PAMA Raw Data Provides Unprecedented Instant View of US Lab Industry - For Free

On September 22, 2017, CMS released PAMA median pricing data that will be used to reset Medicare's national fee schedule for lab tests - both conventional tests and genomics.  (Here).

CMS also provides ALL the raw data in an open access web interface that allows filtering and data pulls.   The data website is here.  

(This is the same data I have reported on and used for physician and lab Medicare Part B claims, e.g. here.  I have some instructions for using the Part B data set, here; the PAMA dataset is nearly the same so the Part B instructions will help understand the PAMA web interface.) 

Between Medicare 2015 Part B claims data on line, and the new PAMA data for 1H2016, anyone can have an unprecedented view of the US lab industry - for free.   

Imputing National Volume Data from CMS Part B Public Data and New PAMA Public Data

For example, we already knew that in CY2015 data from CMS, there were about 19,000 uses of BRCA full sequencing under code 81211 (here).

I made a simple data dump of the new 1H2016 PAMA private payer data for BRCA and stored in the cloud here.  It shows 94,977 uses of 81211 paid by private payers.   (Remember, that's for 1H2016, a half year).  

This suggests that if we add CMS Part B 2015 data (19,000 uses) and we "double" the PAMA 1H2016 data to account for a full year (190,000 uses), there are about 219,000 uses of BRCA sequencing 81211 per year, and Medicare cases are about 10% of the annual total of BRCA sequencing cases.

Wild West of Price Ranges

You also see bizarre stuff.  For example, the table reports 22 payments for BRCA sequencing 81211 at $44,207.   And 27 payments at $30,969.   And 28 payments at $17,612.  But PAMA data also shows dozens of paid claims for 81211 trickling in at the triple digits ($150, $149, $145).

The density distribution of BRCA 81211 price points is non-normal (non-Guassian):

Sole-Source Labs

You don't see this detailed price distribution data for sole-source labs.  For example, if you filter the raw data for 81519, Oncotype DX Breast, you don't get any of the raw data - neither volumes nor prices.  

Nonetheless, in the PAMA zip file of data, CMS does provide summary statistics such as 25th percentile and 75th percentile for all tests, including sole source proprietary tests.  

For Oncotype DX 81519, this file shows a 2017 current Medicare price of $3443, with PAMA new weighted median of $3873, and a 25th/75th percentile range of ($3713, $4153), which is pretty tight.  However, CMS also tells us the minimum reported payment for 81519 was $1 and the maximum was $38,632 (click to enlarge):

Wild World of Clinical Chemistry Price Ranges

The spread and strangeness isn't limited to genetics.  I checked a routine clinical chemistry code, 86003 (blood-based IgE allergy testing) and while the PAMA price will eventually fall to around $4.50 from the current around $7, there were dozens of PAMA reported payments exceeding $500 per test, and even exceeding $1000.  

Sept 22, 2017: CMS ISSUES PROPOSED PAMA RATES FOR 2018 AND PROPOSED NEW CODE RATES FOR 2018

On Friday, September 22, 2017, after market close, CMS issued PAMA data (covering the whole lab fee schedule) and also issued its proposed rates for new CY2018 codes.  The data is voluminous and this opens a public comment period through October 23, 2017.

• The home page for the Clin Lab Fee Schedule new code process is here.
• The PROPOSED PRICES OF NEW CODES is here - a 51 page PDF.
• Note that from page 32 forward, this PDF includes pricing for codes that received no (or "too little") PAMA data.  For example, Genome 81425 is proposed as a crosswalk from 5-50 tumor genes (81445, about $600).
• There will be many strange things in the crosswalk recommendations.  For one example, most stakeholders recommended crosswalking the new Mammaprint code 81521 to the Oncotype DX code 81519, but CMS chooses a crosswalk to Cologuard (about $500) because CMS sees the Cologuard test as "more similar" to Mammaprint than Oncotype is.
• The home page for PAMA lab test pricing is here.
• The PROPOSED NEW PAMA PRICES of the CLFS are in a zip file here.
• I've posted a cloud version of the main Excel price table, here.  
• For example, I've highlighted large drops in red, large increases in green.
• CMS also provides the raw data via an open access, downloadable, and sortable data website, here.
• Read about the incredible insights available in the raw data, here.
• This is the same type of raw data website used for annual Part B provider data (here).
• For example, there were several dozen payments for BRCA sequencing 81211 that exceed $15,000, here.  And dozens of payments for BRCA 81211 that were under $200.
• CMS has a summary 11 page discussion of the PAMA process, here.
• For example, CMS ran sensitivity analyses if more hospitals had reported, etc.  CMS also discusses the total number of labs reporting by type (independent, physician office, etc.)
• ACLA issued a rapid price release of concerns, here.

Early Comments - Genomic Codes

• The price for Cologuard 83528 was essentially unchanged ($512 changing to $508).
• The price of 5-50 tumor genes (81445) was essentially unchanged ($602 changing to $598).
• The price of 50+ tumor genes (81455) was previously unpriced at CMS, but now has a new price of $2919.
• The price of BRCA testing under legacy codes 81211, 81213 went up a little (from $2195 to $2395 for the first, +200, from $586 to $553 for the second, -33).
• However, the price for consolidated BRCA testing in one code (81162) went down from $2503 to $1616.
• The testing of a known BRCA familial variant rose from $93 to $375 (81215 or 81217).
• GSP Codes:
• Some unbelievable prices appear in the Genomic Sequencing Procedures or GSP codes.  
• I've put an informal table of all GSP codes, old price points (if available), and new PAMA prices or newly proposed crosswalk prices in the cloud here or in a web table here.
• 81432 Hereditary Breast Cancel Panel (which includes BRCA1, BRCA2, and a dozen more genes) went down from $932 to $136.   The sister code for Dup Del analysis, 81433, went from $602 to $425.
• If you go to the raw data website, and search for 81432, there is no data.  This may mean that no lab reported more than 10 cases (?).
• Incredibly, the code for Lynch Syndrome 81435, went from $802 to $38 (and its dup del code 81436, from $802 to $574). For 81435, again, the raw-data website has no data although Lynch syndrome panel testing is a very common service.
• Hint:  The GSP panel codes were not very popular and gene by gene stack coding was more commonly used.  
• Some GSPs rose.  
• Noonan Spectrum Disorders 81442 from $602 to $2143.
• Ashkenazi disorders panel 81412 rose from $602 to $2448.
• Mitochondrial gene panel (not previously priced by CMS) will be 81440, $3324. This is an example of many genetic codes never priced by CMS that receive CLFS pricing through PAMA.
• Exome 81415 came out fairly well at $4780.  But oddly, 81415, exome comparator genome, is three times as much at $12,000.  
• Genome 81425 did not have pricing data, according to CMS, so CMS proposed a crosswalk price of about $600 based on crosswalk to code 81445 (tumor, 5-50 genes).   
• Among sole-source tests, Oncotype DX 81519 rises from $3443 to $3873, and the Allomap cardiac transplant test 81595 from $2840 to $3240.  
• The larger respiratory virus panels took a steep hit. 
• 87631, 3-5 targets, $175 to $142.
• 87632, 6-11 targets, $292 to $218 (-25%).
• 87633, 12-25 targets, $571 to $229 (-60%).

Some Utilization Data Can Be Backed Out from "Raw Data" Website

The raw data website is here.  For example, BRCA as 81211 was reported 94,977 times, the most common single price between $1870 which was reported 10,111 times.  The consolidated BRCA code 81162 (which covers performance of both sequencing and dup del in one code) was reported only 815 times (about 1% as often), and while the median price was lower at $1616 the most commonly reported price for 81162 was $2400 with 33 occurrences.

The raw data website is not the numbers of labs, but the number of times a particular price was reported.  For example, a lab might bill at test at $10 and be paid $8, $8.50, and $9.  It would report, and we would see on the raw data website, $8x1, $8.50x1, and $9x1.

MoPath Tier 2 Codes

While Tier 2 codes did not have CLFS prices before, they did have average observed Pt B prices.  PAMA prices are noisy, but on average 6% lower.

Highest Price Molecular Codes (Sorted by High PAMA Price)

See table, click to enlarge:

PLA Code Recommendations

There were over a dozen new PLA codes included in the recommendations, most receiving a crosswalk rather than a gapfill recommendation.  However, some of the recommendations make no sense, at least comparatively.   0004U is a proprietary infectious disease resistance test, assessing 27 genes, with crosswalk recommendations such as 10X to 27X 87150 ($48).  CMS prefers 1x87798 (infectious agent detection, amplified probe, other; also $48, thus 1X$48.)   This is in contrast to the result for 0008U, an H.pylori gene-resistance panel, which CMS offers to crosswalk to 81445 (5-50 tumor genes, about $600).

Impact of New PAMA Prices on Incoming Crosswalks

CMS faces what to do with codes that are currently being crosswalked to codes whose prices may change radically under PAMA.  For example, CMS recommends the new code 81413 (cardiac ion channelopathies) be crosswalked to Lynch syndrome 81435.  However, Lynch syndrome 81435 will be dropping from about $600 to about $38 under current PAMA data.  Where does that leave 81413?  CMS remarks, "Maintain the crosswalk finalized in November 2016" but I'm not sure if that means the November 2016 price of that crosswalk or the new $38 price of the crosswalk. (See page 29 of the 51-page crosswalk/gapfill PDF).

Brief Blog: CMS Breaks Normal MAC Cycle, Awards Juris. J to PALMETTO

CMS normally awards MAC contracts on a five year recompete cycle, and recent legislation let CMS extend that to ten years.   But don't count on it.   In March 2016 (here), CMS announced a MAC contract solicitation for Jurisdiction J, even though the contract had been awarded to Cahaba only 18 months earlier in September 2014 and would normally last til 2019 if not 2024.

Jurisdiction J handles Tennessee, Alabama, and Georgia, representing 7% of US Medicare volume.

On September 8, 2017, CMS announced that the new awardee for Jurisdiction J will be Palmetto GBA, winning a contract worth $275M.

It's on the MAC What's New Page (here), but as late as 9/21, CMS hadn't yet updated the main Jurisdiction J page yet (here).

• See official notice here.

MoldX Perspective & Gapfill

This gives the MolDX program - two Noridian MACs J-E, J-F; WPS MACs J-5, J-8; Palmetto J-M; and Palmetto J-J - enough CLFS states or zones to control the median in the annual Gapfill process, assuming that all MolDX MACs submit the same price suggestions to CMS.

Brief Blog: The National Correct Coding Initiative: Policy Manual: Webinar & Recording on How It Works

CMS maintains a vast public library of edits that govern the (typical) maximum use of CPT codes in units-per-day and that govern what codes can and can't be used together.   In addition there is a multi chapter densely written coding policy manual, the "NCCI Policy Manual for Medicare Services."  This is binding on Medicare, and I understand that the edits were made binding on Medicaid a few years ago.  In addition, the edits and rules may be used by private payers.  Find the NCCI Policy Manual in the links at the bottom of this CMS webpage (here).  The manual is updated annually and published around December.

Today's email brought notice of a webinar by Duane C. Abbey (see here and his company homepage here) on the NCCI Policy Manual.   The Eventbrite registration page is here; scroll down on the page to see a full course description; also copied after the break.  The webinar will be October 12, 2017, and archived on pay-for-video.

With WSJ Op Ed, CMS Seeks Innovative New Future for Center for Innovation

Several weeks ago, the head of the Center for Medicare and Medicaid Innovation - CMMI, or "The Innovation Center" - resigned, shortly followed by hints that CMS was setting up a renovation plan for CMMI itself.

That news is in full bloom now, with a centerpiece Op Ed in the Wall Street Journal by CMS director Seema Verma, and an official federal Request for Information, seeking comment on how CMS can best use the CMMI.

• For the CMMI homepage announcement of the new direction initiative, here.
• For the nine-page RFI, Request for Information, here.
• Comments run 60 days, til November 20.
• For Seema Verma's WSJ Op Ed, here.
• For a trade journal article at Healthcare Dive, here.
• For a trade journal article at Healthcare Informatics, here.
• For a trade journal article at Fierce Healthcare, here.
• For a trade journal article at Healthcare Finance, here.
• For an article previewing the issues (September 12) from Manatt, here.
• For a DePaul Journal of Health Care Law on the use and limits of CMMI authority, here (see PDF p. 14 ff).
• Democratic lawmakers said that CMS has "no vision" for CMMI - here and here.
• For a long article (Sept 23) at PBS, here.

The Verma Op Ed is relatively brief and shifts the CMMI emphasis from new mandated bundled programs (e.g. the comprehensive joint program) to relief from regulations through innovation waivers.  Consumer-based, market-based, state-based approaches will be highlighted.   Medicare Advantage waivers from regulations can be a focus.   Drug value payment programs will be on the table.  In an interesting bullet point in the RFI, "program integrity" CMMI programs might be created.

CMMI is an unusual legal entity.  It can waive essentially any Medicare law for the purpose of demonstration programs so long as the programs are intended to raise quality and not raise costs and don't eliminate existing benefits.   But there's no statement limiting the size and duration of demo programs (can a demo be nationwide for 20 years?)   Also, some such as PHRMA argue the law is written to point the "waiver of law" authority to demo programs, while CMS has interpreted itself as having authority to waive law also in later permanent program implementations, so long as they've met criteria (during the demo phase) on quality and costs.  

Steve Jobs v Henry Ford: Battle of the Business Idols

Prior director Patrick Conway often stated that the CMMI had a unique energy and "entrepreneurial spirit" inside CMS, and in one CMS-prepared video that was on Youtube, he wore a black t-shirt and began by saying, "I'm Steve Jobs and I'm head of the Innovation Center."   In her new WSJ Op Ed, Verma uses a different titan of industry, and notes that lawmakers didn't tell Henry Ford how to invent and assembly line and make better cars.  

___

For some links to articles on CMMI's waiver authority, see here, here, here, here (by Dan Crippen, former head of CBO), and here.

Very Brief Blog: Reimbursement Symposium @ TRICON 2018 in SF

The agenda continues to grow at Molecular Med TRI-CON 2018 - which will be held February 11-16, 2018 at Moscone Center in San Francisco.  Home page here.

I was proud to have a hand in planning a day-and-a-half Reimbursement Symposium on Thursday & Friday, February 15-16.   The agenda is online here.

CMS Posts Agenda for Sept 25 Public Meeting (By Webinar) On Rare PAMA Codes

A few weeks ago, CMS announced it would hold a public meeting by webinar on pricing recommendations for lab tests, represented by CPT codes, for which it received no data or "insufficient data" for fee schedule calculations under PAMA Section 216.

CMS has now posted additional information, including an agenda, for the meeting.

• Home page for the meeting (see under heading Panel Meetings), here.
• Federal Register announcement of meeting, here.
• Agenda for meeting, here.
• REGISTRATION is a link "event address" on the PDF meeting agenda.
• "There is no deadline for attendees to registrater but presenters must register and submit comments by September 21, 5 pm ET."
• For Presenters: PowerPoint Template Instructions, here.
• "Comments will be limited to 1 minute per test code."  Comments are to be submitted by 5 pm ET September 21 to CDLTPanel@cms.hhs.gov
• "Test Codes With No Data" Listing, here.
• CMS accepted public comment til August 18; separate from the webinar under September 25.
• The meeting will stream live at: http://www.cms.gov/live/  on Monday September 25, beginning at 8:45 am ET, 5:45 am PT.

Very Brief Blog: Short Deck on Current Trends at AMA CPT and CMS CLFS (Lab Policy)

On Friday, September 15, I had the chance to present a short deck on current trends in AMA CPT genomic codes and PLA codes at the DXCON2017 held in San Francisco.  

The deck is in the cloud here.   To my surprise, parts of the presentation were summarized by Turna Ray at Genomeweb, here (subscription).  

The presentation briefly lists the publicly-available codes under AMA review last week, as per the AMA's agenda website, but there is NO proprietary information from the confidential AMA CPT meeting itself.  

A Trifecta of Forums on Innovation: Jackson Hole, MDIC, and Health Affairs

There is a trifecta of Innovation Forums between mid-September and late October:

• September 13, 2017: Health Affairs, "Value of Innovations in Medicine"
• This half-day innovation conference was held in Washington and focuses on new horizons in pharmacoeconomics of innovation.
• The Health Affairs conference home page is here.  Several links include full audio, bios, and full speaker slides as a consolidated PDF.  Speakers included innovation economists Lou Garrison PhD and Peter Neumann PhD, and Sam Nussbaum MD, previously a senior medical director in the BCBS system.
• Garrison discusses the ongoing ISPOR Value Framework Initiative,  here.
• 
  
• October 3, 2017: Medical Device Innovation Consortium "Annual Public Forum," also in Washington.
• Speakers include FDA's Scott Gottlieb MD.  For links see here.
• 
  
• On October 25-26, 2017, Jackson Laboratory in Connecticut hosts the "Forum on Healthcare Innovation," focusing on genomic medicine.
• Speakers include Francis Collins MD.   For conference homepage see here.
• It's limited to 200 attendees.  The second day winds up at 1 pm.
• For summaries of the past several Forums, see here.

___

Not specifically on "innovation," but perhaps on how payers and the health system cope with innovation, a conference on Laboratory Benefit Management and related topics in Nashville September 25-26, 2017, here.

An invitation-only event on healthcare system leadership during "disruption, complexity and uncertainty" will be hosted by Modern Healthcare in Phoenix on October 19-20, 2017, here.

Rep. Doggett Asks CMS to Clarify "KYMRIAH Agreement;" Raised on This Blog Sept. 6

On September 13, 2017, Rep. Doggett issued a public letter asking CMS to address reports that it had established a deal with Novartis on special coverage and pricing conditions for the new cell therapy biologic, KYMRIAH.   The press release is here and clipped below the break.

This blog, Discoveries in Health Policy,  reported already September 6, a week earlier, that any close reader would find substantial gaps between the various news stories and press releases on the KYMRIAH agreement.   See the original blog, here.  

After the break, the Congressional letter to CMS, with 9 signatures.  The letter asks CMS to answer 14 questions.  See coverage by Zach Bernnan at RAPS Regulatory News, here.

Very Brief Blog: Gottlieb to Keynote "Medical Device Innovation Consortium," DC, Oct. 3

A few days ago, Scott Gottlieb, head of FDA, provided a 40 minute speech and Q&A session oriented to drug development at the annual RAPS converence.   For summary and links to Youtube, see Endpoints (here).   (For text of his full speech, here.)

Gottlieb noted he would be speaking on the FDA's pathway to improving device regulation soon.   See him at the October 3, 2017, Medical Device Innovation Consortum (MDIC) forum in Washington, DC.   The organization is quite active (homepage here) and the full agenda and registration details are online here.  Jeff Shuren, head of CDRH, will also present at the conference.

Brief Blog: AMP & Several Societies Comment on MolDX Infectious Panel LCDs

In May, MolDX released draft policies on the Noridian website that provided very limited coverage for broad infectious agent molecular profiles in respiratory and GI disorders.

In an unusual turn of events, the LCDs drew comment from a coalition of 7 organizations, including AMP, CAP, American Gastroenterological Association, Infectious Disease Society of America, and others.   The comment letter on the GI panel LCD (DL37368) is here.   The comment letter on the respiratory viral panel LCD (DL37301) is here.  

In both cases, the organizations argue that the draft LCD coverage was too narrow.   All four relevant documents (the 2 draft LCDs and 2 comment letters) are together in one cloud zip file, here.

USPSTF Releases New Draft Cervical Screening Recommendations; Comment til October 9

On September 12, 2017, USPSTF released new draft recommendations for cervical cancer screening tests.   In the draft, "co-testing" (joint PAP and HPV virus testing) has been removed as a recommended strategy.   Stakeholders can comment until October 9.   See the USPSTF webpage here.  See coverage at Medscape here and at Genomeweb here.  NPR here and MedpageToday here.

USPSTF recommendations can be quirky regarding lab testing.   The colon cancer screening recommendations (2016) basically recommend a wide range of methods with the emphasis that patients get one of them - get some form of colon cancer screening.  The BRCA preventive testing recommendation is light on specifics of the genetic testing method (2013) -- whole sequencing, founder mutations, use of dup-del analysis (and of what form) -- these are left to the discretion of the reader, as long as patients get some form of BRCA testing.

In a "net benefits" section, USPSTF acknowledged that cervical preps, HPV, and co-testing with both cervical cytology and HPV were all effective strategies.  USPSTF asserts that "modeling suggests that both HPV testing alone and cotesting offer similar benefit over cytology..."   This will likely draw substantial comment from the lab community.

Medicare covers cervical cancer testing through a separate, statute and NCD based process.  It has covered cotesting since 2015 (CMS press here, NCD here, coding here).  It is covered only to age 65, mapping to the older USPSTF recommendation.  Medicare law covers Pap smears at 12 to 24 months, based on risk factors.  The addition of HPV benefits, by NCD, did not change the coverage of Pap benefits, in statute, but was layered on top of them rather than revising them.

A few interesting comments from the USPSTF draft discussion include these:

     Unlike cytology, samples for HPV testing have the potential to be collected by the patient and mailed to health programs for analysis, meaning self-collection may be one strategy for increasing screening rates among populations where they are currently low. [But] Rigorous comparative studies are needed to verify this hypothesis and to identify effective strategies for implementation.
     Another important area for future research is the effect of HPV vaccination, as an increasing number of women and men of screening age are being vaccinated. Decreases in HPV type prevalence due to vaccination could reduce the positive predictive value of HPV testing....

A copy of the September 2017 draft report is archived in the cloud (as PDF and as Word).

The OIG's Elaborate Reports on PAMA Implementation and on Current Lab Payments

PAMA requires not only that CMS implement a new system for payment of laboratory tests, but that the OIG provide annual reports on what CMS is doing.

Since the OIG has been issuing these reports in September, they may come out about now.   It's interesting to review how much material went into the September 2016 reports last fall.

• The 17-page OIG report on how CMS is implementing PAMA - focusing on the June 2016 final rule - is here.
• See also a relatively dry GAO report on the final rule; 5 pp; here.
• CMS also issued an "HHS OIG DATA BRIEF," 15 pp, ton "2015 Year 2 Baseline Data," here.

I don't believe I'd seen the last-cited report until now.  HHS OIG produced some very interesting data cuts.  A quick sampling: 

• Part B labs were $7B in 2015.   The top 25 tests were $4.1B.  Medicare paid substantially less in 2015 than in 2014 for genetic tests (primarily due to new controls on CYP testing).
• Part B lab payments are highly concentrated.  1 % of labs (292/29,101 labs) received 54% of payments and 5% of labs received about 80% of payments.   95% of labs, then, got 20% of payments.
• Payments for one traditional clinical chemistry test, 84443, TSH testing at $23 per test, garnered $475M - more than CMS paid for the range of molecular testing.

CMS Convenes Meeting on Sept 25: How to Handle Low Volume Codes under PAMA

CMS has announced a new meeting of the laboratory panel advisory group created by PAMA.   The meeting will occur by webinar/teleconference on Monday September 25, and the topic will be how CMS will handle low-volume or no-volume codes under PAMA Section 216.

• The CMS announcement is here.  (82 FR 43239, 9/14/2017).
• For further updates between now and the meeting, HERE (Sept 20).

Background

PAMA section 216 re-calibrates the Clinical Laboratory Fee Schedule (CLFS) by applying new prices that are the medians of market prices determined by a survey of private payer payments (data must be turned over by labs.)   In rulemaking last summer, CMS determined that codes with no data would go into a crosswalk-gapfill process.  However, CMS tells us that it is now confronted with some 60 CPT codes with either no data, or "too little data" to establish a price.  (Sic.)  In the July 31/August 1 summer lab policy meetings, CMS proposed it may just delete such codes from the CLFS.  Stakeholders responded that CMS had no such authority: There was no legal definition of "too little data" and CMS had already stated by rulemaking that unpriced codes would be handled by crosswalk/gapfill.  (CMS admits it already has a regulation to follow: at 42 CFR 414.508(b)(1-2).)  (E.g. see letter from AMP to CMS, here.)

CMS states that detailed agenda will be posted about a week ahead of the September 25 workshop.  Presentations must be submitted to CMS by September 21 at 5 pm ET.