Wednesday, March 21, 2018

A Flow Chart for Medicare's Final NCD for NGS Testing in Cancer

Here's my best version of a flow chart for Medicare's March 16, 2018, Final NCD for NGS Testing in Advanced Cancer. 

Click to Enlarge
Note that patients with non-advanced cancer have:

  • no NGS testing (neither NCD nor LCD) or 
  • alternatively can get testing for non-targeted-therapy tests (e.g. minimal residual disease tests), 
  • depending on a sentence on page 4 about the scope of the NCD.

In this sentence, CMS writes that the NCD applies only to NGS tests to choose targeted therapies or assign patients to targeted therapy trials.   

The LCD pathway is not specific for indication, though it is specific for advanced cancer and 1 use of a test.

The green boxes show the route to guaranteed NCD coverage:  NGS technology & patient has advanced cancer & test is FDA companion diagnostic & patient's cancer is on-label for test & patient has not had this test for this cancer before.

For my long article on implications of the NCD, see here.

Very Brief Blog: New Book on Personalized Medicine: Kristin Poithier of EY

Kristin Pothier, who was a partner at consultancy Health Advances and now is Global Head of Life Sciences Strategy at EY, has published a new book on precision medicine.  Titled "Personalizing Precision Medicine: Global Voyage from Vision to Reality," it was released by Wiley in October. Amazon webpage here.

The publisher notes, Pothier "reviews the full continuum of personalizing precision medicine, including diagnostics, therapeutics, big data, supportive care, regulation, and reimbursement and innovation in precision medicine worldwide."

Other recent titles have been, "Genomics and Personalized Medicine: What Everyone Needs to Know" (Michael Snyder, Oxford, 2016, Amazon) and "The Personalized Medicine Revolution" (Pieter Cullis, Greystone, 2015, Amazon) and "Genomic and Precision Medicine, 3rd Edition" (Ginsburg & Willard, Academic Press, 2016, Amazon) and "Precision Medicine: Guide to Genomics in Clinical Practice" (McCarthy & Mendelsohn, McGraw-Hill, 2017, Amazon.)

Also of interest, recent books that look at digital health, data, and precision medicine together.  These include "Moneyball Medicine," by Glorikian & Branca (2017), "Fourth Wave" by Paul Sonnier (2017), and "Realizing the Promise of Precision Medicine: Patient Data, Mobile Technology, Consumer Engagement," Cerrato & Halamka (2017). 

Monday, March 19, 2018

Very Brief Blog: New York Times Runs Long Article on FDA-approved Digital Therapeutic Apps

It's likely a firewall article, but NYT runs a detailed article on the growth of the field of FDA-approved digital therapeutics. 

For example, one featured app is the ReSET app, prescription-only, which was authorized by the FDA last fall as the first app for improving outcomes in addiction treatment programs when used in conjunction with or added to outpatient standard of care. 

The article discusses pro's, con's, and policy issues from a range of perspectives.

click to enlarge

Friday, March 16, 2018


Note:  This article has been revised several times on a rolling basis as the implications of the NCD have become more clear.

CMS released the final NCD for NGS testing in cancer.
Online at CMS here.
Also a PDF cloud copy here.

CMS also issued a press release here.

Coverage at Genomeweb here. Genomeweb follow up here.  MedCityNews here.  Forbes here. Reuters here.  Wired here.  Medscape here.  Targeted Oncology here.  Regulatory Focus/RAPS, here.

My best current effort at a comprehensive logic flow chart for the NCD is here.

The NCD provides a great measure of forward-looking certainty for investors and developers, because "Tests that gain FDA approval or clearance as an in vitro companion diagnostic will automatically receive full coverage under this final NCD, provided other coverage criteria are also met." [from press release]

Highlights as discussed further below:

  • Difference #1:  All FDA CDx at Parity.  Approved and Cleared FDA CDx are treated at parity.  (But there are almost no "cleared" CDx.)
  • Difference #2:  MSK IMPACT loses its CED based coverage.  The Draft had clear coverage (though with CED) for tests like 510(k) MSKCC IMPACT.  No such coverage for MSK IMPACT in the final.
  • Difference #3:  FDA CDx tests + disease type.  CMS looks to tests BOTH being cleared/approved as IVD, AND as companion diagnostic, AND with an indication in each patient's cancer (e.g. "lung cancer.")
  • Difference #4:  LBx LDTs better off.  There was essentially no coverage for advanced LDT liquid biopsy panel tests as they awaited FDA approval; now they can be covered by LCDs.
  • Difference #5:  Nix Huge National CED Program. The Draft proposed a massive national CED program; there's no CED at all in the final.
  • Difference #6:  LCD Coverage Not Killed.  There was no LCD coverage under the Draft, it was voided.  Now, LCDs can cover NGS tests with some stipulations.
  • Side Issue #1:  Safe Harbor for Germline Risk Tests.  Germline tests with NGS (such as Lynch panel or BRCA-related panel) seem exempt from the NCD due to a sentence on page 4.
  • Side Issue #2:  Some "Excess coverage" scenarios.  NCD could lead to "excessive coverage" in some possible scenarios.
  • Side Issue #3: Paradoxically discourage migration to NGS?  Since the NCD controls NGS methodology so closely, it could discourage migration of some tests to NGS platforms, since they'd require revisions to the NCD even if PMA approved but outside the NCD rules.  Labs can do Sanger and PCR to their heart's content since the NCD doesn't touch them.
  • Side Issue #4:  Oncologist must order.  CMS clarifies that while Medicare allows pathologists to order some tests themsleves ("a stain needed to complete a case"), only treating physicians can order NGS tests.
  • Side Issue #5:  What about FDA and 510(k) CDx?  FDA has cracked the door open for 510(k) "companion diagnostics" with a 12/2017 BCR ABL test; can this be a wider door for developers?
  • Medicare Nerd Points include that: (A) there's no clue how MACs will handle the potential opening up of off label gene results and off label drug options with tens of thousands of imminent, real-world patients.  (B) LDTs might dodge the "one test per patient" rule by having a 300-gene test, a 305-gene test, a 310-gene test.   (C) CMS covers a 400-gene panel, based on its CDx indications, even if only one gene was CDx-relevant to a patient's cancer, and that gene is already known to be positive or negative.  

Differences from the draft include:
  • (Difference One)  Approved and Cleared (meaning PMA and 510k) tests treated at parity - but only for patients that have a "companion diagnostic" indication.  And so far, FDA has almost never granted the "companion diagnostic" status to a 510(k) test.
    • Is this sharp difference between 99% accurate tests a good policy idea?
    • Both PMA and 510(k) classes of tests might be, for example, 99% accurate (Kim et al 2018; or Shin eta la. 2017; or Strom et al. 2015), run on essentially similar platforms and chemistry, and thus produce nearly identical reports on the same tumor.  Diagnostic lab tests measure things, which is different than a therapeutic device or drug.  They don't measure or cause outcomes; they measure things.
      • PMA tests are always validated on "clinical data."   FDA allows either (1) de novo clinical studies, or (2) briding studies aka concordance studies in paraffin blocks on a lab bench to an existing test.  Most of the FMI genes were PMA approved via concordance [bridging] studies in about 200 paraffin blocks (here)...e.g. these are benchtop analytical accuracy studies.  Accuracy studies are equally available to 510(k) tests.
      • 510(k) tests require at a minimum "paper dossiers" collating clinical trial data, guidelines, and I suppose FDA labeling in order to list gene test results as clinically validated.   (This is tier 2 of the FDA's "food pyramid" of precision medicine test results).   However, at least one 510(k) test for BCR-ABL includes some clinical studies in its paperwork, meriting classification as a companion diagnostic.  
      • For a short deck on the FDA's PMA and 510(k) CDx approaches, see here.
      • FDA's approach to giving out test indications is evolving.  
      • FDA's historic approvals of single-gene tests (like cobas BRAF) were for one drug based on one clinical trial of one gene.  
      • But when the FMI test was validated against one BRAF diagnostic that was validated for one drug, to my eye FMI gets on label indications for all BRAF drugs.  See here.  
      • This indicates FDA is shifting to test accuracy, not one-by-one pairings of genes with different drugs, for indications.  
      • FDA's own paperwork reviewing the FMI test (58pp) and the MSK test (57pp) show extremely high NGS read accuracy for both tests.  I'm a board certified pathologist; if both tests are 99%+ accurate at reading sequences from paraffin blocks, then their reports are the same, and what's left to debate?
        • The FDA required studies showing that the FMI test is >90% concordant with prior PMA single gene tests.  See online.
        • The FDA required studies showing that the MSK test is extremely reliable and accurate for sequencing, and its reported genes are clinically valid based on literature (including FDA labeling).   See online.
      • Nutshell:  Private payer policies and MAC LCDs may not see as much difference as CMS does between accurately-measured gene reports and accurately-measured gene reports labeled as CDx. 
  • But wait! There's more.
  • (Difference Two)   The draft had CED-based NCD coverage for MSK IMPACT.  The final has no automatic coverage for MSK IMPACT (since it's not released as a CDx so-labeled by FDA).   
    • FDA allows 510(k) gene panel tests based on accuracy + clinical literature.  That's the road IMPACT took.   However, and experts tell me this is new, FDA has also begun clearly 510(k) tests if they have high accuracy + some clinical study data.  See the December 2017 approval of the MolecularMD BCR-ABL test, which is a 510(k) test supplemented with a few pages of clinical data. It's K173492.
    • FLAG.  Don't try to interpret the NCD without referring back and forth to the FDA Companion Diagnostics Page.   
    • See Medicare Nerd Question 1, below.
  • (Difference Three) For NGS, companion diagnostic tests, CMS looks to the test being cleared or approved as a companion diagnostic, "AND," the patient for whom the test is ordered must have an on-label indication (e.g. "lung cancer.)   
      • This means the NCD covers the Thermo Fisher Oncomine test for lung cancer; the FMI F1 test for lung cancer, colon cancer, and a few others.  
      • However, my reading is that CMS only looks to the test labeling ("lung cancer.")  So such a test is usable in all advanced lung cancer patients, even if a particular on label drug has narrower labeling (like only "second line lung cancer patients that have failed cisplatin.")   
  • (Difference Four) Liquid Biopsy Tests.
    • The draft had no coverage for LDT gene panel LBx tests.
    • In the final, prior to FDA approval,  NGS LBx panels can be covered under MAC review.
    • As they become available, FDA authorized "CDx" NGS panel liquid biopsy tests will be covered under the same conditions as other NGS tests.   
    • CMS states later in the NCD discussion that it doesn't distinguish NGS tests by sample type. 
    • Note that FDA defines the recently created NYS/510(k) accelerated pathway as being for tissue tests, not LBx tests.
  • (Difference Five) There's no "Coverage with Evidence Development" / CED. Period.  
    • Pretty massive CED had been in the draft.
  • (Difference Six) LDT NGS tests can get MAC LCD coverage.  
    • Local MACs aren't obligated to cover them, however.
    • This LCD escape clause isn't a free ride.  
    • (A) NGS LDTs that are in the 28 MolDX states get extremely close technical review which can take hundreds of pages and months of time.
    • (B) Other MACs have been pretty frugal about covering gene panel tests at the LCD level.
    • When a test like FMI CDx is used "off-label," for example in kidney cancer, it can be covered by this local LCD option.
    • If I were MSK IMPACT, I'd quickly publish a study that I matched with FMI F1 99% of the time, if I could, and bring that to MACs.
    • There's one restriction, the NGS test must be used in a patient with advanced cancer, even under the LCD pathway.
A few interesting side issues include:
  • (Side Issue One) Germline NGS tests are "OK" - when you read the fine print!
    • The full NCD needs to be read, not just the coverage section.
    • First, be aware that today, all states cover LCD based NGS testing for germline cancer risk in patients with personal history of breast cancer and personal history of colon cancer.  
    • But, the opening section of the NCD warns that it allows NGS testing by NCD or LCD "only" for patients with is advanced cancer.
    • However:  In the body of the NCD we read:
    • "We do note this decision is not applicable to all diagnostic laboratory tests using NGS, but rather to a unique diagnostic laboratory test that uses NGS for patients with cancer to manage the patient’s cancer by identifying either targeted therapies with known efficacy or in some cases, eligibility for a cancer clinical trial."   
    • Since BRCA panels and Lynch panels aren't for "targeted therapies" they seem to be exempt from review under the NCD.  Assuming the sentence I've just quoted is operative and interpreted the same way by CMS and MACs. 
    • Bad drafting!  I would have put this clause in the opening sentences and not buried in the 60 page text. The sentence appears on page 4 of my PDF version.
click to enlarge (p4 of 60p NCD)

  • (Side Issue Two)  Could the NCD lead to "Excess Coverage?" 
    • Serial testing by different tests?  The NCD seems to cover multiple serial, different FDA reviewed tests, without much restraint, as long as the same one isn't used twice.
    • This is easier for LDTs, which could make a 350 gene version, a 351-gene version, a 352-gene version.
    • CDx Tests Covered Even If CDx Genes are "known positive" or "known negative."  For example, the multi-thousand dollar FMI F1 CDx test is covered in melanoma, even though it only has one approved gene in melanoma (BRAF).  Even if a patient's cancer is already known to be BRAF positive or negative, CMS seems to cover the FMI test.  This undercut the high importance given by CMS to pivotal on label CDx results as a justification for testing.
    • No "value based purchasing" - everything is equally covered..  For example, if Test A has three genes in lung cancer, each at 10% frequency, and a Test B has one gene in lung cancer, at 1/1000 frequency, both are covered.  It's hardly "value based purchasing..."
    • No limits on block age.   From time to time, a patient relapses after 5-10 years.  The NCD has no restrictions on age of blocks.  CMS probably assumes clinicians will use common sense.
    • Duplicate testing.  Medicare's Correct Coding pathology manual has the commonsense policy that CMS won't pay for testing the same analyte twice.  So if you run the FMI panel, you probably shouldn't later run individual ALK, EGFR, etc., tests.  However, if you run the single gene tests first, the NCD does protect payment for the FMI test, as far as I read it.  (I'm not saying I'd actually try this.)
    • The MSI elephant in the room.   Keytruda is approved for all advanced cancers, so an NGS test with MSI at the "FDA Compansion Diagnostic" indication level  would be covered for all advanced cancers.    
      • However, the test would have to be "approved or cleared as a companion diagnostic for MSI."  
      • The Medicare-covered population would probably be "all advanced cancers" if the MSI test is so approved, because Medicare doesn't plan to read through to the actual more restrictive Keytruda drug labeling (advanced cancers that have failed lines of therapy and have no options).  
  • (Side Issue Three)  Discourage migration to NGS platforms for non advanced cancers?
    • The NCD certainly encourages migration of tests onto FDA/NGS platforms if they are tests for therapies in advanced cancers.  If you move your Sanger or PCR test for advanced cancer to an NGS platform (and it's an FDA companion Dx) it's auto-covered by the NCD.
    • But, the final could discourage migration of diverse tests to NGS platforms for indications for non advanced cancers, since they can't be covered, since cancer is non advanced and it's a test that employs or deploys NGS.   
    • For example, if the Oncotype test for non metastatic breast cancer migrated from PCR to NGS, it would become non-covered, which is weird.  It would fail twice under the NCD: it would be for non advanced cancer, and, it would fail to be a companion diagnostic.
    • Mitigation 1:  This may be muted by the text in the body that says it applies the NCD only to tests intended "to identify targeted therapies."
    • Mitigation 2:  I suspect as soon as someone actually had in hand a real FDA approved NGS test for non advanced cancer, CMS would revise the NCD.
    • Mitigation 3:  The LCD section is not restricted to any particular indication for NGS testing.   But it is restricted to advanced cancers X 1 use per test.
  • (Side Issue Four)  Tests must be ordered by treating physician and that is not a pathologist.  
    • See Q&A discussion inside NCD.  Normally tests must be ordered by "treating physician."  There's a longstanding CMS exemption for a pathologist to order a test in order to complete a report.   CMS says don't use the exemption here.   Ordering a $4000 test to complete a tumor report seemed like a stretch; CMS confirms it's a no-go.
  • (Side Issue Five)  Creates a very high incentive to make 510(k) type "Companion Diagnostics."   Even an FDA expert I talked to thought that the "companion diagnostic" label was available only to PMA tests.  PMA devices involve high regulatory costs, fees, annual reports, etc.   With the coverage guarantee from CMS applying to either 510(k) or PMA CDx, developers will be looking closely at how the MolecularMD test got CDx indication on a 510(k) platform in December.   
    • This is another flag to how fast the FDA is changing the options.  
    • In June 2017, the Thermo Fisher Oncomine test was approved for 3 CDx genes, and only allowed to report 20 additional genes most closely tied to lung cancer.  
    • In November 2017, FMI is allowed to report a larger handful of CDx benes, but throw in 350 extra genes of highly variable clinical utility.   
    • Then in December 2017, a BCR-ABL test gets CDx status on the less costly, less regulated 510(k) policy platform.
The NCD is 62,000 words long and prints, for me, at 60 pages.

Here's my graphic of current FDA approaches to CDx labeling.  Full deck here.

click to enlarge

Medicare Nerd Points

Medicare Nerd Question 1.
Are 510(k) tests really not covered at all?

This one is a doozy.

"Tests that gain FDA approval or clearance as an in vitro companion diagnostic will automatically receive full coverage under this final NCD, provided other coverage criteria are also met."

Wait for the rest of CMS's requirements.  The test must be cleared as a companion diagnostic AND have an indication for THAT patient's cancer (e.g. lung cancer).

PMA approved tests are approved "as a companion diagnostic" but 510(k) tests are very rarely "cleared as an in vitro companion diagnostic."  See the FDA's list of "companion diagnostic" tests here.  It lists drugs (NDA/BLA) and then tests (PMA) although the page title says "cleared or approved as CDx" so it is possible for a 510(k) to be a CDx.  One isolated example being MolecularMD BCR-ABL K173492 - the test is a Class II 510(k) clearance but the validation included two explicit clinical studies, which is why it ranks on the FDA CDx webpage.

The labeling for FMI CDx F1 clearly states it is approved as a companion diagnostic for a limited table of genes and drugs (this table doesn't currently include F1's MSI or TMB signatures and certanly doesn't include all the hundreds of genes).

The FDA CDx home page indicates that the pathway may be PMA, 510(k), or Humanitarian Device, but virtually all of the CDx's are PMA.

CMS will depend on the FDA CDx table.   This rolls up older PMA CDx whether or not FDA in older times used the term "CDx" as prominently or consistently in labeling.  PMA CDx are important to list, since you can get a new PMA test by matching the performance of an existing PMA test. 

Another FDA source of information is their "food pyramid" and attending text about CDx claims that FDA published in NOvember.  To be a CDx, you must have Analytical validity + direct correlation with clinical trial OR concordance in paraffin blocks to a prior CDx test

510(k) tests can now be released that report gene panels for cancers, where to  clinically significant mutations, you can have high analytical accuracy, no clinical studies, but compile the relevant clinical literature.   See here

Let me use an example.  So one test, you measure ALK fusion 99% accurately and also show it matches at least 90% of the time to a prior PMA ALK test which correlated with clinical results of Xalkori.   In this box, you'll find the FMI F1 CDx PMA test.  The next test, you measure ALK fusion 99% accurately and know that correlates with clinical results of Xalkori based on this PMA labeling and an NEJM article.  In this box, you'll find the MSKCC IMPACT test. 

Medicare Nerd Point 1.  
Advanced Cancer versus the Diversity of Cancer

NGS tests[for therapeutics] can be covered in advanced cancer, but never covered in non advanced cancers.
  • Is glioblastoma an "advanced cancer?" by CMS's specific definition?   It's not usually recurrent (it doesn't go away) and it's not metastatic and not usually referred to as Stage III or IV (which varies by cancer but for most solid cancers is based on anatomy and distant metasasis.)  
  • Is leukemia an "advanced cancer?"  It's not always "recurrent" and isn't commonly called "metastatic" (leukemia cells aren't found in places foreign to white blood cells, and who hears, see the patient in room 209 with metastatic leukemia?)   There are "staging" systems which really look like "cell classification" systems in which CMS can't find a way to describe any advanced stages and terms like "III" and "IV" aren't used - here.

Medicare Nerd  Point 2. 
On label versus Compendium cancers.

Based on a long history of policymaking, CMS generally covers FDA-labeled and Compendium-endorsed drugs at parity.   However, the NCD is specific to FDA labeling for the test and its drugs. The NCD has no entry point for compendium endorsed drugs, except for the LCD clause at the bottom of the coverage section.

Medicare Nerd Point 3.
Time Needed for Real-World Implementation of the NCD.

NCD's are legally binding on the day they are issued.  However, MACs usually only implement them per CMS coding and implementation instructions that may appear months, even a year, later.   With an NCD of this immediate impact on hundreds of thousands of patients, let's see what happens.

Medicare Nerd Point 4.
How Will CMS Handle "Medicare Advantage" Financials?

Medicare Advantage Plans must cover what is covered by CMS.   However, there is a concept where some large NCDs or other abrupt coverage expansions are not the financial obligation of MA plans for the first year or two.   It remains to be seen if CMS rules this NCD is an immediate coverage and cost expansion for MA plans, or, if it will use the option to run NCD-based claims through regular Part B for the first year or two for MA plan patients.

Another aspect of the NCD is that Medicare Advantage plans seem obligated to cover all PMA approved gene panel tests even if they would rather contract and discount with a few preferred venders or based on the MA plan's assessment of test quality and usefulness.  Again, the NCD doesn't include "value based purchasing."


Medicare Nerd Questions remind me of another project I am working on this year.

In sepsis policy, CMS has a 2015 metric called SEP-1 which requires several steps to be executed within 3-6 hours of diagnosing sepsis.  The key bullets are very brief.  However, CMS has released a 150 page rulebook for implementing this metric, and many implementation issues are still contentious.  (How do you define the minute when sepsis is diagnosed?  If antibiotics must be administered, which drugs count?  All these issues lead to pages of discussion and terrorizes providers.)   Similarly, the coverage section of the NGS NCD is short, but implementation across a wide range of cancers, drugs, labeling variations, and constantly updated FDA tests and indications will require a rulebook.   (Similarly, the CED proposal in the November proposed NGS NCD was short to write and read, but would have been very complex to implement, and as originally written led to some nonsensical implications.)


CMS NCD Final Coverage Text:

A.  Coverage

The Centers for Medicare & Medicaid Services (CMS) has determined that Next Generation Sequencing (NGS) as a diagnostic laboratory test is reasonable and necessary and covered nationally, when performed in a CLIA-certified laboratory, when ordered by a treating physician and when all of the following requirements are met:

Patient has:
  • either recurrent, relapsed, refractory, metastatic, or advanced stages III or IV cancer; and
  • either not been previously tested using the same NGS test for the same primary diagnosis of cancer or repeat testing using the same NGS test only when a new primary cancer diagnosis is made by the treating physician; and
  • decided to seek further cancer treatment (e.g., therapeutic chemotherapy).

The diagnostic laboratory test using NGS must have:
  • FDA approval or clearance as a companion in vitro diagnostic; and
  • an FDA approved or cleared indication for use in that patient’s cancer; and
  • results provided to the treating physician for management of the patient using a report template to specify treatment options.

B.  Other

Medicare Administrative Contractors (MACs) may determine coverage of other Next Generation Sequencing (NGS) as a diagnostic laboratory test for patients with cancer only when the test is performed in a CLIA-certified laboratory, ordered by a treating physician and the patient has:
  • either recurrent, relapsed, refractory, metastatic, or advanced stages III or IV cancer; and
  • either not been previously tested using the same NGS test for the same primary diagnosis of cancer or repeat testing using the same NGS test only when a new primary cancer diagnosis is made by the treating physician; and
  • decided to seek further cancer treatment (e.g., therapeutic chemotherapy).



Endnote One.
Volumes of Data on Test Results Will Have No Tracking

While this effort is closed for now, the testing will generate volumes of genomic data on Medicare patients and will lead to large amounts of drug administration whose outcomes aren't well enough tracked.   See a current March 2018 article in JAMA by Feero, tied to a March 16 National Academies publication on learning healthcare systems in genomics. 

I've argued that if you had test, cancer, test results, and Part B and D drug records, it would be enormously important, directionally correct real world evidence.  The only part CMS is missing is the tests.  Such data would start to enormously improve the work of tumors boards and provide return for CMS's now-finalized billion dollar investment in tumor gene panels; see Patel et al. 2018 and see Perera-Bel et al. 2018.  While groups like TAPUR move in this direction, and Syapse facilities sharing among users, and the FMI-Roche-Flatiron provides a giant-size proprietary footprint in this region, CMS/HHS should be doing something, because important issues like racial health disparities in genomic data are involved (see here, and see also the NAS report).

Endnote Two.
How Will MACs Handle New Opportunities for Off Label Drugs?

Some have argued that the broad sequencing will release a lot of data to clinicians of Medicare patients regardless of whether local MACs or Medicare Advantage will cover off-label drugs, the net risk-benefit of off-label drugs, etc.   CMS sidestepped a Q&A question on this issue by treating it as primarily one of speculative emotional stress rather than speculative medical risk/benefit.  For a paper on potential emotional stress, see JAMA Oncol 2017 here

Endnote Three:  
Why Use a $100 Test If Medicare Covers a $4000 Test?

Regarding the possibility that patients will get a $4000 NGS MSI test (on a panel) when they only "need" a regular $100 MSI test, CMS stated that cost considerations were out of scope of their review.

Thursday, March 15, 2018

THERANOS: SEC Action; See CMS Theranos Payments Here.

On March 14, 2018, the SEC issued a press release with the title: "Theranos, CEO Holms, and Former President Balwani Charged with Massive Fraud."    The 24-page SEC PDF is online at SEC here.  Coverage today, including open access coverage, is widespread.  See e.g. WSJ, Bloomberg, Forbes.  NYT article, NYT OpEd.  Political view at Vox.

The decline of Theranos is usually traced to an October 2015 expose' by WSJ's John Carreyou (for the story on the story, here).  And in April 2016, David Boies was still telling NYT that he and the board have complete faith in the CEO.  But by April or May 2016, Medicare data would have been published showing they had only $15,000 in Medicare billings in 2014, although they confirmed to investors that in 2014 they had $100M in revenue.   See below.


I kept an online running inventory of web articles about Theranos from December 2014 to December 2016, totaling about 500 links.   Here.

The case has two aspects: (1) overstatements of the success of the Edison point-of-care platform, and (2) overstatements about actual revenue.   This second story is much newer and is my focus here.

Using SEC filings, WSJ shows charts of $600M investor cash raised by 2014.  WSJ asserts that Theranos stated revenue of $108M in 2014 versus $100,000 actual:

SEC filing 3/14/2018

Discrepancies between lab revenue claimed versus actual would have materialized annually from Medicare public access records.  I've put Theranos Medicare payments in the cloud for CY2014 and CY2015, but these are just pulls from the open access CMS dataset.
  • From this data, for Theranos billing under NPI 158-854-6401, CY2014 payments from Medicare Part B were $15,311.  
    • Blood draw was billed for 574 unique Medicare patients.   
    • Theranos billed the US Medicare program for less than 50 cases of most lab tests it billed.  (Generally, it charged CMS the CMS fee schedule amount).
  • CY2015 payments, from the same data for same NPI, were $128,804.
    • Very few beneficiaries had more than 1 lab test per type of test.  E.g. "1" of test X and "1"  of test Y per year.
Since Medicare revenue is usually 1/4 or 1/3 or more of lab revenue for tests (here), it would be hard to extrapolate from these public numbers ($15K or $100K) to income of $100M  If what Theranos was asserting to investors for clinical revenue was far different than actual, the gap would have declared itself at regular annual intervals in public CMS data.   The train wreck would be fast and there would be nowhere to hide.

If Theranos stated to investors in early 2015 its 2014 lab revenue was $100M, what did they expect the reaction to be in May 2016 when data was public that its Medicare 2014 lab revenue was $15,000?

This financial issue would have come out and been the same story, even if the Edison lab machine had worked perfectly.  Even if John Carreyou had never heard of them.  It's remarkable.  It's not just a "misleading story" like convincing yourself the Edison is better that it is, or holding a delusional belief it is getting better faster than it is.  The financial statements can't be classed as wishful or misguided; they were like jumping off a building without a parachute. 

CY2015 Part B to Theranos.  Click to enlarge.


BuzzFeed has an interesting approach, mining public "Glassdoor Reviews" comments by employees about life at Theranos, here.   For Buzzfeed's take on 7 biggest lies, here.

SEC case; a key financials page: click to enlarge.

SEC financials.  Click to enlarge.

Regarding tests per patient.  For 85025, CBC, Theranos did about 1.05 tests per patient.  Quest did 1.6, with some Quest centers doing >2 per patient (same database; data not shown).
On a personal note, as an MBA working with larger and smaller startups, I'm still amazed they could raise >$500M while the CEO owned half of the company but controlled 99% of the voting stock, and the board members were 85 year olds who knew nothing about healthcare or technology, rather than voting investors.  It's an overused word, but it is - amazing.

Wednesday, March 14, 2018

Very Brief Blog: President's Cancer Panel Releases Report on Cancer Therapy, Prices

The President's Cancer Panel serves NCI and was created by the National Cancer Act of 1971.*  New news: The panel has now issued a report on "Promoting Value, Affordability, and Innovation in Cancer Drug Treatment."

The 70-page report is online here.   Trade press at  BioPharmaDive here.

The report focuses on cancer drug prices and the rising number of therapies that are priced >$100,000 per year.   From several word searches, although focused on current cancer policy, the report has virtually no discussion of genetics, genomics, precision medicine, or diagnostic testing.   (The word "test" only occurs in contexts like "testing new payment models.") 

Right to Try

In other news today, Right to Try legislation failed to reach a 2/3 majority vote in the House, falling 7 votes short.   Right to Try is "access to experimental options for life threatening illnesses when patients have run out of options."  It was supported by most Republicans and by the President per his State of the Union speech.  US regulators were generally not in favor, pointing out there are already "compassionate use" frameworks that are similar to the right-to-try concept, but follow trackable channels.  In October 2017, FDA commissioner Gottlieb "raised concerns" about the bill, as did Deputy Commissioner Rachel Sherman and CBER director Peter Marks.   I've borrowed from a trade article here.

Stem Cell Therapies & FDA

Stem cell therapies have, in some cases, been relatively unregulated as "practice of medicine," hence the billboards and odd clinics and claims we see in California.  FDA has vowed to crack down on that.  In a new article in NEJM, FDA outlines its path for regulation and approval of stem cell therapy products.  Trade press here.  The article cites to four recent FDA guidance documents.  The article states:
Such an approach is just one example of how the FDA is taking an original policy approach to the regulation of a highly innovative field, one in which our traditional approach to regulation may not be as efficient or effective as in more mature fields. 
As part of its efforts in the area of regenerative medicine, the FDA is also encouraging investigators who are involved in innovative product development to engage in dialogue with the agency early on in the process, including through informational meetings, before more formal discussions are held about submitting an application for an investigational new drug.... Our aim is to refashion our traditional tools for regulation to meet the challenges and opportunities presented by such highly innovative products as cell-based regenerative medicine.

Richard Rettig's 1977 book on the National Cancer Act of 1971:  "Cancer Crusade," Princeton.  Legislative history was a carnival and the history traced back a decade.

Monday, March 12, 2018

Genetics Company Receives OIG Subpoena March 12; Updates March 13

From Genomeweb open access:

OIG Subpoenas Myriad Genetics for Hereditary Cancer Billing Documents in Investigation

NEW YORK (GenomeWeb) – Myriad Genetics recently received a subpoena from the US Department of Health and Human Services, Office of Inspector General, related to "an investigation into possible false or otherwise improper claims submitted for payment under Medicare and Medicaid," the company said in a regulatory document.
According to a Form 8-K filed on Monday by the company with the US Securities and Exchange Commission, the OIG subpoenaed Myriad for documents related to its billing of government-funded healthcare programs for its hereditary cancer tests. The subpoena covers a period starting Jan. 1, 2014, through the date when the subpoena was issued. Myriad launched its 25-gene myRisk Hereditary Cancer test in September 2013.
Myriad said in the SEC document that it is cooperating with the government’s request and responding to the subpoena. At this time, no claims have been made against Myriad.
Myriad payments from Medicare are open public record, but Medicaid payments are not.  CY2014 CMS payments are here, CY2015 CMS payments are here.   CY2016 CMS payments have been released by state; they will be released about May/June 2018 by lab or doctor.
2014 click to enlarge

2015 click to enlarge
Cloud spreadsheets here 2014 and here 2015.
I've previously noted (October 2017) that there seems to be a 2015-2017 edit blocking use of 81211-81213 together unless a special medical circumstance dictates that use of a -59 modifier is appropriate.  CMS reiterated the same 81211/81213 edit in December 2017 for CY2018, here.  As a retired former medical director, and consultant giving advice to other labs about how CCI edits work and are enforced, I was puzzled how Noridian was handling the intersection of the 81211/81213 payments in light of the CCI edit; see Noridian's response here.  CMS guidance on when - and when not - to use Modifier 59, here.  Article by OIG authors on Modifier 59, here.
MYGN Update (3/13)

In a commentary at a Cowen and Company conference, early on March 13, 2018, [audio archived in cloud], CEO Mark Capone briefly commented on the subpoena, noting that Medicare was only 7% of Myriad revenue and that doctors typically currently order Integrated BRACAnalysis and MyRisk, the former of which is processed in a Sanger laboratory and with a large DupDel platform BART, and the latter in a separate NGS laboratory.  MyRisk was undergoing MAC contractor review and finds substantial mutations not found in BRCA analysis alone.   Currently billing is via 81162.

AMA Update (Posted 3/13)

Details of a February 9-10 AMA CPT meeting are confidential to participants and observers of the meeting.  However, AMA posts a brief public notice of the results on its website.  Revisions to the BRCA code set were determined and would normally appear in the 2019 code book.  In its public notice, AMA refers to "deletion of 81211, 81213, 81214."

Myriad Stock Down on March 13, 2018

In morning trading on March 13, 2018, MYGN was down about 10%, from about $33 to about $29.   Recent peaks include $43 on October 1, 2015 and $37 on January 1, 2018; recent troughs include $16 on January 1, 2016.

2014-2015-2016 BRCA Payments by CMS: Data Tables.

Tables of 2014-2015-2016 BRCA payments by state and lab here, with links to all data sources.

Friday, March 9, 2018

Very Brief Blog: Forbes Posts Strategic Analysis of Roche's Flatiron Acquisition

On February 15/16, there was a flurry of initial press about Roche's $1.9B acquisition of Flatiron (of which it already owned 12%). 

On February 26, Reenita Das, an SVP at Frost & Sullivan, provided a deeper-dive strategic review in Forbes - online and open access here.

A few takeaways, with direct quotes indicated:

  • Flatiron provides EHR services to oncology clinics, but "regulatory barriers prohibit a pharma from directly collaborating with a provider."   
    • Like any business or service, Flatiron has to create value - it sells something for $500 that creates $1000 of value for the buyer - yet not underprice or "create too much value" that might seem like a giveaway from one healthcare entity to another, especially where one is an ordering provider.
  • Flatiron has huge potential to facilitate "clinical trial eligibility assessment," improving speed and registration in clinical trials for Roche (versus other pharmas?)  
    • By speeding patient identification Flatiron "can help save developers millions of dollars."
  • Roche, with a market cap of about $200B, had $55B in 2017 sales, $40B in gross profit (above cost of goods), and $8B in net profit.  It's 60% oncology - think Genentech drugs like Avastin and Herceptin - much of its oncology franchise is burning through its patent life.
  • Flatiron is potentially a world pioneer in large scale real-world evidence.  
    • Chief Medical Officer Amy Abernethy MD has written a range of articles on RWE in the last couple years; see PubMed.
  • The "Flatiron oncology practice network and patient data can be used by Roche in its digital marketing programs, patient assistance programs, and other commercial applications."  (Direct quote from Das.)
  • Flatiron, Foundation Medicine, and Roche Oncology form a trio.  Roche also has agreements with digital genomics and machine-learning company GNS Oncology "to analytize proprietary EHR and next generation sequencing data for insights on drivers of drug response and cancer progression....Roche has one of the strongest portfolios of database and analytics platforms at its disposal to support its personalized drug discovery program in oncology."
  • Other biopharmas may look for NGS or EHR tie-ins to remain competitive against the Roche-Flatiron-FMI triad.  

For an earlier article on Flatiron at the time of its 2016 $175M round, here.  Aetna oncologist/medical director Michael Kolodziev joined Flatiron in July 2016 and transitioned to consultancy ADVI in October 2017.

Investors in GNS include:  Amgen, Celgene, Zambon Pharma, Regence BCBS, Horizon BCBS, Mitsui, GHO Capital, Fort Rock Capital.

Investors in COTA include:  IQVIA (publicly held holding company), EW Healthcare Partners, MSKCC, Boston Millenia Partners, Horizon BCBS, Hackensack Meridian Health, ATOC Holdings.

Prior investors in Flatiron included founding investor Google Ventures, Roche, Allen & Company, Baillie Gifford, Casdin Capital.

Thursday, March 8, 2018

Very Brief Blog: AMA Posts CPT Decisions from February 2018 San Diego Editorial Panel

CPT meets three times a year and posts decisions about 30 days after each meeting.  Decisions on proposed codes from February 2018 (San Diego) are posted at AMA, here.

The subsequent CPT application deadline was in mid February and the next CPT panel meeting is May 17-19, 2018, in San Antonio.  After that, the next CPT deadline is June 25, 2018, for the September 27-29 meeting in Boston.

My strictly informal tally (your count may vary) is 2 deletions, 8 revised codes, and 11 new code actions.  (Within the lab field, these include 30 new Cat I genetic codes as a set, and 10 new PLA codes as a set.) 

4 applications were rejected, 2 tabled, and about 10 withdrawn prior to voting. 

The panel passed a set of mixed revisions, deletions, and new codes regarding BRCA testing. 

Wednesday, March 7, 2018

BMJ Publishes Article Criticizing Level of Evidence in NCCN Drug Recommendations

BMJ has published a six page article by OHSU authors Wagner et al. that reviews and critiques the level of evidence used to issue NCCN drug recommendations, in comparison to the level of evidence used in FDA labeling.
  • The 2018 BMJ article, by Wagner et al, is online here.
  • The authors conclude, "The strength of the evidence cited by the NCCN supporting [non FDA labeled] recommendations is weak. Our findings raise concern that the NCCN justifies the coverage of costly, toxic cancer drugs based on weak evidence."
  • The authors note that 6 of 44 NCCN recommendations progressed to FDA-labeled approval during the writing of the publication.
    • Opinion piece in BMJ by senior author Vinay Prasad is here.
      • See a like minded summary here.
    • Trade press at Medscape here
    • Trade press at CNN here.
  • The last time this topic received a major airing was in 2009.
    • Annals of Internal Medicine review by Abernethy et al. here.
      • 2012 Deck by Abernethy at NAS, here.
    • Additional 2009 piece in JNCI by Twombly, here.
    • 2009 in NYTimes, here.
  • A 2016 article in JAMA Oncology looked at financial conflicts among NCCN reviewers, Mitchell et al., here.
  • Medicare regulations for the admission or exclusion of cancer compendia
    • At 42 CFR 414.930, here.
    • Rulemaking, November 27, 2007 (72 FR 66303ff) here.
    • Revisions, November 25, 2009 (74 FR 61901ff) here.
  • Medicare webpage for anticancer compendia here (numerous links).
    • 2006 MedCAC on anti-cancer regimen compendia here.



In 2014, Wang et al. used a similar approach to critique the level of evidence used by FDA authors for inclusion of pharmacogenetic labeling in drug labels; here.

In his OpEd, Prasad notes the project took 1000 hours of manual review of PDFs, and that review at BMJ was onerous, the project in total close to 24 months to publication.

FDA Allows DTC Access to 23andMe's 3-mutation BRCA test; Trends and Controversies

FDA has approved 23andMe to provide non prescription, direct to consumer marketing of a 3-mutation BRCA risk test.   The 3 mutations are founder mutations in Ashkenazi populations.

According to readily available press, about 1 in 400 people have a BRCA mutation, while the founder mutations may occur in 2% of Ashkenazi women.   Highly aware that a negative test does not rule out other BRCA mutations (or mutations in other breast cancer risk genes), the FDA released the test with "special controls" (which can include warnings and education).   The 13 page letter to 23andMe is already online and lists a description of the special controls.

Shorter and longer articles at Genomeweb here and here.   A deeper dive additional article by Turna Ray here [2800 words].  New York Times here.  WSJ here.   23andMe's own blog about the authorization here.

Manyu Different Genetic Regulatory Innovations from FDA 

This new authorization follows a trend of rapidly released genomic test regulatory innovations at FDA.  The following form a moving wavefront of FDA innovation:
  1. Allowing easier release via new pathways for FDA endorsed DTC genetic testing in early 2017.
  2. Approval of the OncoMine Dx Target 23-gene panel in lung cancer, with 3 PMA approved genes and also with 20 clinically reportable genes in June 2017.  
  3. Clearance of the MSKCC large gene panel tumor test in mid November 2017 based on a pathway using New York State approval has the linchpin.
  4. Approval of the Foundation One CDx test in late November 2017 with two novel features:
    1. Most of the PMA genes were based on analytical concordance or bridging studies.  For these genes, the results are analytically similar to results with at least one previously approved kit (and not necessarily on clinical trial or clinical data specimens).   
    2. Release to clinicians and patients of "signatures" that are not FDA approved, such as MSI and TMB. 
  5. Release of BRCA testing with very small DTC panels (this article).

Mutation Prevalence in 4-Grandparent Ashkenazi Populations

Last summer, Walsh et al [UW-Seattle] ran a 23-gene test breast cancer risk test in 1007 women with breast cancer and 4 reported Ashkenazi grandparents.  74% of all breast cancer risk mutations were a BRCA founder mutation, 5% were a different BRCA mutation, and the remaining 22% had a mutation in an entirely different breast cancer risk gene.   Altogether, a mutation in some gene was found in 14% (142 of 1007) patients in this ethnic cohort.   Presumably, as soon as you move to less than 4 Ashkenazi grandparents, results will diverge.  In a different area of genetics, Haque et al. (2017) reported widely different recessive risk profiles across ethnic groups in over 300,000 persons tested.  


As the FDA becomes more flexible and less paternalistic, fewer will complain the agency is too paranoid.   

But the flip side is that more stakeholders will be concerned about unintended risks or adverse events.  While the FDA allows this DTC test, the FDA press release states that: "The use of the test carries significant risks if individuals use the test results without consulting a physician."



While CEO Anne Wojcicki noted that "being the first and only DTC genetics company to receive authorization to test for cancer risk without a prescription is a major milestone" - and that's true - the authorization is based on technical accuracy and controls such as patient warnings, which other labs should find easy to replicate if they want to.

The FDA cited a 1997 NEJM study as its source of statistics.

Note that the test is described as "authorized" rather than cleared or approved.

The approval is described as de novo, but the detailed documentation for the authorization and pathway may not appear on the FDA website for weeks or months.   An example of a 77-page earlier FDA scientific review and decision on 23andMe testing is here.   [Update: At least a 13-page letter to 23andMe is already online; in other de novo approvals, full FDA paperwork can lag a long time before public display.]

BioPharmaDive describes the test as "tentatively OK'd by FDA" but I can't tell what's "tentative."

In her long-form article, Turna Ray notes the paradoxical positioning of FDA regulation.   FDA authorizes accurate DTC testing by 23andMe, but requires confirmation by another lab for clinical action, and the second lab is likely to be a "pure LDT" and not be FDA reviewed at all.  

FDA does not generally regulate LDT genetics.  However, it does proactively regulate DTC genetics with clinical implications; (ancestry or paternity is non regulated). 

CMS Creates Special Webpage for MoPath Date of Service Rule

CMS has created a special website that lists the lab CPT codes where, for a hospital outpatient origin specimen, the performing lab must bill, rather than the hospital.    The instructions conform to codes that were, and remain, OPPS "Status A" which means that up til now, the hospital was responsible for billing but the codes weren't bundled to a visit or procedure.

CMS is ignoring some misstatements in its November final outpatient rulemaking, such as saying the new billing principle didn't apply to genomic sequencing procedure codes [82 FR 52536 sic].   CMS said that, but didn't mean that, and is applying the DOS exception to Status A mopath codes.   These are human molecular pathology codes; microbial molecular codes are not part of this exception.

Find the CMS webpage here; download a zip file from it.  The zip file includes an Excel spreadsheet of Status A OPPS Lab Codes, and a PDF with a paragraph of explanation. 

The billing authority is obligatory.  Up until January 1, the hospital was obligated to bill Medicare (whether the test was performed at-hospital or at a referral lab).   This year, the performing lab is obligated to bill (whether it be the hospital or an outside lab.) 

The rule is difficult for some referring labs because they often don't know if the specimen is from an inpatient, hospital outpatient, or just an incoming sample to the hospital (not a patient of the hospital on the day).   The rule also creates a new date of service, which is the "date the test is performed."  In rulemaking, CMS declined to define this date further, and, when asked, declined to formally define it as "the date of the final report," [82 FR 52538] leaving implementation to the laboratory. 

March 6: CMS Updates New, Later Completion Date for NCD for NGS Testing in Oncology

For the CMS NCD on NGS testing in oncology, the agency has officially pushed the completion deadline from February 28 to March 16.


On November 30, CMS released a highly impactful proposed National Coverage Determination governing uses of next gene sequencing testing in oncology, with wide-ranging inclusions and exclusions.   The original comment closure date of December 30 was extended, on December 20, to January 17, because the FDA had newly (finally) released its evaluation paperwork on the Foundation One CDx test. 

On Wednesday, February 28, CMS missed the original final NCD announcement date. 

On Tuesday March 6, CMS posted the new final date as Friday March 16.   This fits a statutory deadline of 60 days after the extended January 17 comment period.   CMS explained: "We are continuing to review and evaluate the high-volume of public comment, and expect to complete the process soon." 

The final NCD could appear before the announced deadline of March 16.   For my comments a few days ago on the rationale for the extended process, see an earlier blog, here.

Sunday, March 4, 2018

CMS Hasn't Released a Final NGS NCD for Cancer Patients: Here's Why

Update - CMS released the Final NCD on March 16, 2018, with revisions that met most of the concerns raised by the WSJ author and others.   See Final NCD here.


Update: On Tuesday, March 6, about a week after the original  completion date, CMS updated its website to give a new expected completion date of March 16.   The rest of this original blog stands as written, below.

On November 30, as part of its joint review with the FDA of the Foundation One CDx test, CMS released a wide-ranging NCD with implications for all Medicare patients with a early or late stage cancers.    The normal 30-day comment period was extended from December 28 to January 17, because FDA didn't release its evaluation and review of the FMI test until just before Christmas. 

As of early March [Until March 6], CMS was still posting that the NCD completion date would be February 28:

But CMS didn't release the finalized NCD.  What happened?

All signals are that the NCD was probably finished and ready for release on time, on February 28.  CMS took no opportunity to revise the release date, as it had when it publicly posted a revised comment period date.   It's likely that something intervened - the Weill-Cornell Op Ed in the WSJ on February 25.   Here's a screenshot:

This Op Ed hits the right key words - "needless limits," and "regulatory threat," etc.   And consider where this lands.  On Monday morning, this Op Ed was on the breakfast tables of senior health staff for Senator McConnell, Senator Hatch, Senator Schumer, Senator Feinstein, and so forth.   Lots of retirees also saw it early in the morning.  Staffers at the White House and OMB saw it, many of which had no clue what was being discussed. 

This was enough to slow down the process.  And CMS had another justification, if it needed:  it should get 60 days from the end of the comment period, which was January 17, so probably Friday March 16 rather than Wednesday February 28.   This 60 days is pretty black and white; it's at SSA S. 1862; "60 days from the end of the comment period."

What will happen next?

What will happen next will depend on whether the "pull the brake" moment resulted in a short extra review at higher levels, which could lead to a delay of a couple days in the finished document, or whether enough confusion is raised to lead CMS to release the document on a new deadline of March 16, perhaps with new revisions. 

Analysis.  Most higher-ups could probably be calmed down by explanations by medical staff (e.g. mid level staff) that the NCD was correctly drafted, wisely revised, and ready to go.   Since higher level staff probably won't have new articulate questions of their own, the extra review (for better or worse) would probably not be very long nor result in document changes.   Still, I'd look for CMS to release the NCD on a Friday evening at 5 or 6 pm - thus arguing for Friday March 9 or Friday March 16, even if it's ready to go on March 5.

A Forbes op ed on March 6 by health journalist Elaine Schattner supported wide access to NGS testing for cancer patients.
A subscription article in StatNews on February 21 made points similar to Elemento's WSJ piece.