Monday, August 14, 2017

Brief Blog: CMS - Cancellation of Some Bundled Payment Programs "Under Review"

Bundled payment programs are sometimes viewed as the messiah that can save us from the high costs of fee-for-service systems.   On the other hand, they have also been roundly criticized for poor design or lack of impact or both (here).

Healthcare Dive reports on August 14, 2017, that HHS may be proposing to cancel or heavily modify some bundled payment programs.   The Healthcare Dive article is here, citing a rule in process at the Office of Management and Budget here.  Coverage also at Axios, noting Secr. Tom Price's longstanding dislike of "innovative" CMS bundling programs (here). MedCityNews, here.

The rule has the title:  Cancellation of Advancing Care Coordination through Episode Payment and Cardiac Rehabilitation Incentive Payment Models; Changes to Comprehensive Care for Joint Replacement Payment Model (CMS-5524-P).

For a review of the "Mixed results" of payment reform experiments at CMS, also on August 14, see Nichols et al. at Health Affairs, here.  See also a Health Affairs article by Kahn, a couple days earlier, here.

The current director of the Innovation Center at CMS will be moving to a private sector position on October 1 (here).

Thursday, August 10, 2017

ACLA and NILA Propose CMS Must Follow PAMA Rules, Not "Panel Pricing" Rules, in 2018

On July 31/August 1, CMS held the annual new code pricing meetings for the Clinical Laboratory Fee Schedule.

One topic received special prepared comments from both the American Clinical Laboratory Association and National Independent Laboratory Association (ACLA and NILA).

Traditionally, CMS has markedly reduced what it pays for routine clinical chemistry through a body of rules for panel test pricing - a body of policy found in neither regulation or statute.  ACLA and NILA argue that the text of PAMA, read closely, overrides prior agency pricing rules for panels.

A lot of money is in play.  Currently, the chemistry panel test codes pay out about $700M per year in Part B (here), while the panel prices typically represent a discount up to 75% on the analytic components if they were individually priced tests.

I summarize my understanding of the arguments in bullet points next, and for further discussion, see a link at the end of this blog to a PDF document in the cloud that includes my informal transcripts of the NILA and ACLA public discussions.


o   Based on public records, CMS pays $700M through the CPT chemistry panel pricing codes. 
o   The panel pricing policies probably save several hundred million dollars.

o   PAMA law requires CMS pay for lab tests, based on each CPT code, and based on market prices.  There is no option in PAMA that allows for the complex repricing maneuvers that occur today under CMS panel pricing rules.
o   NILA and ACLA are very aware of this and they are warning CMS it cannot apply panel pricing rules under PAMA.

o   To my eye, taking PAMA literally, CMS has only a few options.
§  (A) Ignore PAMA, continue panel pricing, and risk legal protests; or
§  (B)  Circumvent PAMA by making its own new G codes.
o   There is a chance that a “leg fix” could be sought by CMS to restore the panel price concept that was superseded by PAMA, and CMS might foresee that a quite large dollar volume is involved.

An 11-page PDF of the NILA and ACLA arguments, along with my own introductory summary, is in the cloud  here.

Let's show an example, a hypothetical.  Let's say a 12-panel test is $20, and each of the analytes is $10.  A doctor orders the 12-panel test, and gives several ICD-10 codes as justification. The laboratory notes that none of the ICD-10 codes justifies the 12th analyte, and under CMS instructions, the lab can bill only for analytes that are medically necessary.  So the lab bills for the 11 analytes.   Currently, no stack of analytes exceeds the cost of the corresponding full panel, so CMS pays no more than $20 for the 11 analytes (ghost price ATP11).  If PAMA is taken literally, the lab is billing 11 CPT codes for 11 analytes, let's say at $10 each, so under PAMA the payment rises to $110 instead of $20.[*]

There may be a parallel to the 2009 federal appellate case Hays v Sebelius.  For some years, statute had required CMS to pay for Part B injectible drugs at 106% ASP.  However, CMS informally applied its own commonsensical "least costly alternative" pricing, which lowered prices.  Court said no: CMS must pay as written in statute.  Here, for the lab industry, CMS pays for panel tests with a capped, "commonsensical" rule which lowers prices.  But if this informal rule is challenged, a court may say no:  CMS must pay for the codes exactly as instructed by Congress in the PAMA statute.

[*]  Readers may recognize the Merchant of Venice principle at work, wherein a contract is suddenly and dramatically interpreted adverse to the party that wrote it.

For a deeper dive into quirks and values of panel pricing, here.

Tuesday, August 8, 2017

Brief Blog: Patrick Conway MD, Chief Medical Officer, Leaves CMS to Join BCBS North Carolina

Patrick Conway MD, the high profile Chief Medical Officer of CMS and the head of its Innovation Center (CMMI), is stepping down from government service.

On October 1, 2017, Conway will become the CEO of BCBS North Carolina.

Conway has served at CMS since 2011.

Triangle Business Journal here, Washington Examiner here.


I recently posted links to several of Conway's Youtube speeches, with unoffical transcripts, here.

Brief Blog: SoCalBio To Hold DIgital Health Summit (November 7); Annual Conference (September 29)

SoCalBio Digital Health: November 7
The Los Angeles-based Southern California Biomedical Council holds its first ever digital health summit at USC on November 7, 2017.  Registration here, agenda here.   The conference focuses on IoMT - Internet of Medical Things - and includes panels on remote patient monitoring, opportunities and challenges for IoMT, providers & efficiency, and new frontiers (genomics, AI, digital biomarkers).  

SoCalBio Annual Conference: September 29
SoCalBio's 19th annual conference will be September 29, 2017, at the Hilton Long Beach; website here.

CLSA in Beverly Hills: Robert Califf MD: August 24
Not related to SoCalBio, but sponsored by the California Life Sciences Association, CLSA, former FDA commissioner Dr. Robert Califf will be speaking in Beverly Hills, Thursday, August 24, 2017, webpage here.

Concentric Circles of Innovation in Advanced Laboratories

The Sky Is Falling
In the lab industry, there is much concern that commodization and reimbursement pressures (from PAMA to laboratory benefit managers or LBMs) are killing profitability and innovation, and could eventually reduce customer service.

Digital Genomics
At the same time, new horizons are being explored, such as digital genomics.  See, for example, my discussion of DarwinHealth, here, and a protype overview of the "digital genomics industry," here.  But more evidence of "digital genomics" is everywhere.  For example, in one day I saw that the Boston academic spin-out lab Claritas Genomics emphasizes its alliance with digital genomics firm WuXiNextCode, itself a spinout from the famous legacy firm DeCode.  And the former CEO of Claritas Patrice Milos is now CEO of a digital genomics firm Medley Genomics, with several co-founders from the computer science departments of Princeton and Brown.  In the last couple weeks, more news from Genepeeks which uses genetics combined with software called "Virtual Progeny" - a heavy bioinformatics play in the preconception space (see patent).   Veritas Genetics acquires artificial intelligence firm Curoverse.   Genome analytics firm Genoox raises $6M.  The list goes on.

But in addition to just improving a service (like more sophisticated interpretation of sequence data or better integration with EHRs),. Digitization is also allowing firms to change the nature of their offerings and their scope-and-scale in creative ways.   I'll discuss this with reference to two works, the classic Nobel prize winning work of Coase in the 1930s, and a new 2017 book on "complementary innovation" by Robertson.

Is "The Nature of the Firm Lab" Changing?
"The Nature of the Firm" is a 1937 economics paper (which won the Nobel in 1991) on how firms develop and thrive best as independent units or as conglomerates, what is insourced, what is outsourced - i.e., the boundaries of the firm. (The answer has to do with "transaction efficiencies," specialization, and other factors; only part of the answer is economics of scale.)  

This sounds esoteric relative to the nitty gritty business of getting in blood and tissue samples in the door and issuing a report back to the physician.   But the business school perspective helps in understanding, categorizing and predicting real-world changes in the genomics industry.  [more after the break.]

Wednesday, August 2, 2017

Very Very Brief Blog: Full CMS Transcript Posted for CLFS Two Day Meeting

Many readers track by blog feed, therefore, notice of an update.

Yesterday's blog about the CMS Clinical Lab Fee Schedule meeting has been updated with a full, two-day transcript.   Click HERE.


Tuesday, August 1, 2017


On July 31 and August 1, CMS held its annual CLFS new code pricing meeting.
    CMS website here.  My earlier blog with an overview of the agenda, here.

An unofficial rapid transcript of both day one and day two is online in the cloud HERE.
     144 pages, 80,000 words.  This is a Word doc for readers to download and annotate.
     An alternate version as PDF is here.
     The CMS list of all codes to be discussed is here.

For video, CMS Youtube Links are here:
  • Monday July 31 morning session here.
  • Monday July 31 afternoon session here.
  • Tuesday August 1 morning session here.

More after the break.

Thursday, July 27, 2017

Brief Blog: 2014-2015 Evolution of Part B Payments for BRCA Testing

The Medicare Part B provider database (here) gives us a window into CMS payments for BRCA testing in recent years. I show data for 2014 and 2015; similar public data is online for 2012-2013 but in a less user-friendly format.   Details after the break.

Brief Blog: Medicare Payments for Quantitative Immunohistochemistry (88360, 88361)

AMA CPT provides two codes for quantitative immunohistochemistry, 88360 for manual, and 88361 for computer-assisted.

How common is their use?  We used the 2015 Part B Provider Database online at CMS.  Data after the break.

Brief Blog: Advamed's Value Based Frameworks for Medical Devices and Diagnostics

Over the past two years, there have been a flurry of value based frameworks for drug pricing, especially in oncology.  For a review from April 2017, see here.

Advamed has set up an elaborate webpage of resources for its Value Initiative for medical devices and diagnostics.  The Value Intiative is found here.   Special white papers, released in May 2017, are dedicated to medical devices in general (here) and to diagnostics (here).  The white papers are co-branded with Deloitte and run 22 and 24 pages, respectively.

Wednesday, July 26, 2017

Brief Blog: CMS Payments for Automated Chemistry Test Panels

On Tuesday, August 1, the PAMA Laboratory Advisory Panel will convene at CMS and at 230 pm, will begin to address conflicts and dilemmas between PAMA pricing rules and the arcane rules through which CMS pricing clinical chemistry panels.   Be there or be square.  But before you go, brush up on the report of the 2016 Panel Test Pricing Subcommittee, here.

For details of how these tests are utilized in the Part B Medicare population, after the break.

Tuesday, July 25, 2017

Brief Blog: Medicare Data on Colon Cancer Testing Methods

While colonoscopy is a widely utilized method of screening for colorectal cancer in the U.S. (here), it represents a high water mark for cost of a screening service.  In most European countries, colonoscopy is not the routine screening method for CRC (See Bretthauer et al. in JAMA Internal Medicine 2016 176:894, here; see also the Op Ed by Lieberman, here.)  For articles on US adherence to guidelines, see Cyhaniuk 2016 (here) and Klabunde 2013 (here).

Medicare (see here) covers three fecal-based diagnostic tests:
  • FOBT testing (fecal occult blood aka guaiac testing, which requires multiple tests and avoiding meat consumption ;but costs only $4.77
  • FIT (fecal immuno occult blood testing; $21.77).  
  • Exact Sciences Cologuard (FIT + DNA testing; about $500)
Uptake for all CRC screening tests is very bad in some challenging populations, as low as 27%, as shown in a current JAMA Internal Medicine article by Reuland et al. (press here, article by Rueland et al. here.)

How commonly used are the classical fecal tests in a country which seems to have a near-gold-standard of jumping right to colonoscopy?  Details after the break.

Monday, July 24, 2017

CMS Posts Agendas for July 31 and August 1 Lab Meetings

Each July CMS holds a public meeting regarding pricing and payment policies for upcoming new laboratory codes.   In mid June, CMS announced the dates for this meeting as July 31/August 1 and posted the list of new and appealed codes (there are 61).  See here.

This week, CMS published the Agenda for the July 31 meeting, as well as the Agenda for the subsequent PAMA Laboratory Advisory Panel Discussion.  The meetings will be streamed live, with info included on the agenda pages.
  • July 31 agenda here - mostly public stakeholder presentations, including individual companies as well as large associations like CAP and AMA.
  • August 1 agenda here - mostly the Advisory Panel on view as they discuss the same codes.  In addition, the Advisory Panel has an afternoon agenda on panel test payments.  
    • The agenda notes these are "routine chemistry" panels, not genomic panels.

Brief Blog: The MEDICAIDIZATION of Healthcare - A trend?

The term "Medicaidization" dates back to at least 1990 (here in JAMA) but is still used pretty infrequently.  See a 2012 article about Medicaidization of social services (here) and an article on "Medicaid for All" at Frenkel Benefits, here.   I think the term is a useful concept - narrow networks, lots of downward pressure on pricing - and have used it in this blog a few times (here).

In May 2017 at Health Affairs, Margaret Murray and Mike Adelberg produce a well crafted and insightful article on Medicaidization - find it here.  They note, for example, that Exchange marketplace plans may likely also provide Medicaid managed care plans, suggesting shared expertise.

As of today, the term only has 2 hits on Pubmed - from 1990 and 1991 - but I think its use will pick up.

Brief Blog: Informa to hold annual FDA/CMS SUMMIT (Washington, December 5-6, 2017)

Informa has posted the agenda and discounted registration for the annual FDA/CMS SUMMIT, to be held on Tuesday/Wednesday, December 5/6, 2017.

The home page is here.   Agenda Day 1 is here, Agenda Day 2 is here.

Speakers include Scott Gottlieb, head of the agency, and Janet Woodcock, head of CDER.    

Topics include updates on post market studies and surveillance, FDA's use of patient reported outcomes, precision medicine, accelerated approval, expanded access issues (eg right to try), value and price transparency, Medicaid update, biosimilars in US versus globally, and rare diseases and pandemics.

Friday, July 21, 2017

Brief Blog: Getting This Blog in a Blog Reader or by Daily Email

We've set up a basic FEEDBURNER page for Discoveries in Health Policy.  

This facilitates signing up for DIHP via a blog reader (such as FEEDLY).  
There is also a simple sign-up box for a daily email update.

Click HERE.
You should see this page:

We're working on a more advanced system that will include an option for once-a-week updates.

Thursday, July 20, 2017

Brief Blog: What Medicare Paid HDL Lab, And How

This summer, I was describing to a client the "shell shock" that US payers experienced in 2013/2014 with an explosion of claims for cardiac biomarkers and pharmacogenetic testing.

In the case of cardiac biomarkers, this resulted in large Department of Justice settlements with labs in March 2015 (here).  As described in Forbes in April 2015, one lab rapidly skyrocketed to $400M revenue, $100M profit, but was bankrupt within a year (here).

Medicare has comprehensive online data for Part B payments from 2012-2015.   In CY2014, the Medicare MAC for Virginia paid $116M to HDL Laboratories (NPI 1629209853).  The top 20 codes garnered over 75% of the payments, click to enlarge:

About 25% of payments to this lab, totalling $30M, were for the nonspecific chromatography/mass spec codes 82541, '542, '545.  Some of these codes were deleted by 2016 (here).

Most tests were $15-50, the only outlier being 81225, CYP-P450, at $289.   Full data is available at the CMS 2014 database, here.

In CY2015, payments to this lab were still nearly $40M.   News stories evolved rapidly from the WSJ's first article in September 2014 (here) to discussion of the lab's bankruptcy filing in June 2015 (here).  See also a 2015 story at Dark Daily (here).

Today, both private payers like Aetna and Medicare payers like Noridian (MolDX) have much stricter controls against payment for cardiac biomarker tests (here, here).

Another lab that found itself in difficult times in the same 2014-2015 period was a New Orleans-based genetics lab (see NYT here); UTC Laboratories NPI 1720342884 did business as Renaissance Rx (here).  It appeared to do about $168M of business with one Medicare MAC in CY2014, based on data in the same CMS database.   For example, its billing of $34M for 81225 (CYP) was 32% of Medicare's nationwide CY2014 payments of $108M for that code.

Wednesday, July 19, 2017

AGENDA: Precision Medicine Leadership Summit, San Diego, August 21-24, 2017

The Agenda is out for the Second Annual Precision Medicine Leaders Summit, to be held in San Diego, August 21-24, 2017.

Monday August 21 will be workshops; the main conferences runs Tuesday-Thursday, August 22-24.

Full agenda is online here.

CLINVAR Lists Ten Labs Meeting "Data Sharing Criteria"

CLINVAR has published its initial list of ten labs meeting data sharing criteria which it describes as "essential for supporting genomic medicine and a critical part of quality assurance."

The CLINVAR lab listing page is here.  The American College of Medical Genetics has very strongly supported open-access genomic data sharing, as reiterated in early 2017 (here, here).   Additional subscription coverage at Genomeweb, here.

(Image captured 2017/7/19)

Chief Medical Officer of NHS Advocates for More Genomic Testing in Healthcare

In an annual report released last week, the Chief Medical Officer of the National Health Service in England advocates for more genomic testing for "an era of precision medicine."

Coverage at The Guardian here.   Home page for the report, by Dame Sally Davies, here.  The actual PDF report, here.  The report is an eight-chapter, 256-page review of clinical genomics by policy topic, such as the UK 100,000 Genome Project, rare disease, prevention, diagnosis, and precision therapeutics.

Tuesday, July 18, 2017

Med-C Program Rebranded as Cure-One

Among the openings, mergers, closures of the genomics industry, rebranding is an occasional activity.  For example, in recent months Omicia became Fabric Genomics and NextDxGx, a laboratory benefit manager, became Concert Genetics.

In June 2017, the Molecular Evidence Development Consortium (MED-C) rebranded as Cure-One.  See the press release here and the new website here.   Dane Dickson MD remains founder and CEO  (Linked In here).

Cure-One announced a registry-based partnership Guardant Health in June, here.

Press release quoted below the break.  In related news, CLINVAR recently endorsed a set of major national genomics labs that follow recommended data-sharing guidelines (here).

FDA Documentation for Illumina PMA Extended RAS Panel by NGS

On June 29, 2017, FDA announced PMA approval of the Illumina Extended RAS panel by next generation sequencing, along with on-label use in patients with colorectal cancer receiving Amgen's Vectibix (panitumumab).  Open access news at Genomeweb, here.

FDA documentation is now coming online (here).  

  • See the FDA page about the panel (here), 
  • the PMA160038 technical home page (here), 
  • 46-page instructions for use (here),
  • 43-page summary of safety and effectiveness (here).   

For FDA documentation on the Thermo Fisher Oncomine 23-gene NGS test, approved June 22, see links here.

Cancer Drug Development Continues to Swamp-Out Other Areas

See the open access blog ENDPOINTS NEWS here for several charts on biopharma development pipelines.  The blog aggregates summary data recently reported by EvaluatePharma and Analysis Group.  

From Preclinical and Phase I forward, Oncology dominates other areas of biopharma, with 8,651 projects tallied (for comparison, neurology has 2,517 and diabetes 749).   Thumbnail below; full graphics at the original blog.

For details see original blog as cited.

Monday, July 17, 2017

CMS Opens National Dialog on a More Effective, Less Complex Medicare

In physician fee rulemaking released July 13, 2017, CMS included a Request for Information (RFI) soliciting wide-ranging suggestions on how to make Medicare and our healthcare system more effective and less complex.

The goal is described best in the PFS Fact Sheet (here).   CMS states that it will not respond to comments on this topic in the final November rule, but rather, will keep them under advice for new initiatives and new ways to improve Medicare in the future.  The RFI comment box is open until September 11, 2017.

In addition to the payment and policy proposals, CMS is releasing a Request for Information (RFI) to welcome feedback on positive solutions to better achieve transparency, flexibility, program simplification, and innovation. This will inform the discussion on future regulatory action related to the PFS.  The agency writes:
We would like to start a national conversation about improving the healthcare delivery system; how Medicare can contribute to making the delivery system less bureaucratic and complex; and how we can reduce burden for clinicians, providers, and patients in a way that increases quality of care and decreases costs, thereby making the healthcare system more effective, simple, and accessible while maintaining program integrity and preventing fraud. 
CMS is soliciting ideas for regulatory, sub-regulatory, policy, practice, and procedural changes to better accomplish these goals. Ideas could include recommendations regarding payment system re-design; elimination or streamlining of reporting; monitoring and documentation requirements; operational flexibility; and feedback mechanisms and data sharing that would enhance patient care, support the doctor-patient relationship in care delivery, and facilitate patient-centered care. Ideas could also include recommendations regarding when and how CMS issues regulations and policies and how CMS can simplify rules and policies for beneficiaries, clinicians, providers, and suppliers.
In responding to the RFI, CMS should be provided with clear and concise proposals that include data and specific examples. If the proposals involve novel legal questions, analysis regarding CMS’ authority is welcome. 
CMS will not respond to RFI comment submissions in the final rule, but rather will actively consider all input in developing future regulatory proposals or future sub-regulatory guidance. 
CMS also solicits open-ended comments on how it might expand its telehealth program, but within existing statutory authority, which generally limits the site of origin (aka site of patient) to rural areas.

CMS includes the same offer for comments on innovation in its outpatient rulemaking published the same day.

Friday, July 14, 2017

2017 Digital Health Funding is High: $3.5B in First Six Months of 2017

Rock Health has released a report on digital health funding in 1H2017, which tallies $3.5B in new investments.  It follows a report by StartUp Health, tallying $6.5B in the same period.

RockHealth: $3.5B in Six Months

  • The report is summarized by RockHealth here.  
  • They sell the full 24 page report sells $99.  
  • See a news summary on Healthcare Dive, here.

StartUp Health: $6.5B in Six Months

The RockHealth report follows a report by StartUp Health just a few days earlier.

  • See the StartUp Health Powerpoint online here.  
  • See the respective Healthcare Dive story, here.  
    • StartUp uses different definitions of DHealth and tallies $6.5B in investments in 1H2017. For example, they include Grail (about $1B for genomics). 
    • Startup Health found that most activity was located in the SF Bay Area, with a 4:1 ratio between SF:NY.

Philips 2017 Report
Separately,  Philips runs an elaborate website,, which provides a 100 page 2017 report on digital health.

Contrasting Perspective
For a contrasting note, see an interesting article this week on Reuters on Jawbone's attempt to compete with Fitbit, titled, "Death by Overfunding" - here.

Views on Validation and Valuation
See also an article at Forbes by Fahad Aziz on the valuation of digital health startups and how they require V&V - valuation AND validation.  Here.   And a CNBC article by Christina Farr picks up on Aziz and adds further comment, here.

Thursday, July 13, 2017

CMS Posts CY2018 Proposed Rules for Physician and Hospital Outpatient Settings

After markets closed on Thursday, July 13, 2017, CMS released "inspection" or typescript copies of the Annual Rulemaking for both the Physician Office and Hospital Outpatient settings.   Comments due September 11.
  • Home page for new CMS rules, here.
  • Outpatient rule, here. 82 Fed Reg 33558-724 (167 pp).  CMS fact sheet, here.  
  • Physician office rule, here.  82 Fed Reg 33950-203 (254 pp).   CMS fact sheet, here.
Outpatient Rule

The outpatient rule includes proposed changes to the infamous CMS Laboratory Date of Service rule aka 14 Day Rule (page 33650ff).  CMS might allow labs to bill either only for ADLTs, or, for all genomic tests that are not otherwise bundled.  Other changes a proposal to cut 340B drug payments (see also a July 18 Hill hearing on 340B, here.)
  • Summaries at Beckers (here), American Pharmacists Assoc (here), Radiology Business (here), RevCycle (here), and National Law Review (here).
Physician Rule

The physician rule includes more specifications for the novel Diabetes Prevention Program (DPP; page 34129ff.)   CMS proposes it may consider reviewing "100% virtual" services under a new demonstration project (page 34171ff), which would "run in parallel with" the rest of the DPP Expanded Model.[*]   The DPP section runs almost 50 pages; payment would be tracked via 19 G-codes.

Other PFS topics include altering physician payments at "off campus" hospital affiliated sites (33978ff).  Note that physician quality reporting rulemaking is mixed between this rule and the June 20 MACRA rule (here).   There is a discussion of the new, Congressional mandated Appropriate Use Criteria (AUC) that must be consulted (preferably via EHRs) in the ordering of advanced imaging (34091ff).  Finally, CMS seeks comments on how to improve its criteria for E&M coding and grading (34078ff).
  • Summaries at Beckers (here), Medscape (here), Fierce Healthcare (here), Healthcare IT News (here), Healthcare Dive (here).

[*]  CMS gives the DPP its own separately titled press release, but the so-titled press release just describes the overall PFS rule with only a bland sentence that it includes DPP.
Informal aggregated web clippings, online here.

Unwrapping Medicare Advantage Provider Payment Levels: New Study

This week, JAMA Internal Medicine publishes a new study by Trish et al. which researches Medicare Advantage payments to providers and compares them to payments made on various fee schedules under Traditional Medicare.

The article is online here; an editorial on the article, by Berkeley's James Robinson, is here; and coverage the Healthcare Dive is here.

The take-home lesson is that physician payments are about the same under Medicare Advantage and under Traditional Medicare.  However, Medicare Advantage plans are able to negotiate payments circa 70% of Medicare fee schedule rates for some lab tests and some DME.

Tidbits follow the break.    Pm a separate note, for an interesting current overview of ways to make Medicare Advantage more innovative, by Broome & Mostashari of Aledade, see their July 2017  Health Affairs blog here.

AMA Publishes Agenda for September AMA CPT Meeting

The AMA has posted the agenda for the September CPT Editorial Panel meeting.  See the agenda at this webpage here (click on "Public Meeting Agenda PDF").

There are 63 agenda items.   It looks like six tabs 28, 29, 30, 31, 32, and 33 are molecular codes, of which 3 are MAAA codes.

For physician services, this September 2017 meeting will vote on codes for the CMS and AMA CPT 2019 calendar year.
AMA CPT codes approved in September 2017 will make the timetable for early 2018 RVU studies by the RUC, to appear publicly in July 2018 CMS rulemaking.  This allows CMS to finalize new RVU prices in November 2018, in time for for January 2019 CMS fee schedules, and in sync with the new 2019 calendar year for CPT.  Lab codes from this meeting will enter the July 2018 CMS crosswalk/gapfill meeting, also for the 2019 calendar year.
The meeting will be in Chicago, at the downtown Loews hotel, September 13-16, 2017, mostly Thursday-Friday September 14-15.

Thursday, July 6, 2017

Konica-Minolta Buys Ambry Genetics for $800M

Konica-Minolta, with financing from the Innovation Network Corporation of Japan, buys Orange County's Ambry Genetics for $800M.

News at:
  • MedcityNews here.
  • Reuters here.
  • New York Times here.
  • Genomeweb (subscription) here.
According to a 2015 CMS provider database, Ambry had $38M in Medicare Part B payments -- although because of MolDx coding rules, $31M fell under unlisted codes, typically used by MolDX when more than 2 genetic tests are used together. (Click to enlarge.)

Ambry has offered an anonymized genetic database called Ambryshare (here).  Other companies offered anonymized research-ready databases include GenomeDx (here) and Foundation Medicine (here).  Genomic datasharing has been strongly advocated by the American College of Medical Genetics (ACMG; here.)

Thursday, June 29, 2017

Brief Blog: CMS Posts PPT Template for July 31 New-Code Pricing Meeting

This year, CMS announced earlier in June that a TEMPLATE will be required for POWERPOINT presented at the annual CLFS new code pricing meeting - aka the crosswalk/gapfill meeting.

The CMS CLFS webpage is here.   Toward the bottom, see the Zip file for the Powerpoint Template.  The ZIP file includes both (1) a PPT template and (2) a brief PDF instruction file - for example, don't use color because CMS will be making printouts for itself in B&W.

For some earlier info on the CMS CLFS meetings on July 31 and August 1, here.  More info after the break.

Wednesday, June 28, 2017

Brief Blog: Diagnostics Patent Law After MYRIAD and MAYO PROMETHEUS

Two Supreme Court diagnostics patent cases from 2012 and 2013 - Mayo v Prometheus and AMP v Myriad - are so prominent they have their own Wikipedia pages (here and here).  Mayo/Prometheus held that algorithms between biology and clinical outcomes might often be "laws of nature" that are outside the scope of patents.  Myriad held that DNA sequences (even with annotation and purpose) are not per se patentable.

Daughter cases predicated on these two pivotal cases continue to roll out.
  • See Kevin Noonan's discussion of Cleveland Clinic v True Health Diagnostics (blog here, original case here).   
    • Noonan also cites to his April 2016 discussion of another diagnostics case, Genetic Technologies LDT vs Merial LLC (blog here,  original case here.)
  • Both cases tend to roll out and extend what isn't patentable by the "law of nature" exclusion subsequent to Mayo/Prometheus and Ariosa/Sequenom (Wikipedia here).
Generally, Noonan was disappointed in the Supreme Court rulings toward invalidating diagnostics patents and he views the rolling extension of these patent denials as unfortunate and perhaps requiring action by the Hill. Noonan writes,
"Unless the Supreme Court sees the error in its ways, or Congress overrules its Mayo/Alice decisions, technology transfer of university inventions will not be to startups and licensees but to copycats and pirates for the foreseeable future."   
Ouch.  See also Noonan's 2016 Nature Reviews Drug Discovery article here.   For an article on trying to improve diagnostics patentability, Morton & Clarke, here.

Tuesday, June 27, 2017

Thorough Table Comparing ObamaCare, House Bill, Senate Bill

FaegreBD Consulting, where I worked full time in 2015-2016, has prepared a thorough table comparing health benefits under current Obamacare, under the House amendments, and under the Senate amendments.

Timely - a Senate vote is scheduled for Thursday, June 29.  

The FaegreBD Consulting article is here, three-column analysis here (opens PDF).

Saturday, June 24, 2017

Brief Blog: Comparing Oncotype DX and Veracyte Afirma Adoption Curves

Veracyte is a publicly held, advanced diagnostics laboratory based in the SF area.   It has annual sales of about $65M and a market cap of about $275M.  In their current investor decks, they show the adoption curve of the Veracyte AFIRMA test with US payers (click to enlarge):

It's none too different in terms of pace and progress from a chart published in 2010 by Health Advances documenting the payer adoption curve of the Genomic Health Oncotype DX [Breast] test:

Both charts run 6 years, Oncotype from 2004 to 2010, Veracyte AFIRMA from 2011-2017.

Brief Blog: MIPS/MACRA Rulemaking for 2018 Published; Rapid Coordination of Doctor Metrics & Patient Benefits

CMS released CY2018 MIPS/MACRA rulemaking on June 20, 2018.

  • CMS press release, here.   
  • CMS 26 page summary of rulemaking, here.
  • Trade journal article here.
  • The official Federal Register version appeared June 30, here.
    • Federal Register, 6/30/2017, 82 FR 30010-30500 (490 pp).
  • Comment period runs to August 21, 2017 [60 days].
  • For an update on "physician payment reform" in general, in NEJM July 2017, here.
CMS Proposes Simultaneous Prevention Benefit (DPP) and Matching Metrics to Encourage Physician Awareness

Brief Blog: Use of KRAS Testing (CPT 81275) and EGFR Testing (81235) in Medicare Part B CY2015

In June 2017, Medicare released Part B payment data by CPT code and provider name.  The code is in an easily filtered, sorted, and downloadable database online (here).  Here we look at payments for 81275 (KRAS) and 81235 (EGFR).  Details and charts after the break.

Brief Blog: MolDx Updates NGS and Unlisted Code Guidelines (M00127, V3, June 21, 2017)

For a couple years, MolDX has required multiple genes performed as an ad hoc panel to be billed with 81479, the molecular unlisted code, rather than stacking individual CPT codes.   (The latter appears to be the instruction of the AMA CPT, as in AMA CPT Assistant August 2016.)

One of the pivotal MolDX guidance documents, M00130 V2, February 2016, appears to be no longer active on the MolDX website, although some other MolDX documents still refer to it.  Some of the same information is now in M00127, V3 which was updated on June 21, 2017.

M00127 V3 is online at Palmetto here.  I've also cut-pasted below the break.  A cloud archive of M00127 V3 is online here.

The instructions carve out NGS use of sequencing towards unlisted code billing (81479), although some AMA instructions in the CPT handbook state that genomic sequencing procedures are agnostic to method unless otherwise stated.   According to 2015 CMS data, about 99% of the use of 81479 in Medicare Part B was via the several MolDX policy MACs.

Brief Blog: Genetic Testing Best Practices Summit, Chicago July 24-25 2017

Healthcare Education Associations is is sponsoring a Genetic Testing Best Practices Summit in Chicago, July 24-25, 2017.    Topics range from clinical and ethical considerations with secondary findings to payer acceptance of gene panel testing and coding/reimbursement issues.  Many of the speakers are from leading academic medical centers.

Press release here.   HEA website here.  Conference web site here (if this doesn't work, google conference title.)

From Press Release:

Thursday, June 22, 2017

Landmark FDA Approval of NGS Gene Panel Test - Thermo Fisher Wins PMA Race

Thermo Fisher announced on June 22, 2017, that the FDA had approved a 23-gene version of its Oncomine NGS oncogene panel test for lung cancer targets.

  • See the press release here.
  • See the product website here - the Oncomine DX Target Test.
  • FDA Documentation under PMA #P160045.
    • The the FDA 51-page Safety and Effectiveness review of Oncomine Dx Target Test, here.   
    • The 398-page FDA User Guide, here.
    • The 6-page physician insert, here.
    • The FDA's approval letter here, June 22, 5-page.
  • See initial coverage at Genomeweb, here.   Genomeweb notes that the test can run on as little as 10 ng of DNA.  
    • A subscription deep-dive article at Genomeweb followed, here.
  • Coverage at MedCityNews, here.
  • Coverage at WIRED, here.
  • At, see the Drug/CDx page here, listing ONcomine Dx Target Test as associated with drug NDAs on four drugs, Tafinlar, Mekinist, Xalkor, Iressa (here).

Still in the FDA pipeline are tumor oncogene panel tests developed by Illumina and Foundation Medicine.

The cited Thermo Fisher press release is quoted below the break.  The product will be rolled out at a number of major US reference labs beginning in July.

Wednesday, June 21, 2017

Panel June 21 at BIO Conference: Federal Regulatory Perspectives on Genomics

On Thursday, June 21, at the International Biotechnology conference (BIO) in San Diego, I'm on a panel.   Speakers are Brian Carey (Foley Hoag LLP), Christopher Hall (President, Veracyte), Dan Todd (Todd Strategies LLC) and myself.

If of interest, my deck is in the cloud here.

Brief Blog: Medicare Payments for Pathology Slide Consultations in CY2015

Medicare recently released a database of all provider payments by CPT code in CY2015, here.

Pathology Slide Consultation Codes
Code 88321 pays about $90 for review of slides prepared elsewhere.  There were 181,427 services totalling $17,043,561 in allowed charges.   88325 is for "comprehensive" review (e.g. with medical records or imaging), paying about $180.  There were 8,224 services totalling $1,513,496 in allowed charges.  These are from summary 2015 data of all Part B services.

The provider payment database is just a bit different as it excludes providers with <10 services per CPT code.  Here, in this database, I tally $17,037,639 services for 88321+88325.   The top 10 providers were 19% of payments and the top 15 were 22% of payments.

Academic Institutions 
The top provider was Johns Hopkins ($690,728).  The third top was UCSF Dermatology ($555,931).  The sixth top was Washington University ($186,959) - showing that the dollars drop off pretty fast.

Flurry of Progress forHeartflow, But Medicare Coverage Lags Private Payers

Heartflow is a Bay Area company that has raised over $200M to create and commercialize sophisticated software that assays dynamic cardiac flow built on existing imaging technologies.   For an early, deep-dive article from 2011, see here.  For a more recent article, here.

This summer, Heartflow announces favorable assessment from BCBS Evidence Street (the successor to BCBS TEC).   See news here, here, here.   Heartflow has just completed some big hires, including former J&J Chairman William Weldon as Chairman of Heartflow's board, and experienced senior executive Michael Buck as EVP and Chief Commercial Officer.

Medicare Coverage?

The web also has some clues to the status of Medicare coverage.   An online reimbursement states that coverage is subject to LCDs and no LCDs have been announced (here; on web 6/21/2017).

A new layer was added in April 2017.  An online decision by the Departmental Appeals Board, a judicial panel at CMS, found that that Heartflow was appropriately denied enrollment in Medicare as an Independent Diagnostic Testing Facility (IDTF), and stating further that the MAC had determined "the service...was not reimbursable" (see the 25 page CMS judicial position here).
CMS argues the added software diagnostic service and novel report were bundled in prior payment for cardiac imaging test "and interpretation."  CMS maintained this, so far, despite arguments that the underlying imaging was purely spatial and anatomical while the new report was novel information about functional cardiac flow.   CMS argued that if the single Heartflow service was foreseen as not-billable, there was no need to enroll the company in Medicare. 
CMS precedents seem to fall on both sides.  In some cases in imaging, CMS has indeed made payment for additional diagnostic interpretation when clearly represented by CPT codes; see special codes for 3D rendering interpretation and mapping of CT and MRI exams.  See a 2016 story about older supplemental rendering code 76375 being replaced recently by '376 and '377.


A substantial part of the 25-page judicial decision is devoted to matters of due process, miswritten deadlines, etc.

Brief Blog: A Prototype View of the Digital Genomics Industry

Over the past year, there is increasing consideration of a "digital genomics" industry, which I've sketched in a prototype map below.

Full discussion after the break.

Tuesday, June 20, 2017

Brief Blog: Does MOLDX Manage 87% of US Medicare Molecular Pathology?

A few days ago, CMS released provider-specific and CPT-code payment files for CY2015.   See the initial blog here, which includes a targeted analysis of Medicare spending via unlisted code 81479 (here).    Later, we provided a brief overview of Medicare spending by several key categories (here).

Today's analysis sorts each state by Medicare mopath spending (codes 812xx 813xx 814xx 815xx) - and then aggregates states by MAC and by whether the MAC is part of MolDx.

If our analysis is correct, 87% percent of US Part B MoPath codes pass through MolDX states and policies.   More after the break.

Sunday, June 18, 2017

Brief Blog: Meeker Internet Trends 2017 Report: Emphasis on Healthcare

For some years, Mary Meeker of Kleiner Perkins has released an elaborate annual internet trends report.

The report for 2017 was released at the end of May:

  • See CNBC coverage here.  
  • Download the 355-page report here (free registration required).
Pages 288-319 cover digital health.  Noah Knauf, who joined Kleiner in 2016, is listed as lead author for the health chapter (here, here).

Friday, June 16, 2017

Brief Blog: CMS Molecular Payment Data CY2015

As noted in earlier blogs, CMS posts Part B data by provider name and CPT code for 2012, 2013, 2014, 2015.  The data can be displayed in a web interface that is very easy to sort and then download filtered data in Excel.

Although I'd usually post the Excel file in the cloud for you, it feels awkward to do so, because even though the data is publicly available, it contains hundreds of physician names, addresses, and NPI numbers.  However, you can easily find the data yourself or download it yourself [*].

  • You get a file of several hundred KB and about 2,000 lines by filtering the total database for codes beginning in 812, 813, 814, 815.  (If you're really brave, filter for 8nnnn - all lab and pathology codes - and you'll get a 100 mb dataset of 850,000 lines which does still open in Excel for me on a laptop, albeit slowly.)
  Quick View of 2015 MoPath Data
Biggest CPT Code by Provider
The highest claim line was $57M to Genomic Health for Oncotype DX.

Lines Required to Reach 50% of Payments
The second highest was $32M to Ambry Genetics for "unlisted code."  Just 12 claim lines out of 2000 total claim lines reached $240M or 50% of all payments for the year.

$1M or Higher
62 claim lines were at least $1M or higher (78% of all payments).  An earlier blog noted that 1/3 of all payments went through the unlisted code 81479, and 99% of that fell in MolDX states.

Click to enlarge:

More after the break.

Brief Blog: FDA Burst of Activity on Digital Health Regulation vs Innovation

On June 15, 2017, FDA Commissioner Dr. Scott Gottlieb issued a blog on the FDA's plans for a new Digital Health Innovation Plan.  It sounds like the plan will consolidate several years of planning on regulation of apps and digital health software, some legislative changes in 21st Century Cures, and Dr. Gottlieb's vision toward this kind of agency problem-solving.
  • The June 15 Gottlieb blog is here.
  • Coverage at Biopharma Dive here.
  • Coverage at MedCityNews here.
  • Coverage at MobiHealthNews, here.
  • In addition, MedCityNews on "avoiding legal misteps" in digital health, here; see also here.
  • In addition, a May 2017 article in WIRED on the same topic, here.  Interview with Bakun Patel, "associate center director for digital health."  For another current WIRED article on mobile health apps, here.
  • FDALawBlog on 21st Century Cures legislation and its effect on healthcare software regulation, here, here.
  • In past months, the Clinical Decision Support (CDS) Coalition proposed its own draft validation guidelines (absent clear guidance form FDA; here) and filed a Citizens Petition urging guidance to be released from FDA (here).

As quoted in WIRED: "As Patel, now the associate center director for digital health at FDA, was digging through the guidance’s 1,400 comments, he had a lightbulb moment. “We’ve been trying to translate the current regulation paradigm for digital,” he says. “But what we have today and what we’re going to have tomorrow are not really translatable. We need to take the blinders off, start with a clean sheet of paper.”

Gottlieb writes that he wants to continue to rapidly clarify what is NOT regulated by the FDA, and to introduce innovative and rapid processes for things that ARE regulated (third party reviewers, exemptions from review for minor updates.)

Brief Blog: CMS Posts Comprehensive Part B Provider Data Set for CY2015; 81479 Case Study

On June 15, CMS posted the fourth annual comprehensive data set of claims and payments to Part B providers.  See the home page for the annual data sets here and the 2015 data set here.

As described here in a recent blog, the data can be downloaded as very large 2 GB files incompatible with Excel and requiring database management software.  However, CMS also provides an extremely user-friendly online data screening and sorting webpage.   For a discussion of the value of the dataset (using 2014 data), here.  For my brief overview of how to use the dataset step-by-step, here.

For example, in one second, you can find that 22 entities billed CMS in 2015 for 81211 - BRCA sequencing - with from 11 to 13,717 claims paid per entity.[*]   In a minute or two, one could track 81211 payments (or any other code of interest) for any or all providers sequentially in each year from 2012 to 2015.

For an example of dataset use, see below the break.

Thursday, June 15, 2017

Brief Blog: MEDPAC releases annual report to Congress

MEDPAC is a standing federal body that issues reports to Congress on Medicare policy, and holds five or six public meetings a year on Medicare policy topics.

The June 2017 annual report is released today and weighs in at the usual 350 pages.  Here.

Topics include bundled payments for post-hospitalization care, Part B drug payment issues (e.g. physician office drugs like chemotherapy), use of "premium support" in Medicare, an alternative to current Medicare Advantage, the MIPS/MACRA metrics program, pharma/medtech payments to teaching hospitals, and an "overview of the device industry."

MEDPAC is harsh on the new MIPS metrics system, saying it will not help patients chose better physicians, help physicians improve outcomes, or shift CMS meaningfully toward better value for outcomes.   (But, the massive MIPS buro-juggernaut chugs on, here).

The medtech device chapter highlights Medicare's new-inpatient-technology add on payments, of which only 19 of 53 applications have been approved in 15 years, with only about $200M of add-on payments.
(For perspective, note that Medicare Part A is some $300B a year - that's over $3T in 15 years.  And the $200M allowed over 15 years was budget-neutral, by skimming a minute percentage off all other Part A payments - the $300B a year -  to create $10M or $20M a year in Add-On special payments).
DME medtech is mentioned, along with competitive bidding.  But the high disincentives to innovation by making new HCPCS DME codes virtually unobtainable is not mentioned.