, #60 times.

Revisiting the Stormy and Controversial Legal Path to "Coverage with Evidence Development"

On January 11, 2022, CMS released a proposed decision on the class of present and future anti-amyloid Alzheimer drugs, allowing them to be covered only in a randomized clinical trial (entry point here).

This is called "CED" or "Coverage with Evidence Development."  Payment for services under CED, and the rules for when it is OK or not OK, are predicated on an obscure phrase in the Medicare statute that has become controversial from time to time.  

In fact, the Trump administration issued an order in January 2021 that CED, as currently used, was not legal under the statute.   This blog revisits some of the links.

  • See the five minute YouTube version of this article, here.


Typical Medicare Statute: Benefit at 1861, Restriction at 1862

Early in the Medicare statute, there is a phrase that says Medicare is a program for medical and other health services.   Then, further along, at SSA 1861, we find definitions (such as "physician") and this section includes a definition of what Congress means by "Medical and Other Health Services," placed at SSA 1861(s).  

The term means "physician services" (see definition of a physician!), "services incident to a physician," "diagnostic tests," and so on.   This goes on for 2000 words, and while some benefits are 3 words and some are 50 words, let's say the average is 15 words - that's 130 benefits, more or less.  For example, "physician services" are a two-word benefit, while an "oral drug used as anti cancer drug" is a 65 word benefit.  

OK, that defines benefits.  

What are the restrictions?  These are found at SSA 1862.   Most famously, see 1862(a)(1)(A), medical may not pay for services that are not reasonable and necessary to diagnose or treat disease.   So 1861 tells us that physician services, and diagnostic tests, and oral anti-cancer drugs (among many things) are Medicare program benefits, while 1862 tells us that payment is impossible if they are not reasonable and necessary.   

CED Justification Actually Found at 1862 - As a Restriction to Medicare

The justification to CED is actually found, not at 1861 (where clinical studies of AHRQ might have become a defined benefit) but at 1862 (where services not reasonable and necessary for AHRQ studies, are NOT a benefit.)

At 1862, we find the odd phrasing:

  • No payment may be made under Part A or B for any expenses for items and services {necessary for treatment of illness} {except for...}
  • (E) in the case of research conducted pursuant to SSA 1142, which not reasonable and necessary to carry out the purposes of that section.  

SSA 1842 is AHRQ law.

So when CMS says CED is justified by SSA 1862(a)(1)(E), what they are pointing to is a law that CMS cannot pay for services not fulfilling the goals of SSA 1142.  It never says that CMS "can" pay for services fulfilling the goals of SSA 1142.

So we can summarize how Section 1861 and 1862 work in this table:

Click to enlarge

But Wait, There's More: Confusing Adjacent Uses of "Reasonable and Necessary" Phrase

Notice that the term "reasonable and necessary" is being used in completely different ways.   In 1862(a)(1)(A), "reasonable and necessary" is in regard to human medical care for patients with diseases.   OK, we know what that means.   In 1862(a)(1)(E), "reasonable and necessary" is used in regard to "purposes of AHRQ research" which is a completely different domain or concept.  

While SSA 1142 is long, 1700 words, and the word "support" occurs 11 times, the top line purpose of AHRQ in this section of law is to "conduct and support research with respect to outcomes, effectiveness, and appropriateness of health care procedures."

What CMS Thinks (2014)

CMS, as an agency, believes it has broad authority through National Coverage Determinations, to issue coverage restricted to clinical trials, or registries, or other research pathways, as it sees fit.   CMS last elaborated on the legal status and implementation policy for CED in a long web article on the CMS website in 2014 - here.

What General Counsel at HHS Thought in January 2021

There have been multiple cycles of legal debates regarding what the CED law (e.g. the phrasing at 1861(a)(1)(E) pointing to SSA 1142) means.   Note that this section is phrased in the negative; CMS an't cover services not reasonable and necessary to treat disease, and can't cover services not necessary to support SSA 1142 aka AHRQ.  

January 2021.  In January 2021, the outgoing Trump administration posted a legal Advisory Opinion of General Counsel of HHS, at that time led by attorney and HHS Secretary Alex Azar.  While later deleted online by the Biden administration, a cloud copy is here.     This memo provides some behind-the-scenes insights.  For example, it says in the agency file (internal file) for each NCD with CED, there is an email or letter from AHRQ saying it "supports" the NCD.  

The key point is: Then-HHS General Counsel Robert Charrow opined that such a "note to file" is insufficient to meet the standards of "support" in its reasonable meaning in place in the legislation.   

(I would put it this way.  If we hear that, "NIH supports the Johns Hopkins Cancer Institute," you wouldn't expect that to mean solely that someone at NIH sent an email to Johns Hopkins, "Fine cancer center - keep it up" and thus "supporting" the cancer center.)

Understanding New NCDs that Point to 1861(a)(1)(E)

This provides some background why all the CED NCDs, such as the Amyloid Drug NCD just proposed, carefully refer to 1861(a)(1)(E), and carefully cite AHRQ as an cooperating agency.   

The first point of this article is that CED is so debated, and requires pages of justification by CMS, because the statutory background is so weird and implicit.   Look: CMS never write a 20-page memo justifying if it can provide hospice benefits, because statute at 1861(dd) point-blank creates hospice benefits.  No such section at 1861 affirmatively creates AHRQ support.

My second contribution would be to point out that judging whether a service - like this pill here for John with this disease - is "reasonable" and is "necessary" to treat a disease is very different than asking whether something like "a clinical trial" is "reasonable" and "necessary" to support a goal of an abstract entity like an agency.  (Or at least, what an agency "wants" and "needs" and how it has a "goal" or "purpose" is abstract, in a way John on a certain day and in a certain medical office, and his cancer, and his pill are not.)


Other Notes

Book.  Twenty years ago, in 2000, National Academies of Science released a book on "Extending Medicare Reimbursement in Clinical Trials."  It's still online as a free PDF here.

Little-Known Payment Law.  MIPPA 2008 law added a clause to Medicare payment policy, at SSA 1833(w), allowing Medicare to alter payment rules in the context of clinical trials.  This has no implementing regulations or policies, and I'm not sure if it's ever been used (as a self implementing regulation) but the idea would be to adjust or change copays and payments to preservice blinding (masking) in RCTs that have double blinding.

"Reasonable and Necessary."  AT 1862, the phrase is used first in regard to health care and immediately later, in regard to goals of AHRQ.   Yet there must be a sea change in meaning between one phrase and the other of the identical twin usage.  For example, CMS defines "reasonable and necessary" as "not investigational," but everyone would define an RCT as "investigational."   CMS would never define a placebo as "necessary" to treat disease, but a placebo might be "necessary" toward a trial that is a research goal of AHRQ.  

CMS phrase, "Trials supported by NIH."  Charrow wanted to define "support" narrowly and CMS defines "support" broadly (e.g. AHRQ note to file stating "support.")   This broad definition at CMS becomes very helpful when we turn to CMS supporting (in CED) trials "supported" by NIH, since NIH wouldn't need to fund the trial, or mostly fund it, but only "support" the trial.  Charrow wanted to define "support" narrowly and CMS defines "support" broadly (e.g. AQRQ note to file stating "support.")   This broad definition is helpful when we turn to CMS paying for (in CED) trials "supported" by NIH, since NIH wouldn't need to fund the trial, or to mostly fund it, but only to  "support" the trial.   

What I think it all meant.  Clearly, Congress meant "something" by 1862(a)(1)(E).  I think they intended that AHRQ would plan trials that included routine clinical costs, experimental clinical costs, and administrative costs (which can be large).   CMS would pay routine clinical costs anyway.   1861+1862 allows CMS to pay necessary clinical costs that were beyond routine clinical costs.  AHRQ would still pay for administrative costs or other costs (e.g. AHRQ plans and "supports" the trial.)  As it is, CMS has pretty much unfettered CED at scale.   A CED trial with 10,000 patients and a $30,000 drug would involve $300M dollars (or $150M if discounted for half placebo).   An NIH trial at that scale would never exist but other large NIH trials would have enormous amount of vetting before NIH spent even $10M or $20M.   

1862(a)(1)(E) was Drafted to be Confusing.  The more times I re read 1862(a), the more the piled-up clauses and "except for's" and double negatives are confusing.  It would be simpler if 1861(s) had a written benefit for support of AHRQ trials, and then regulations and rulemaking as to what that means.

CMS Coverage in Clinical Trials - Dates to 1980.   See a fascinating 2017 paper by Roger Evans, who was involved in 1980 decisions about heart transplant policy.   I wrote about the era, informally, in a 2015 blog.

SCOTUS: Legislators Do Not Hide Major Principles.  I argue here that the CED law is, at best, murky.   There are long CMS arguments about if, when, or how it can do CED at all.  In contrast, there are no long murky arguments if CMS can offer hospice benefits, you just point at 1861(dd), or physician benefits (1861(s)(1)), or diagnostics (1861(s)(3)).   The current SCOTUS case about CMS requiring health system personnel vaccinations notes "We presume Congress does not hide fundamental details of a regulatory scheme in vague or ancillary provisions," Whitman v American Trucking, SCOTUS, 2001.


Wednesday, January 12, 2022

CMS NCD Proposal for ADUHELM; Will CMS Cover Larger Registry Trials if "Supported" by NIH?

On January 11, 2022, CMS released the proposed version of its much-debated NCD on amyloid-directed monoclonal drugs in Alzheimer's disease.

The event got widespread rapid news coverage as well as a CMS press release.  In short, both ADUHELM and future in-development Alzheimer monoclonals will be covered by CMS only in the limited and controlled setting of RCTs, and, "trials supported by NIH."  The latter may be an important clause, as I discuss below.   Comment is open 30 days and final decision (which may vary from this proposal) is expected April 11.

CMS press release here.

CMS NCD proposal and entry to comment portal, here.

Read the book, see the movie.  I've produced a brief two minute video about the decision, at YouTube, here.

Key Points of the Proposal

Trials under Coverage with Evidence Development must be randomized controlled trials reviewed and endorsed by CMS as meeting quality criteria, or, trials supported by NIH.   Trials must be hospital-based and must have populations similar to the  national demographics of Alzheimer's disease (in particular, adequate minority populations.)   Nothing written here limits the number or size of trials.   Each patient can get one amyloid PET scan (something which is not otherwise covered by CMS.)   After an RCT is run, the patients may continue on drug, with drug payment, in a long-term registry.  As written, the conditions apply to future Alzheimer monoclonals in the amyloid class, even if they might have stronger primary trial outcomes than existing drugs.   

At least some of the supported trials will overlap with FDA trials required by the accelerated approval.

Whether CMS can do "Coverage with Evidence Development" NCD's has sometimes been controversial; here.

"Supported by NIH" - Possibly, Potentially, Maybe Broader?

Here's one small twist, and it is ONLY hypothetical.  The language covers trials reviewed and endorsed by CMS, and, trials supported by NIH.   If you read the grammar carefully, it sounds like trials "supported by NIH" do not have to be entered into separate review by Medicare.   

Here's a theory, and it's only a theory, based on a close reading of the grammar.  There are over two dozen NIH supported Alzheimer Disease Research Centers, or ADRCs.   They often conduct trials partially supported by the core NIH grant funds (for management, databases, etc) and funded additionally by other sources (pharma, foundations, donors, etc).   Let's say a pharma runs a registry study at one of these centers, funding 90% of it, with part of the management funding attributed to the NIH grant.  This is a study supported (in part) by NIH, but might be more of the high-quality registry type, and since it is in part NIH supported, it seems to fall into a separate track from the RCT studies discussed in the NCD.  

Lots of Press

Within hours, there were countless articles about the policy proposal. 

  • NYT here
  • NPR here.
  • USA Today here.
  • AP here.   Fox here.
  • Axios here.
  • The Hill here.
  • Website "Being Patient," titled, "Why Everyone's Mad" here.
  • Flurry of coverage at STAT open access - here, here.  Subscription here, here, here.
  • Rachel Sachs covers the decision for Health Affairs here.
  • For more on Biogen's response, on January 13 at Endpoints, here.  BioPharmaDive here.

It's only a hypothetical, quote above, but to my eye, the grammar above separates trials "reviewed by CMS" and "meeting CMS criteria" from other trials - "or trials" supported by NIH.   


Nerd Note.

Billing, blinding.  As if this is the first "nerd note" in this blog.   CMS proposes randomized controlled trials, which are often blinded (doctor & patient), but how do you bill them?   Coverage with Evidence Development pays for "the drug."  It pays for "the treatment" under CED.   Do just half the patients get a copay?  How does the hospital bill for "the drug" in half the patients don't get the drug, but placebo?   Does CMS pay $14,000 for all patients, knowing that 50% got a $28,000 drug?  I think CMS has wrestled this bear to the ground before, but it's a gnarly one.   And the doctor's office, if an infusion, can't bill for the drug unless he buys and takes ownership of the drug, which may be true for the hospital as well.   And CMS isn't paying Biogen for the drug, presumably, it pays doctors and hospitals for drugs.   CMS has rarely done any placebo RCTs on drugs and even rarer, or never, so there are some pitfalls here to figure out.   CMS has the authority to alter payment systems used within clinical trials (with an eye to blinding etc), SSA 1833(w), but it still has to figure out HOW to do so.   This provision came from the MIPPA 2008 Section 184.  

CED policy.  Long 2014 CMS essay about the topic, here.   Short HHS Advisory Opinion in January 2021 (Trump Admin) that CED was illegal - later deleted by Biden - here.  Full article by me here.

Equity.  Even without considering the copay difference and "blinding," for the many minority or very poor patients, even $50 copays are too high, let alone the 20% or over $5000 copay for Aduhelm.  That is another barrier to entry for CED-based equitable enrollment.  STAT interviews experts on equity issues here.

Friday, January 7, 2022

Very Brief Blog: Yes, CMS Does Plan to Revisit "MCIT" Breakthrough Technology Policy

From August 2020 to December 2021, the Trump then Biden administrations put out successive comment rounds and rulemaking announcements about "MCIT," Medicare Coverage for Innovative Technology," which provided 4 years of coverage at Medicare after a device was cleared through the breakthrough pathway (whether specifically de novo, 510(k), or PMA).   The rule was finally canceled in November, see back story and links here.

However, the concept lives on as a section of the omnibus legislative package 21st Century Cures "Version 2022."   

Meanwhile, the Office of Regulatory Affairs in the White House has posted a notice of future (eventual) rulemaking on the topic.  The new policy, when it is finally crafted and proposed, will be retitled, "Transitional Coverage for Emerging Technologies."  We read, "This proposed rule would establish the criteria for an expedited coverage pathway to provide Medicare beneficiaries with faster access to innovative and beneficial technologies."  To be continued.

  • See the placeholder webpage here.  

This page will also list (via the "12866" link) any meetings held between public stakeholders (e.g. AdvaMed, etc) and the OMB.

click to enlarge

Thursday, January 6, 2022

Very Brief Blog: CMMI Grapples with "Direct Contracting" Messaging

Very early in the Biden Administration, HHS appointed long time Washington policy expert Liz Fowler as head of the Center for Innovation (CMMI) - here, here.   The potentially powerful CMMI program regularly announces a new strategic direction, most recently in October 2021 (here).   Current themes include "health equity," and "streamlining the number of CMMI models," and "encourage care delivery transformation."  They'd like to "use tools to support transformation" and achieve "high qualify, affordable, person-centered care."


I'm sensitive to whether in the lab industry we underestimate some of the underlying secular trends, such as telemedicine (Where do blood draws get taken?  Where do the samples go?) and surprise billing (new laws; but how do they change contracting for non-surprise-billing by shifting the landscape?)    While it's only a proposed model, it's seemed to me that the CMMI "Direct Contracting" models could also have rolling impacts on the lab industry.   

Despite all the other events - "January 6" and "Omicron" - direct contracting surfaces in the news this week.   See a detailed discussion at MedPageToday on January 4 by Joyce Frieden - here.  See long interview extracts online on January 3 at Advisory Board - here.   

Personalized Medicine at CMMI?

In its ten years, CMMI has generally not promoted particular technologies (like genetics) unless very broad (like telemedicine).   However, of note, the current Chief Medical Officer at CMMI is Dora Hughes MD - announcement from last summer, here.  Dr. Hughes worked for Senator Obama before 2012, and under Obama Secretary of Health Kathleen Sebelius.   She later had positions at the Sidley Austin law firm in its policy group, and then on the faculty at George Washington University. Recall that Obama had been interested in personalized medicine as early as his Senate career, and genomic medicine was a focus of then-VP Biden.

Very Brief Blog: Brookings Report on "Precision Medicine Through Agile Governance"

New report from Brookings to kick off January 2022, "Advancing precision medicine through agile governance."  Find it here:

There are three authors, Kevin Doxzen, Landry Signe', and Diana Bowman.  While applied to precision medicine, the work by Doxzen et al. tees off from previous writings by Landry Signe' on economics and agile governance in general - here.

If you like the topic of regulatory reform and agile governance, see also this paper:

  • Bridging the Gap: The critical role of regulatory affairs and clinical affairs in total product life in pathology imaging devices and software.  Kearney et al. (open accss) here.
  • Laboratory-developed tests in the new European Union 2017/746 regulation: opportunities and risks.  Vogeser et al. here.
  • Temporary regulatory deviations and the COVID PCR Labeling Update Study indicate what LDT regualtion by FDA could look like.   Marble et al. (open access) here.
  • National maintenance cost for precision diagnostics under VALID ACT of 2020.  Huang et al. here.

Very Brief Blog: Flagging a Great Article by Matthew Holt: Simple Bills Aren't Simple

Journalist and health policy expert Matthew Holt offers a detailed and well-researched blog on the theme,, "Simple Billing is Not So Simple."  

I regularly get YouTube ads for One Medical and similar organizations, "new medicine," "simple bills," "no confusion," and so on.   Holt tracked down all the paperwork (multiple levels and layers) behind his annual One Medical visit.  

  • It turns out that behind the scenes, there are still mountains of paperwork, obscure stacks of CPT codes, charge-to-payment ratios, allowed and disallowed costs, going on between One Medical and his BCBS insurer.

Loved it.

Find the article here:


If this is of interest, see my article about Medicare Advantage denial rates, especially for lab tests, yesterday, here.


See an interview with Liz Fowler, head of CMS Center for Innovation, "We are committed to moving away from fee for service."  But One Medical's interactions with BCBS have a completely old-school FFS infrastructure, as Holt shows.   See another interview where Fowler more or less agrees with real-world comments than a non-FFS, value-only system is still far in the future.   

Precision Diagnostics for Drug Selection: Context Counts

In one of my favorite articles of 2021, Adashek et al. pointed out that even with modern expansive genomic testing, most cancer patients do not have a precision-guided option (article here, Nature Cancer 2:369, 2021).   They don't have EGFR, don't have BRAF, don't have KRAS, etc.  Across the field of oncology, we need more precision medicine tests, and good ones, for more patients.  

Is it decisional?

Another topic is whether a precision diagnostic to guide therapy selection is strong enough to be decisional.  The classic example would be a population where 50% of patients respond to Drug A.  A company comes along with a new test, which effectively divides the population, by survival, on Kaplan-Meier curves, into a group with 40% response and 60% response (and p<.0001).   

The issue is, oncologists tell you that they will give drug A to any patient with a 40% or better chance of response.   So while Test A is a precision diagnostic, and has p<.0001, whether the patient is positive or negative on our Test A, he will still get Drug A just the same.  

A payor would say that Test A lacks clinical utility.  Investors upstream may have been impressed enough that the test segregates the Kaplan-Meier curve at p <.0001. 

Story so far: click to enlarge the figure below.

click to enlarge

There are two important points we can add, and pretty easily, to make the picture less grim for Company A.   Here they come.

#1 Context Matters

Let's introduce two drugs.   Drug A has an overall response rate of 50%, and Test A gives us populations with 40% or 60% response.  So far, an oncologist will give every patient Drug A, due to the 40% rule.

But now let's introduce Drug B.   Drug B is for the same patients, has a 50% response rate, and has no test.   In a world with no test for either drug, Drug A and Drug B are a toss-up, with 50% response rate for each.   In a world with Test A in use, some patients have a 60% chance of response with Drug A, so that's now better than Drug B.   And some other patients have only a 40% chance of response with Drug A, so now, for those patients, Drug B becomes the better choice.

So the value of "Test A" depends entirely on the context and the choice between Drug A and Drug B.

#2 Setting a Set Point:  Decision Theory; Vickers Papers

How do we make decisions which balance probabilistic pro's and con's?   For example, if it takes two negative breast or prostate biopsies to find one cancer, we will go ahead with the plan of care (triggered by mammography or PSA, for example).   But what if it takes 10 biopsies to find one cancer?   Or 25?  Or 50?   Or what if an intervening test (say, a multi-kallikrein test) lets us do 4 biopsies to find 1 cancer, but, by letting more men just go home, we catch a few less total cancers.   How do we draw the line? 

There are better ways than hunches, hand-waving, or guessing.

Clearly, it's a form of the number-need-to-treat problem, or here, the number-needed-to-test.  For me, I keep going back each year to a 2006 paper by Vickers and Elkin; Vickers is a statistician at Memorial Sloan-Kettering with a large body of work.   See, "Decision Curve Analysis: A Novel Method for Evaluating Prediction Models," Med Decis Making 26:565, 2006 - here.   The article models the outcomes with Treatment A with Treatment B (which might be no treatment) but can be adjusted for the expected results with and without Test A (meaning, does Test A move the needle enough to be better and different than not using Test A).

For more from Vickers, see also, "Method for evaluating prediction models," Trials 8:14, 2007 - here.  See also the MSKCC website for decision curve analysis resources - here.

MSKCC interactive website

Tuesday, January 4, 2022

New Study Documents Medicare Advantage Denial Rates, Causes of Denials

In the January 2022 issue of Health Affairs, Schwartz et al. study the rate of denials in Medicare Advantage, using Aetna data (most authors from CVS which acquired Aetna in November 2018).  Denial rates were only about 1% and 85% of Medicare Advantage denials were rooted in Medicare fee for service policies.  (Aetna can deny additional claims, when there is no Medicare policy to the contrary and when the service is deemed not beneficial by Aetna).   Here

Of additional interest, Exhibit 2 in Schwartz et al. shows that 80% of denials were due to "experimental" or "no proven efficacy" while 10% were denied due to lack of medical records.  Most of the remaining 10% were denied relative to some primary denial (e.g. if a surgery fee is not necessary, the anesthesia fee is not necessary).   

Exhibit 3 shows that laboratory service denials swamp out all other medical service areas, which are miniscule in comparison.  

Another interesting fact is that when there are Medicare Advantage denials for oncology or drugs or surgery, they are usually caused by Medicare Advantage rules.  (Gold bar longer than the very short green bar).  This is because FFS Medicare has few LCDs (or NCDs) on cancer care, or on other drugs, or surgeries.  

Click to enlarge.
For an article on rough-and-tumble  contracting amongst MA plans, here.

DEX Z-Codes Contracted to More Medicare Advantage Plans; Announcements on Website

Diagnostics providers working in the MolDx regions have to track three MolDx-related websites.   Palmetto GBA, the actual MAC, holds the LCD policies and associated billing articles.   The MolDx website has many required-reading articles, rules, and forms for submission for pricing and coverage.   Meanwhile, a third website (owned by Palmetto) is the DEX Diagnostics Exchange where you can track and apply for Z codes.   

There's a new announcement of note for the Z-code system.  Several months ago, MolDx announced that United Healthcare Medicare Advantage plans would require Z-identifiers (Z-codes) on their Medicare claims.   (Previously, the codes were only required for fee-for-service claims, that is, those claims going directly to a Part B Medicare MAC).  

In a new announcement, dated December 30, 2021, MolDx states that more Medicare Advantage plans are going to require Z-codes and that labs should apply for Z-codes promptly to meet a March 1, 2022 deadline (less than 60 days).   

The article doesn't list which Medicare Advantage payors are involved, but says you may get a notice from some Medicare Advantage plans ("check your email") and that more Medicare Advantage plans may roll onto the system in the future.  

The current webpage lists 20 CPT codes for immediate attention while commenting that "all molecular diagnostic tests will ultimately require Z-code(TM) assignment and technical assessment." 

Here are some links:

  • Palmetto LCDs in the cloud - find links from here.
  • MolDx website - e.g. forms for technical assessments, start here.
  • DEX Diagnostics Exchange here.
  • Finally, the specific new article about Z-codes at "certain" national Medicare Advantage plans here.

Here are the codes on which the MolDx MA plans require immediate (March 2022) Z-coding:

Medicare Advantage = Very Large

It's huge.  In 2021, more than 26M people were enrolled in Medicare Advantage, approach half (42%) of the Medicare population.  Data here.

Medicare Advantage Denial Rates and Rationales - a 2022 Paper

In the January 2022 issue of Health Affairs, Schwartz et al. study the rate of denials in Medicare Advantage, using Aetna data (most authors from CVS which acquired Aetna in November 2018).  Denial rates were only about 1% and 85% of Medicare Advantage denials were rooted in Medicare fee for service policies.  (Aetna can deny additional claims, when there is no Medicare policy to the contrary and when the service is deemed not beneficial by Aetna).   Here.  

Of additional interest, Exhibit 2 in Schwartz et al. shows that 80% of denials were due to "experimental" or "no proven efficacy" while 10% were denied due to lack of medical records.  Most of the remaining 10% were denied relative to some primary denial (e.g. if a surgery fee is not necessary, the anesthesia fee is not necessary).   

Nerd Note.

I believe for a long time MolDx carefully referred to "Z-identifiers" rather than Z-codes.  However, the term "Z-code" was common spoken language.  I notice the new website currently just refers directly to "Z-codes," and uses the TM symbol when it does.  Denial rates were incrementally higher in 2019 than 2014.  

Corporate Structures

At the November 2021 annual CCLA meeting (California Clinical Lab Association), Dr. Bien-Willner, the program director of MolDx, noted that Palmetto has established a separate working entity, called IMPRES, of which he is the Director, for health plan contracting of its informatics solutions.

Monday, January 3, 2022

Very Brief Blog: Some Notes on Devices, Value Based Purchasing; with a Critical Note

In December, I had the chance to give a talk for a major device manufacturer on trends in value based purchasing and managed care.   I noted that while there were some exceptions, in many cases, the impact on devices (and diagnostics) is not that large.  For example, you will hear that a plan has 99% of its hospitals under value-contracts, and only later discover that the average bonus or penalty was, say, 0.5%.  So you can spin that fact set in different ways.  

Two interesting follow ups.

#1 What CEO's Call Out as Biggest Trends Aren't "Value Based Purchasing" Metrics

I heard a podcast from physician executive and (former) Senator Bill Frist, A Second Opinion, on December 6. He interviewed Bruce Broussard, CEO of Human, and Glen Tullman, CEO of Transcarent, which aims to electronically enhance care coordination.  Tullman was CEO of Livongo.   

Asked to name the most impactful trends in healthcare, these leading executives cited major topics like "working to the top of one's license" (e.g. nurse practitioners) and "shift to home-based care" (e.g. so called hospital-at-home programs).   These are a wholly different language that most "value based payment" metrics, such as most CMS metrics (e.g. 0.25% penalty for repeat admissions in the second quintile).

#2 Brand New Article on Value-Based Contracting for Devices (But Includes Defunct MolDx LCDs)

But if you do want to have on file something very recent on performance-based contracting for devices and diagnostics, see a new 2022 article by Chen & Carlson in J Managed Care Spec Pharmacy here.  See also a blog by Jason Shafrin summarizing the Chen/Carlson report here

In interpreting this, some "watch-outs."  

Many of the data tallied are from "Local CED."  Medicare buffs will quickly recognize that most of the arrangements being logged from publicly available sources available to the authors are CED NCDs from CMS, and to a substantial degree, 2015 era "CED" or "CDD" LCDs from Palmetto MolDx.   MolDx has not done any CED LCDs for several years and has deleted or isn't enforcing any of the old ones.   They may have LCDs with remarks like "We will continue to evaluate the evidence for coverage" but that isn't a formal agreement that should be counted as a contract for "value based purchasing."  So be aware of this paper, but note such caveats in interpreting it in any forward-looking way.   For example, authors write that '"A key player in the diagnostics arena (for value based purchasing) has been Palmetto GMS, with its data development program, which is a version of CED."   Another point is that CMS NCDs with CED are disproportionately devices, not drugs, but CMS publishes almost no NCDs on drugs to begin with.  

Acronym to remember - PBRSA, performance-based risk-sharing agreement.  

Lost in the Holidays: FDA Slow-pedaled COVID Variant Tests Before "Now"

Possibly lost over the holidays were several important articles on the FDA's handling of COVID variant assays and Omicron, and how we got to where we are today.

Let's start with the third article, on December 20, in WSJ:  "Omicron Tracking in US is Hindered by Data Gaps."  This includes a lack of variant-specific assays, but also some of the states had wound-down some of the basic reporting resources and staff.   Here.

But in mid-December, Genomeweb/360Dx ran two important articles, one open access and one within the paywall.   On December 15, a staff essay at Genomeweb t alked about the FDA "now considering EUA submissions for COVID variants."   Here.  

But that article is only meaningful, or eye-catching, in the context that previously, FDA hadn't accepted for EUA the same types of variant-confirming assays to have the capabilities in place.  That's where the paywall article becomes important (by Madeleine Johnson at 360Dx here, published on December 17 here).   She had more time to interview companies who were entirely frustrated by prior attempts to get variant-specific assays up and running and certified via EUA.  If you've got a subscription, very worthwhile reading.

The Build-Up to - NYT January 2

So we find this headline in New York Times January 2"With No Way to Identify Omicron and Delta Patients, Doctors Struggle with Treatment Decisions."   Find Christina Jewett's article here.


See also a VOX article, "Supply Chain Not Ready for Omicron," Rebecca Heilweil, December 21, here.

See a transcript of FDA's December 15 town hall, 17pp, here.