Using the CMS 2015 provider database, a couple labs received up to double the fee schedule price, per EGFR test. This is one entry point into an unusual policy quirk at Medicare.
- For several years. the MolDX Program has had an online article requesting that labs using Roche Cobas kits for EGFR testing add modifier -22 to claims.
- Then: No public data on actual prices paid were available.
- Now: The various CMS Open Data projects now provide a window into upgraded payments for some labs for CPT code 81235 in 2015 and 2016.
- Extra payments via -22 modifier could help labs beat PAMA fee cuts.
- But: Extra payments (as much as 200%) for some CPT codes on the CLFS, to certain labs, may raise concerns by labs elsewhere that it is difficult to compete on a level playing field (e.g. Mayo in Minnesota; GeneDx in Maryland).
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More details after the break.
If you google the words EGFR CPT code, this is the boxed top hit you get at Google:
The pic shows an instruction from the Medicare contractor website Noridian (here), which, effective summer 2013, requires the FDA approved EGFR mutation tests "Roche Cobas" and "Qiagen Therascreen" to be billed with a -22 modifier. According to the Medicare claims processing manual, Modifier 22 represents payment modified due to "exceptional circumstances" and CMS instructs, "MACs may increase or decrease the payment for a service only under very unusual circumstances based on review of medical records or other documentation" (here, 20.4.6).
Note that this article on -22 billing for CPT code 81235 appears on the Noridian website, but a journalist or researcher would not be able to find it on the standard CMS website for LCDs and articles.
Sorting CMS 2015 Claims by State and Laboratory
Using provider-level data for CY2015, we sorted CY2015 81235 claims by non-MolDX states and by MolDX states, with line items with each laboratory providing 81235. Total MolDX MAC payments for 81235 were $3.0M, and non-MolDx payments were $1.1M. This 75% figure for MolDX is similar to the national 85% figure for MolDX for all molecular pathology services.
Nationally, there were 12,180 Part B 81235 payments in CY2015. A total of 59 NPI's billed CMS for 81235, of which about 57 were paid at or below the fee schedule.
MolDx vs Non MolDx States: MolDX States Have Higher Variability in Payments
The average payment for 81235 in non-MolDX states was $325, SD $21. The average payment in MoLDx states was $342, less than 10% higher, but with a SD of $72, three fold higher.
Payments to 2 Labs Drove MolDX Variability in 81235 Payments in 2015
While non-MolDX states had 81235 payments tightly segregated around $329, the fee schedule price, MolDX had outlier high price lab payments, for Genoptix at $624.84 and for Cynogen at $465.24. The Genoptix payment per test was 190% of 1.9X the CLFS fee schedule price. The Cynogen average price was 141% of the fee schedule. In other words, 1.7% of labs labs billing Medicare (1 of 58) and 2.4% of EGFR claims (271/12180) received the highest payments.
While it's not relevant to the price per test analysis, I don't think anybody in the lab industry can look at the list without spontaneously noticing that the top price-winners, Genoptix and Cynogen, were each part of big companies - really big companies ($50-$200B). (For comparison, Quest and Labcorp are worth $10-15B). Genoptix was acquired by Novartis in 2011 for $470M; Novartis has a market cap of $200B. Cyanogen was owned by Abbott Laboratories, which had a market cap in 2015 of about $50B. Total Part B payments to Genoptix and Cynogen in 2015 were $31M (47 codes) and $3M (14 codes) in 2015, here.
How MACs Select Which of the Many FDA-Approved Genetic Tests Get Extra Payments
While MolDX has payment instructions for using the -22 modifier for several FDA approved genetic tests (such as EGFR), here, most by either Roche or Qiagen, there are several dozen FDA-approved genetic tests.
Glimpse into CY2016
Lab specific data isn't available for CY2016, but geographic locality data is available for Northern California and Southern California.
- NCal labs were paid for 117 EGFR services at $329 each, exactly the fee schedule (total $38,353). That's the familiar fee schedule price for EGFR.
- SCal labs did much better. They were paid for 4,732 services at $1,899,331 total, or $401 per test.
- While the distribution of tests is unknowable from this gross data, if we assume that SoCal tests were paid at either $329 or $600, we would get 3468 tests paid at $329 and 1264 tests paid at $600.
- This would suggest that 1264/4732 tests or 27% of tests in SoCal met the "exceptional and very unusual circumstance" criterion required for use of Modifier 22.
- From 2015 to 2016, labs are getting better at meeting the Noridian criterion for exceptional service and higher payments for CPT 81235 tests.
Underlying data is in the cloud here. The incidence of labs paid above or below fee schedule is shown here:
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Additional screen shots, though small, are shown below (see them also in the Excel spreadsheet). Note that the scales of the two pictures differ.
In lower figure, for the non-MolDx states, no lab had payments above the national fee schedule cap, although some had slightly lower payments, which can be due to deductibles or, in the case of Molecular Health, is difficult to explain by any mechanism other than the lab billing less than the fee schedule amount.
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The MolDX Manual, Version 14, October 2017, page 12, states that: "If the AMA has assigned a specific CPT code for an FDA approved test, MolDX may use a 22 modifier to indicate an increase in the service. The MoLDX Team will determine if the applification of the 22 modifier is appropriate in the pricing determination process and publish the appropriate coding billing for the test. Here.