Wednesday, July 17, 2019

Very Brief Blog: This Year's Proposed Gapfill Pricing: How Late Is It?

Each year, CMS has the option of pricing new lab codes through the crosswalk process of the gapfill process.  In the gapfill process, CMS determines in the fall these new codes don't have a good crosswalk pricing solution, and gives them to its MAC contractors to price in the following calendar year. 

MAC proposed prices are supposed to come out by late spring, receive public comment, and then final gapfill prices can be revised by the MACs for publication in the fall.

This year, the proposed gapfill prices are later than ever.  Here are some dates.

2015:  29 gapfill codes, proposed May 26, final September 25.

2016:  15 gapfill codes, proposed June 10, final September 30.

2017:  (No gapfill codes??)

2018:  15 gapfill codes, proposed June 13, final October 19.

2019:  18 codes under gapfill (list here).  No proposed pricing released as of ...July 17, 2019.

This year's gapfill pricing is over one month late, relative to recent benchmarks.

Links to blogs on various past years' gapfill processes, here.

CMS's own rules require MACs to submit contractor-specific amounts "on or before March 31," and since the only explicit thing CMS must do is calculate medians, the delay is perplexing (see 81 FR 41084.)  MACs are supposed to submit revised amounts by September 1, but they can't do that if the comment period overrides September 1 due to late release of proposed prices.

CMS states in regulation it will post gapfill proposals by April 30 (42 CFR 414.509) and take public comments for 60 days.   Thus, public comments will run this year til at least late September of 2019. 

CMS must provide an explanation of "rationale" for crosswalk decisions under statute (p. 41086), and promised to provide an explanation of gapfilled amounts after January 1, 2017 (p. 41086, bottom middle column and 42 CFR 414.506(d)(4).  )

Tuesday, July 16, 2019

Very Brief Blog: AMA Posts CPT Lab Codes for September Meeting

AMA holds 3 CPT meetings per year and posts the proposed codes in advance for public comment.   Lab codes are posted about 2 months ahead of the meeting, so comments are in before several AMA subcommittees meet.   Other CPT codes are posted about a six weeks before the meeting.

On July 16, 2019, AMA posted for comment the CPT lab codes for the Seattle meeting September 26-28.    (By July 19, AMA should also post current pending PLA code applications, too.)
  • See the AMA CPT PDF (with comment instructions) here.   
You can get a copy of the application form for comment, but you must meet AMA criteria as being an interested stakeholder directly affected by the code proposal.

I very briefly summarize the codes below.  See PDF for more details.  Note that in some cases, different applicants may submit for codes with related descriptors; whether that has happened to any of these, I'm not sure.

Tab 29
Four Tier 1 codes (SF3B1, etc)

Tab 30
Tier 1 NTRK

Tab 31
SF3B1 common variants

Tab 32
Tier 2 to Tier 1 for TP53

Tab 33
Tier 2 to Tier 1 for MPL

Tab 34
Tier 2 to Tier 1 for JAK2

Tab 35
Tier 2 to Tier 1 for IGH-BLC2

Tab 36
Tier 2 to Tier 1 for CCD1-IGH

Tab 37
GSP for Epilepsy Panel

Tab 38
GSP to remove RNA from 81445 and add new code

Tab 39
MAAA for Melanoma recurrence

Tab 40
Wound pathogens by PCR

Tab 41
Infectious agents UTI's by STI (sexually transmitted)

Tab 42
PCR, Nail pathogens

Tab 43
Antibiotic resistance testing

Tab 44
PLA Instructions.  Instructions on when to revise code text and when to use new code.

Tab 80
PCR for non-sexual UTI pathogens

Monday, July 15, 2019

Very Brief Blog: CMS Releases Physician and Lab Claims Data for CY2017

Each year, CMS releases CPT code based claims data for Part B in three formats:
  • National Part B data
  • State Specific Part B Data
  • Part B Data for each physician & lab by CPT code
National Part B data tends to come out in late summer or in the fall.  So does State-specific data, which is really MAC data broken out into state-sized spreadsheets (Noridian Oregon, Noridian Washington, Noridian Idaho, etc.)   For example, CY2018 data will come out in 2H2019.

Physician and lab data is released on a slower schedule, with a delay of about 18 months.  CMS has just released claims data for CY2017 by physician or lab. 

The home page for this annual data is here:

And the CY2017 data can be found here:

Click through via "interactive dataset" and "view data" and you'll reach a giant cloud database.   The key thing is to use the search panels at the right of the cloud table (for example, search by lab name, and get every CPT code and volume it was paid; search by CPT, and see every physician or lab paid for that CPT).   Use the Export button to export as an Excel spreadsheet. 

MoPath Codes in Cloud

I've put a 1500 line spreadsheet (150 kb) of all the labs billing all the CPT codes 811XX to 81599, in the cloud here.  Have fun!  (It would also be manageable to download all the lab codes into Excel - 8XXXX - about 800,000 lines and 100 MB.)

Of course, you could download anything of interest - cataract operations, prostatectomies, psychotherapy visits, etc.  

First Snapshot: 81162

Going back to the CMS cloud data, within a few seconds, I pulled all labs in the database billing BRCA 1&2 (81162) in CY2017 and downloaded in Excel:

click to enlarge
Lower End of Net Revenue

In CY2017, Tempus Labs did not seem to have much CMS revenue yet, NPI 1740733708, with 26 payments for CPT 81445 (5-50 tumor genes) at $602 allowed (charge $3800), and 18 payments for 88342 (immunohistochem) at about $100 each.

Nanthealth Labs, NPI 1295026938, had payments for 21-23 units each of 81235 (EGFR), 81401 (Mopath level 2), and 81479 (Mopath procedure), with allowed charges of $332, $129, $144, respectively.

Billing by Unlisted Code 81479

CMS paid $115M under Unlisted Code 81479, and 95% of the top 99% of payments went to MolDx states.

Of this $115M, $32M or 28% went to Assurex, for 14,733 tests at $2,180 allowed payment per test.

click to enlarge
Billing by Foundation Medicine in CY2017

Recall that in CY2017, FMI did not yet have its NCD for coverage (which was proposed only in November 2017), and it had never gotten much Medicare payments in his home MAC in Massachusetts.

FMI opened a satellite lab in North Carolina, where the Palmetto MAC paid it for 1,687 services at $3416 each (charge $5800).

click to enlarge

FMI was acquired by Roche in June 2018 for a total company value of $5.4B (here), or a multiple of 777 times its CY2017 Medicare Part B revenue.

Use of Somatic Panel Testing Still Small in CY2017

Although 2017 was the year CMS unveiled its proposed NCD for somatic panel testing by NGS, usage was still pretty small in 2017.   CMS paid for 1,302 cases of 81445 (5-50 genes) and 4,338 cases of 81455 (51+ genes), along with another 1,600 cases of FMI Foundation One paid by MolDx as 81479.   Still, these tallied only $3.5M of direct payments for 81445/81455, and another $5.7M of FMI payments as 81479.

My point is, this would be less than $10M of the roughly $500M CMS spend on molecular diagnostics in CY2017.  For comparison in 2017 CMS paid Exact Sciences $118M for 231,000 cases of ColoGuard, at an average payment of $501.6316.

Click to enlarge / 81445, 81455


National Part B data files are here.   State level "carrier level" data is here.

Lab Industry in General

I downloaded all the 8xxxx code date for 2017, an 800,000 line, 80MB file my laptop just barely handles and slowly.

But some big-data trivia.  I tallied $6.85B in payments.  About 30 claim lines (provider x CPT) paid over $10M.  The highest was Exact Sciences, paid $118.6M.  Among the top ten pay lines, most were specialty genomics (e.g. Genomic Health), but Inform Diagnostics garnered position 7 with $20.5M for 88305 (surg path) and LapCorp got position 9 with $16M for 84443, thyroid.  LabCorp also got positions 13 and 14 for Vitamin D and for Lipids, respectively, at about $13M each.

Just 40 of the 860,000 total paylines (0.005%) accounted for 10% of all payments.

click to enlarge (Top pay lines, entity X code)
Individual Providers and the 80,000-series Codes

The first individual provider on the pay line chart was a Memphis pathologist at line 132 with $3.9M for 87507, digestive tract pathogen.  The second individual provider was line 189 for 80307, testing for presence of drug, $2.9M.   The highest individual pay line for surg path (and it might represent some kind of group practice?) was line 257 with a Baltimore pathologist and $2.2M for 88305 x 34,000 units (surg path).


Sorting the 860,000 lines by self-reported gender, lines 1-475990 are male, and lines 475991-778211 are female, a ratio of about 60:40.  But the average male pay line was $3,586 and the average female pay line was $2476. 


Six entities garnered between $1M and $4M for immunohistochemistry 88432 (first slide of case).  Interestingly, only 3 entities billed over $1M for 88341 (additional IHC slides), with only 3-7 average slides per case.   Only a handful of higher-billing providers of 88341 billed >10 slides per bene, but one provider billed ~5000 slides for 26 bene's (~200 slides per bene) using 88341, which is difficult to understand.

About ten providers had $100,000-$500,000 in payments for 88344 (multiplex IHC slides).

All About Arsenic Testing

Something - old Columbo episodes? - triggered my interest in arsenic testing (81275).

CMS paid for 21,276 units of arsenic testing at about 100 labs, and almost never more than once per patient.  Payment per test is $26.   Arsenic testing is highly concentrated, with LabCorp NC receiving $104,000, Genova Dx receiving $85,000, and Unilab receiving $27,000.  This 19%, 16%, and 5%, or 40% of all US testing.   Total payments were $544,092.   For this test, Labcorp billed from 13 locations and Quest from 17.  However, 68% of Labcorp billings were from NC.  No Quest location had more than 20% of testing.  Labcorp garnered $154,000 from arsenic testing and Quest $108,000, together holding almost exactly 50% of the arsenic marketplace in the >65 population.

81275 and Old Lace

Very Brief Blog: This Year's Part B and Outpatient Annual Rulemaking: How Late Are They?

Each summer, CMS releases two large packages of proposed rules and policies and pricing for the coming year: the "Physician Fee Schedule Rule" (which includes Part B policies like lab tests) and the "Outpatient Rule" (which includes surgical and non-surgical hospital outpatient services and ASCs.)

Having tracked these rules for 15 years, I usually say they come out July 1, plus or minus five days.  

Let's reset our expectations to mid-July.  In the last four years, these rules have come out between July 8 and 13.  This year, 2019, it's July 15 and they're not out yet, so it's going to be even later than the recent norm. 

When the rules are issued, there are 60 days public comment, and the rules are finalized by November 1.   This means that the later the rules come out in July, the further into September the comment deadline runs, and the fewer weeks CMS has left to turnaround the revised and final rules during October.  

Here are recent dates for first release "inspection copy" rules:
  • July 8, 2015 (for CY2016).  Here.
  • July 8, 2016 (for CY2017).  Here.
  • July 13, 2017 (for CY2018).  Here.
  • July 12, 2018 (for CY2019).  Here.
Where To Look It Up Yourself

Federal Register has a dedicated webpage for each agency, the one for CMS is here.  This webpage shows both recent published Federal Register rules and the latest "inspection copy" rules, a typed version which appears ahead of the typeset Federal Register version. 


Often it is rumored CMS releases rules on Friday nights.  While CMS does definitely save some items for Friday night releases, only the July 8, 2016 rule was  Friday night, of the four examples here.

Very Brief Blog: Dark Daily Highlights Pathologist's Role in Nixing Theranos

In a July 15, 2019, article, the open access site Dark Daily, related to trade journal Dark Report, highlights the role of pathologist Adam Clapper in bringing down the Theranos juggernaut several years ago.

The pathologist, who at the time ran Pathology Blawg, was skeptical of a favorable New Yorker article published in December 2014.
  • See the July 2019 Dark Daily article here.
  • The Dark article builds on an April 2019 Missouri newspaper article here.

The "Discoveries" Theranos Webpage: December 2014 to December 2016

Beginning at the same time, in December 2014, this blog Discoveries began a single multi hundred link blog on Theranos.  That blog page was continuously updated for several years to track the rise and fall of the Theranos story - and it's still online here.

The timeline is remarkable.  I googled backwards to provide internet links on Theranos starting in 2006.  But the main saga runs from December 2014 (the New Yorker article), to October 2015 (the landmark WSJ article), to December 2016, when it was clear that Theranos was kaput.  I stopped updating the website once it was clear that Theranos was doomed.


The Discoveries blog runs 10,000 words and circa 500 links.

Wednesday, July 10, 2019

Very Brief Blog: CMS Posts Agenda for July 22-23, 2019, Lab Advisory Panel

Each summer, CMS hosts a panel of experts to discuss how it should price new laboratory codes, and the panel may be asked to discuss additional topics as well.

This year, the Clinical Diagnostic Laboratory Test (CDLT) panel will meet at CMS on July 22-23.
  • Home page for the panel is here.
  • Specific agenda for July 22-23 is here.
    • The panel will discussed about 90 codes, arranged thematically (e.g. microbiology, NGS, etc).
    • In addition to new codes, CMS asks the panel to discuss automated chemistry panel pricing.
Registration closed July 1 but the panel will be webcast (see agenda for links).

If you want a preview of what these panels are like, how the debate sounds, see my online transcripts from July 2018 summer advisory panel, here.

Foreign Nationals

CMS doesn't always make its special rules for foreign nationals clear.  It added a page of instructions to this agenda, which I've clipped on a separate webpage here.  Foreign nationals have to go through a special process starting about two weeks before a CMS site visit.

Monday, July 8, 2019

Last Date to Comment to CMS re CLFS 2020 Pricing: I Commented on Posting Meeting Video

Today is the last day (day 14) to comment to CMS on pricing of new 2020 lab codes, relative to the public meeting held at CMS at Baltimore on June 24.

CMS requested comment on any of the 90 new codes presented, the several codes under appeal, and comment on how CMS should handle automated lab chemistry panel pricing, which was a special topic appended to end-of-day.

Comments go to a common mailbox at .

CMS Should Post & Archive the Live-Streamed Video

Let me mention I also submitted a comment specifically asking that CMS, which webstreams the meeting on YouTube, should ALSO archive the video on YouTube. 

CMS did this in 2016 and 2017, but not 2018, and I don't know if they will archive the meeting video now in June 2019.  I hope they do.   An example of a past-year archived video is here.

Action Point

If you agree, you could email CMS a short comment asking them to YouTube-archive CLFS meetings, as they used to do. 

I provide reasons below in a copy of my letter to them.   If you agree, sending even a one or two sentence comment on this point to CMS may help.

(Comments requested by July 08).

To: CMS CLFS_Annual_Public_Meeting < >

Dear CMS Staff:

Thank you for the excellent organization of one of the largest CLFS public comment meetings, on June 24.

I strongly favor the practice in 2016 and 2017 of both streaming the CLFS meeting and also storing it as archived video on the CMS Youtube Channel.   

In 2018, for the first time, the meeting was live streamed but was not stored as archived video.

Storing as archived video has many advantages.  Some other CMS meetings are definitely stored that way.   New participants - which are common with new PLA codes - can look back to a recent meeting and understand the style and method of good presentations and improve theirs.   Different stakeholders can learn from one another.   Parties with a special interest in special types of codes - like infectious disease - can track only those sessions and do not need to commit to flying to Baltimore for just a few five minute presentations.   If CMS has issued preferences or instructions, people can confirm that they have understood them correctly.

In the past, I found the 2016 and 2017 archived video of both CLFS Public Comment and CDLT Advisory Board sessions to be very helpful.   Otherwise, a lot of information is lost or misunderstood.   

I hope CMS can archive online the June 24 CLFS presentation and the July presentations.

Thank you very much.

Bruce Quinn MD PhD
Bruce Quinn Associates LLC
Los Angeles and San Francisco

Sunday, July 7, 2019

Very Brief Blog: NCD Catch-up: New NCD Analysis for Acupuncture due July 15, 2019

Update July 15.  CMS posted a proposed decision covering acupunture for lower back pain under clinical trials only (CED), here.  Trade journal here.  CMS press release includes quotes from Alex Azar here.

Here's one I missed first time around.

On July 2, 2019, the Washington Post ran an article that Medicare was reviewing evidence for acupuncture, and will release a draft coverage position on July 15.

The backstory.  With the opioid crisis, there's new attention to non-opioid methods of pain control.  Acupuncture would be one, but for years (decades?) CMS has had an NCD stating that acupuncture was a non covered services - not reasonable and necessary.

The tracking sheet for the 2019 NCD review is here.  The topic was opened for new comment in January 2019, expecting a revised position in July and a final position in October.  The request was "internally generated," but it's likely that advocates for acupuncture raised visibility on the issue with CMS in light of the opioid crisis.  This NCD reopening focuses on acupuncture in the context of chronic lower back pain.

It looks to me like one of the last visits by CMS to this topic was acupuncture for fibromyalgia (not covered) in 2003.  Here.  See NCDs 30.3, 30.3.1.

There have been several annual rulemakings in the past couple years where CMS has publicly asked if it was doing enough, or doing the right things, for opioid management and control of overuse.

CMS doesn't have a benefit category for acupuncturists, so at least in the short term it would only be covered by physicians, nurse practitioners, etc, or incident-to a physician (performed in the same office when the physician is there).

A quick scan of the comments page suggests CMS received around 500 comment in January 2019.

Tuesday, July 2, 2019

PAC CARB Posts Draft US 5 Year Plan for Antibiotic Resistance; Calendars Meeting

In 2015, the Obama administration announced an organized five-year plan for fighting antibiotic resistance.   It also created a President's Advisory Council on antibiotic resistance. 

The Trump administration is now in the midst of publishing a new five-year plan for 2020-2025.

On July 10-11, 2019, the PAC CARB will hold a public meeting.   On the first day, PAC CARB will discuss and take comments on the draft 5-year plan, recently released on its website.   On the second day, I was intrigued to see that most of the day is devoted to provider behavior issues, which are indeed pivotal to the overuse of antibiotics.

Organizations like the United Nations have been emphasizing the antibiotics public health crisis, and it was recently featured as the cover of Newsweek.   A recent publication in Mayo Clinic Proceedings referred to antibiotics overuse as "a slow motion catastrophe." 

PAC CARB is taking comments on the five-year plan through July 2 midnight, in preparation for the July 10 meeting.  However, they are also taking public comments at the meeting and I believe they will consider comments after July 2, they just won't have time to publish them for the panelists meeting book.

As in 2015-2020, Goal 3 of the five year plan is entirely focused on antibiotics.  Reimbursement issues are noted; PAMA is noted in a footnote.

  • PAC CARB home page here.
  • PAC CARB website for July 10-11 here.
  • Draft five-year action plan here (92pp).
    • S. Bill 1379, here, this reauthorizes PAC CARB (part 505) but also includes extensive information and funding lines for many antibiotics and biodefense issues (e.g. find BARDA funding here).
  • April 2019 U.N. announcements here.
  • Mayo Clinic Proceedings, Lesho & Laguio-Vila, antimicrobial resistance as "slow motion catastrophe," open access, here.
In the 2015-2020 plan, CMS was supposed to institute Antibiotic Stewardship Program rules for both long term care and acute care (hospital) settings.  The hospital rule was delayed and nearly expired, but CMS just gave itself another year to complete the hospital rulemaking (here).  PAC CARB's expert panel had unanimously petitioned HHS for this action in April 2019.  CDC, IDSA, and Pew Foundation are all very active in antibiotic stewardship issues so it is nice to see CMS making an effort to keep up.

As part of World Antibiotic Awareness Week 2018, Biomerieux published an interesting roadmap of the pathway of care and where diagnostics help intervene wisely.  While this is specific to Biomerieux product lines, the concept is an interesting one.  It's designed in the pattern of a subway map.


Further Reading.

See Chastain et al. (2019), A Baker's Dozen Top ASP Intervention Publications in 2017, open access, here.    For one of the best articles on hospital decision making anywhere (it's a hospital MBA-in-a-box), see Spellberg et al., 2016, Pitching ASP to the C-Suite, here.

Sunday, June 30, 2019

Brief Blog: Is the Boom in ADLT's About to Start?

Recently on the YouTube channel Machine Thinking, I ran across this illustration:

...making the point that hockey-stick phenomena in technology weren't invented in the 1980s.

It's a kickoff for asking, will we see a hockey-stick uptick in ADLT applications at CMS?
  • One lonely ADLT was approved in May 2018, then one more in December 2018, but three ADLTs just in the last few weeks.  
  • And several more ADLTs were described as being underway last week, at a CMS pricing meeting.   
  • So it looks like ADLT codes - like rabbits or bactgeria - may have a rapid "doubling time" at this point.

What Are ADLT Codes?

The PAMA lab repricing act of 2014 created Advanced Diagnostic Laboratory Tests, which are always sole-source tests.  They may be (A) of the MAAA type or (B) they may be sole-source FDA cleared or approved tests.   If they are new tests, they can be ADLTs if they meet the category rules and if they are covered by Medicare.  If so, they get a year of pricing at their market rate followed by annual price re-sets to the current median payment rate. 

CMS has a webpage for ADLT policy here.   Currently, there are 3 PDF attachments on the web page.  These are a list of current ADLTs (here), a 17-page application form here, and a 30-page rules guide here.

I pointed out in 2018 the ADLT rules give a lot of latitude for game-playing particularly in the Year 1-2 transition (here).

Five ADLTs Already, More Coming

There are five ADLTs now, with CMS payment amounts ranging from $3,500 to $7,193:

click to enlarge
At a June 24, 2019 CMS public meeting on pricing some 90 new codes for CY2020, several labs made their presentation primarily to simply remark that the code in question was in the ADLT process and would probably be priced by ADLT rules, not the administrative crosswalk/gapfill process.  For example, Myriad had a code in this category.

The lab with the currently highest-ranked ADLT code, Castle Biosciences (for Decision-DX Melanoma), announced on June 26 it plans a summer IPO (here).

ADLT Prices Update Annually, but Lag

ADLT pricing rules are found in CMS's 30-page guidance, especially page 27-28 (here).   For a new ADLT in mid 2018, its price collection, price reporting, and new-price dates follow the PAMA cycle (here, January-June 2019 for price collection, January-March 2020 for price reporting, and new price effective for January 2021.)   For an ADLT, though, the pricing cycle begins anew every year, so while this lab is reporting its January-June 2019 prices in January-March 2020, it is also collecting new prices for January-June 2020 which it will report in January-March 2021 for the price year CY2022. 

This appears to give labs a lot of incentive to appeal lower-than-median payments during the price collection period so there is no firm lower-than-median and finalized price payment that falls fully within the catchment period (thus only higher paid prices for finalized claims need be reported in the reporting period).  As CMS states, 30 page document page 16, "Private payor rates (and the associated volume of tests) for laboratory test claims under appeal are included as applicable information if the final payment amount is determined and paid by the private payor during the data collection period." 

Very Brief Blog: Three Genomics IPO S1s in One Zip

When companies announce planned IPOs, it's easy to find the trade press, and when the IPO occurs, it gets a lot of press again.

Most news articles don't link to the actual SEC filing documents, especially the content- and strategy-rich S-1 document.  I've provided one zip file cloud link below. 

There have recently been three IPO plans announced in genomics - Adaptive Biotechnologies on May 31, aiming to raise $300M, Personalis on June 12, aiming to raise $100-150M, and Castle Biosciences, June 26, aiming to raise $58M.

The S-1 documents tally 271pp, 220pp, and 203pp, respectively.   Adaptive had its IPO on Thursday June 28, and its stock popped from $20 to $40, ending the day with a market cap circa $6B.

Link Here

Find the three IPO S-1 documents in one cloud Zip file, here.   That's 694 pages of July beach reading.

Representative trade press - Adaptive here, Personalis here, Castle here.  Last winter, Castle picked up for its Board of Directors the CFO of Genomic Health.

Friday, June 28, 2019

Very Brief Blog: CMS Publishes Updated Roster for Lab Advisory Panel

On June 28, 2019, many of us were waiting into Friday evening to see if CMS would publish its annual proposed rules for Hospital Outpatient or Physician Services.  It didn't.   (CMS may wait til Wednesday night, July 3...)

However, we were rewarding with the posting of new members of the CMS advisory lab panel, aka the CDLT Advisory Panel. 

See the regular CMS website here.  See the website for the July 22-23 2019 meeting, here.  (Registration due by July 1 for in person attendance). 

For the publication on the new CDLT Panel Members, see 84 Fed Reg 31070-71, here.

New members are:

  • Maria Arcila MD, Sloan-Kettering
  • Karen Carroll MD, IDSA
  • Lydia Contis MD, Univ. Pittsburgh
  • Elizabeth Harris MD, Humana
  • Kevin Krock PhD, Precision Diagnostics
  • Elaine Lyon PhD, AMP
  • Healther Shappell MS, CGC (NSGC)
Ongoing panelists include:
  • Vickie Baselski PhD, ASM
  • Aaron Bossler MD PhD, AMP
  • Pranil Chandra DO, AMP
  • William Clarke, PhD MBA, AACC
  • Stanley Hamilton MD, CAP
  • Kimberley Hanson MD, IDSA
  • Michele Schoonmaker PhD, AMTA
Rotating off ("or will expire in 2019") are Geoffrey Baird MD, Seattle Children's, Raju Kuperchalati, C21M, Bryan Loy MD MBA, Humana, Gail Marcus PhD MBA "self nomination," Carl Morrison MD DVM (US Congress, Roswell Park), and Rebecca Sutphen MD "self nomination."


Here's what CMS says in brief about the panel:

Section 1834A(f)(1) of the Act directs
the Secretary of the Department of
Health and Human Services (the
Secretary) to consult with an expert
outside advisory panel established by
the Secretary, composed of an
appropriate selection of individuals
with expertise in issues related to
clinical diagnostic laboratory tests.
Individuals may include molecular
pathologists, researchers, and
individuals with expertise in laboratory
science or health economics.

The CDLT Panel will provide
information and recommendations to
the Secretary and the Administrator of
the Center for Medicare & Medicaid
Services (CMS), on the following:

• The establishment of payment rates
under section 1834A of the Act for new
Clinical Diagnostic Laboratory Tests
(CDLTs), including whether to use
‘‘cross walking’’ or ‘‘gap filling’’
processes to determine payment for a
specific new test;
• The factors used in determining
coverage and payment processes for
new CDLTs; and
• Other aspects of the new payment
system under section 1834A of the Act. 

Very Brief Blog: Original Sources for Surprise Billing aka Out of Network Legislation

The last few weeks there has been a flurry of bicameral (and bipartisan) movement on health legislation, with a showpiece topic being surprise-billing legislation.   

Politicians and consumers don't want to be hit with $20,000 anesthesiologist bills out of network - especially when the next guy would be $1000 in-network.  But, the legislation can be thorny in that it imposes pricing rules or price caps that can seem arbitrary or unfair.  (To parody an old bit of doggerel about taxation: "Don't price cap-you, don't price-cap me: Price-cap that guy behind the tree.")

In addition, putting pricing rules or caps on out-of-network services can affect the way the next round of de novo in- and out-of-network negotiations between providers and insurers play out (aka game theory with new rules of the game.)   (For example, what doc would negotiate to an in network office visit at 80% Medicare with a 30% copay if the new law acted to fix payments to out-of-network providers at 125% Medicare and a 15% copay?)

Lab Industry Too

The implications may be large for the lab industry, since a lot of lab claims may fall into out-of-network status.  There could also be requirements that physicians not refer to out-of-network providers, or penalties for doing so, and these could now come from law, rather than from local contracts and conventions.

Note, too, that from a P.R. perspective, one of the landmark media events in out of network billing was about a laboratory (the surprise bill was $17,000), a story that broke in February (e.g. NPR) and featured May 9 in a Presidential press conference May 9.

Potpourri of Hearings

The House has focused two hearings specifically on surprise-billing legislation, with a 22 page draft bill HR861.

Meanwhile, the Senate has a multi-dimensional, 196-page health care bill which passed out of the HELP committee on June 26.  In S.1895, the first 20 pages or so are a surprise-billing law.

See a Zip file of the May 21 House Ways and Means testimony, here.  Website here.

See a Zip file of the June 12 House Energy and Commerce testimony, here.  This includes the 22-page draft bill.  Website here.

See a Zip file of the June 18 Senate HELP hearing, here.  This includes the 196-page S.1895 bill as voted out of committee June 26 (on that, see Kaiser Health News, here.)  Website here.

No, No, No!

Numerous health provider groups testified or submitted statements against the bills, generally liking the principle but not the execution.  For example, see the College of American Pathologist's six-page June 18 statement to HELP here"An inequitable payment formulate that would enrich health plans while undermining the economic viability of health care delivery...creating a clear economic incentive for health plans to further narrow their physician networks."

Who Spoke

At a glance, speakers with PDFs in the above ZIP files include:

May 21 W&M: AMA, AHA, AHIP, ERISA Industry Commitee [aka large employers, self-insured]

June 12 E&C: ERISA Industry, Amer Coll Emerg Physicians ACEP, FamiliesUSA, AHA, AAMS (Air Ambulance), AHIP, Physicians for Fair Coverage.

June 18 Senate HELP:  Montana Insurance Regulator, Aledade, American Enterprise Institute, Families USA, Pacific Business Group on Health, AHA.

If you work through the twenty or so PDFs from the various hearings, they clearly sort into two piles, payer side (AHIP, Pacific Business Group, ERIC or ERISA stakeholders), and provider side (AMA, AHA, etc).   Everybody starts by saying that surprise bills are bad, and patients should be protected by having only normal copays.  (Note that once patients are fixed to have  normal copays, the patient himself no longer has an incentive to be in or out of network!)   But then the debate is whether what IS paid, which is from an insurer since not from a patient, is paid at WHAT rate.   For example, will it be a binding arbitration rate, or 125% of Medicare, or median of that payer's contracts, or median of state database contracts, etc. 

Another feature is that there are already some state laws in this area - California and New York and Texas being three of them - and there are grand arguments about pro's and con's in these comment letters.

One term of art to learn is "baseball arbitration" which means an arbitration where each party proposes a price and the arbitrator chooses the most reasonable one.  In theory, this means no participant will bid crazy low or crazy high because the arbitrator will just circular-file it.


Sean Cavanaugh spoke for Aledade, which works with primary care physicians in ACO environments; he was formerly Deputy Director of CMS CCMI and Director of CM, the Center for Medicare at CMS.

DJT: May 9, June 24.  President Trump's June 24 executive order focuses on price transparency per se but includes a request that HHS work on better rules and regulations for surprise billing, separate from the particular legislative efforts discussed above.  Here.  (Stating, "Within 180 days of the date of this order, the Secretary of Health and Human Services shall submit a report to the President on additional steps my Administration may take to implement the principles on surprise medical billing announced on May 9, 2019.")  The May 9 event was 40 minutes, 7200 words, although the second half merged into a wide-ranging press conference.

The May 9 speech remarks, "In my state of the Union address, I asked Congress to pass legislation to protect American patients.  For too long, surprise billing has been a tremendous problem in this country..."   I didn't see a specific reference to the idea of surprise billing in the SOTU 2019, though there was a sentence about price transparency in general.

The May 9 WH event contains the famous example of a doctor (Paul Davis) whose family member got a $17,850 bill for a $20 urine tox screen, which was an NPR story a few months early (here; it includes the bill.)

Continuing my frequent point that this administration flags its core interests multiple times and long in advance, CMS even included an RFI re out of network surprise billing in its May 7, 2018, inpatient rulemaking - a full year ago.  Here

Thursday, June 27, 2019

Very Brief Blog: Adaptive Biotechnologies IPO Priced at $20, Spikes to $40

Adaptive Biotechnologies announced its pending IPO a couple weeks ago, and yesterday announced an expected opening price of $20, planning to raise $300M.

After the opening bell June 27, share priced spiked as high as $40.

For a CNBC video today with CEO Chad Robins, here.  For today's IPO trade news, here and here.  CNBC ran a good story in the afternoon which discusses Microsoft's collaboration with Adaptive, here.  Per CNBC, the value of Microsoft's direct investment quadrupled in 18 months. 

The next day, on June 28, MarketWatch ran a short interview with Robins, here.  On Day 2, ADPT opened at $41 and rose to $48.

The Seattle Times had said the $20 IPO would value the company at $2.5B; at double the share price, it suggests the valuation is $5B.

The May 30 S-1 is here; I haven't checked if a slightly updated one exists.

In an open-access article by Cristea/Cahan/Ioannidis in January 2019, many life sci companies with billion-dollar valuations (unicorns) were criticized for thin publication histories, but Adaptive's publication roster was extensive and in a class of its own - here.  Adaptive had 89 publications.

Tuesday, June 25, 2019

What Does the June 24 Executive Order on Price Transparency Actually Say?

Both the pre-publicity and most of the news items on the June 24, 2019 Executive Order on price transparency talked about "an executive order that will make doctors and hospitals publish their prices."    This made no sense - clearly, an Executive Order can't do this, no matter how many journalists say so. 

Rather, the actual Executive Order is couched in request language - requesting HHS to do this, that, or something else, if it is possible, over some period of 90 or 180 days or longer.   Very few of the major journalistic sources on the E.O. actually linked to the White House document itself.  Once you get there, it's interesting. 

It's also part of a wide Republican effort to take new approaches to health reform, and if you find the right sources, there's a lot of content there.  (See my May blog at LinkedIn on two recent and detail-packed Republican speeches here).   This Republican content is rarely elevated and summarized well.   Fox News doesn't do it, probably lacking the appetite for detail, and NYT and WaPo don't, either.   Nor can you turn to the health policy literature:  I was particularly struck a few days ago by a very poor summary of Republican plans inside a review article on Health Reform at the Annals of Internal Medicine (here). 

It's not at all easy to get a good simultaneous overview of the 120-page HHS policy blueprint of 2018, a good overview of the new May 2019 Senate legislative language at 165-pages, or even a real grasp of the 1500-word June 24 E.O. from our major media or trade journal sources.

Mainstream Coverage of June 24 Executive Order

  • New York Times published main article here, and a sidebar article that price transparency might actually raise prices here.  (See also FN 0).  I don't think either NYT article linked to the actual June 24 E.O.
  • The WSJ article of June 24, here, after the order was signed, didn't link to it, and chained backwards to an earlier article June 20 here and that chained to an earlier article May 24.
    • However, by June 26, WSJ came up with a quite interesting article comparing to a NH state effort on pricing transparency, here
  • Washington Post main article here.  They did a pretty good job of explaining that the E.O. will only lead to intended and proposed rules over time.
  • CNN main article here. No E.O. links.
  • Kaiser Family Foundation had a detailed article, with several interesting links, but did not link to the E.O. itself.  Here.  
    • KFF did link to the May 10, 2019 Final Rule re: DTC on TV prices of drugs. This is effective July 9, 2019, and effectuates a rule proposed in October 2018.
  • Healthcare Dive has a second-day, longer article and does link to the E.O., here.
  • The Fox News main article here doesn't seem to link to the E.O., but Fox's Andrew O'Reilly is actually more accurate than some other sources, clearly describing the E.O. as a request that various agencies engage in rulemaking over the coming year [see very clear text at FN1].
  • Looking back a couple weeks, there had been a short flurry of articles about the pending E.O. around May 24-30.  See WaPo here, CNN here.  

The Actual Executive Order

The actual E.O. is online here at the White House.  It's called "Improving Price and Quality Transparency in American Healthcare to Put Patients First."    Now you've got a link to it.

It's a direct descendant of the October 12, 2017, E.O. called "Promoting Healthcare Choice and Competition Across the United States."   And the October 2017 E.O. #13813 led directly to a very detailed HHS blueprint called, "Reforming Healthcare through Choice and Competition," clocking in at 120 pages, here.

These documents, in particularly the June 24 one, actually have a lot of content.  Passages of the June 24 E.O. read like policy wonks writing for policy wonks (it's impossible to imagine the President quoting some of the sentences, for example).

And on the other hand, some passages in the 1500-word E.O. are pretty prosaic (FN2).

See also the President's spoken remarks here.  These ran 20 minutes and about 3200 words (including a few brief guest speakeres).  The transcript includes a paragraph by guest health economist Prof. Larry Van Horn of Vanderbilt.

In parallel, CMS administrator Seema Verma (who attended the signing along with HHS head Alex Azar) issued a brief supportive statement.

Smoke Signals Well in Advance

A lot of this gets flagged in advance if you know where to look, such as a March 4 speech by senior White House advisor Joe Grogan to a hospital association; I made a full length transcript with annotations here.  Grogan pointed his audience to the 120 page HHS document cited above as being a continuing key guidance for executive branch plans, for example.  And his remarks from March 2019 clearly point forward to later Administration actions in May and June 2019.   (Short notes, with links, at LinkedIn here.)

The Senate Republican Proposals for Healthcare Reform

  • On June 26, 2019, the Senate HELP committee passed a 196-page version of the LHCC Act, text here, S. 1895, stories at KHN here and NYT here.  My blog here.

In late May, a set of Republican proposes from the Senate largely got lost in news that they would reduce "surprise billing" in emergency rooms and the like.   That's part of it, but there's a lot more in the Senate proposals, including many passages about generic biologicals/biosimilars law [Fn3] and things like all payer claims databases. 

See a trade journal news article about the Senate plans (with numerous links) here.  See the American College of Physician's 16 page response, June 5, here.  See my highlighted version of the Senate legislative summary in the cloud here.   See the 165 draft Senate document in full, hereUpdate: SEE FINAL HERE. 

In announcing the Lowering Healthcare Costs Act (LHHC Act) in May, Sen. Alexander said it hoped it could be moved to the floor and finalized in law this summer (here).

All Payer Claims Database - Abbreviation APCD

There's a whole zone of policy focused on All Payer Claims Databases.   (If I recall correctly, during the 2008 economic crisis, one shovel-ready grant under ARRA was for APCD). 

The last I heard about APCD was the Supreme Court case that made them more difficult; Gobeille, 2016.  Here, here.   But the new legislative and E.O. efforts aim to circumvent what are seen as impediments raised by Gobeille.

People tweet about APCD (for example here and here).  There's an APCD Council here.  The National Council of State Legislatures has a highly informative webpage devoted to APCD here.   AHRQ has a webpage for APCD too, here.  There's a growing PubMed literature (Garvin et al., 2019, here.)   Anthem has an 18 page white paper on APCD here.

Surprise Billing

The EO contains a paragraph about surprise billing, which in turns refers backwards six weeks to a separate WH event on surprise billing.  See FN2.  Of course, May and June were full of bicameral Hill events on surprise billing; here.

Strategic Comment

Some of the Republican health ideas are fairly straightforward to implement, and unlike say Medicare-for-All (M4A), fairly hard to argue against.   The Senate LHHC bill was supported by Ranking Member Murray (D-WA).   It's going to be hard for Dem's in the House or on the campaign trail to argue against price transparency or against surprise billing controls.   Al Franken exploited this strategic scenario in a 1999 book (FN4).

In conclusion, I'd recommended reading the actual several-page June 24 E.O. here and looking at the 3-page summary of the 165-page Senate legislation, here.



The NYT piece on transparency raising prices track to an academic article titled, "Government-assisted Oligopoly Coordination," here, a 1997 study of a Danish concrete manufacturers cartel.


Fox News accurately described what the June 24 E.O. triggers:

"The executive order calls for a rule-making process by federal agencies, which typically takes months or even years. The details of what information will have to be disclosed and how it will be made available to patients must be worked out as part of writing the regulations. That will involve a complex give-and-take with hospitals, insurers and others affected. Consumers will have to wait to see whether the results live up to the administration's promises."  Gold star for Fox; written by Andrew O'Reilly.

WaPo framed the slow roll-out this way:

"The order itself does not immediately trigger changes in the health-care system. But it sets in motion several new rules HHS and other federal agencies will write and gives Trump a set of pro-consumer talking points in the first week after he formally announced his reelection campaign.
In a media briefing before Trump signed the order, senior administration officials said they had not decided how much detail would be required about the negotiated rates and that such fine print would be left to the Department of Health and Human Services, which is instructed to write new rules to carry out this and other aspects of the order."


Representative of some of the lower-voltage passages from June 24 E.O.:

"Within 180 days of the date of this order, the Secretary of Health and Human Services shall submit a report to the President on additional steps my Administration may take to implement the principles on surprise medical billing announced May 9."  For the May 9 event, see here.  I'm not a political expert, but the pop-up May 9 WH event on Surprise Billing seems to just jump by a few days bicameral Hill efforts on surprise billing (here). 


Bach and Trusheim recently wrote about the doomed status of biosimilar competition, entry point here.   As Commissioner of FDA, and after, Scott Gottlieb talked about the problems of biosimilars competition, too.   The Senate 165-page draft bill contains many pages devoted to improvements in biosimilars law - as witness pages 31-64, they are trying to "get stuff done."


Al Franken, Why Not Me, 1999.  Here.  Franken's fictitious alter ego wins the 2000 presidential race by campaigning on a platform exclusively against high ATM fees.  All voters supported this, and no opponent could contradict it.  A platform of health reform primarily against surprise bills and for transparency follows a similar winning logic.


Other notes.

More Footnotes on Price Tranparency

There are a number of industry comments coming in to Senate re: price transparency.  Many cite a 2015 short blog by FTC (Koslov & Jex), that price transparency can support collusion, here.   However that blog links to a 15 page memo here and to a March 2014 two day workshop with transcripts here.

AHIP (health insurers) testified to Senate on June 18 against too much price transparency (here).  AHIP also has a one-pager here.  US Chamber of Commerce wrote CMS re Rule CMS 9115 P (interoperability) on June 3, 2019, against too much price transparency, here.

Prof. Zach Brown of U Mich on price transparency and health prices, Z.Y. Brown, 2018, here.  For more links, his home page here.

For an interview with signing participant, economist Van Horn, here.

A KFF article in January 2019 argued that just putting spreadsheets of hospital prices online is confusing and unhelpful, here.

Additional Sidebar Notes

On June 24, there was a Republican-focused Op Ed on health reform in The Hill, but it seems to have been written before the June 24 E.O.   Here.

I noted an Annals of Internal Medicine recent review article in the body of the blog; the authors Woolhandler and Himmelstein also have a May 31 (e)/June 25 (paper) op ed in JAMA, here.

Abe Sutton, who's a few years out of a Poli Sci/Econ degree at U Penn (in 2014 he was President of its Undergrad Assembly) via McKinsey, is Health Advisor for the Domestic Policy Council, here.

The President made several comments in his June 24 signing speech that he was very proud of Right to Try legislation and that it was good for patients.

The President closed his spoken remarks with:  "I’m going to go and sign the executive order.  And if this is half as big as some people are saying it will be, it will be one of the biggest things ever done in this world, in this industry, in this profession."

Friday, June 21, 2019

Very Brief Blog: CMS Posts Final Agenda for Annual New Lab Codes Pricing Meeting

Each summer, CMS holds a public meeting for comment on how it should price each of the new lab codes for the coming year (e.g. CY2020).   CMS has posted the final agenda for the Monday, June 24, 2019 meeting, with 40 public presentations calendared.  There are about 100 new codes in total, most of them PLA codes aka Proprietary Lab Analyses.  PLA codes are issued quarterly by AMA.

  • See the main CMS webpage here.
  • See what's new - the 3 page PDF of the final agenda - here.
  • See the Excel spreadsheet of all 95 individual codes by name - here.

The meeting begins at 9 and public presentations run to 345 pm with a lunch break.  CMS states that each presentation will be up to 10 minutes (I tally about 8m15s by dividing the time by the presentation list).


The meeting will be webcast on YouTube.  It's uncertain if it will also be archived.  The Summer 2017 meeting was both webcast and archived; the 2018 meeting only webcast.  See info on page 1 of the agenda.

Auto Chem Panel Policy

The day will close with a 15 minute presentation on "automated chemistry panel" policy 3:45-4:00 with "open dialogue" or discussion to 5:00 pm.  Parties may sign up early in the morning "if they would like to read a prepared statement."   CMS released change release 11248 on May 3, 2019, regarding "re-implementation" of certain edits related to chem panels (here).  The instruction is backdated effective to January 1, 2019, because CMS is implementing instructions it released as part of CY2019 CCI edits in November 2018.  For more on the panel pricing controversy, GAO report here.

Professional Laboratory Advisory Panel July 22-23, 2019

Note that CMS's panel of advisors on lab test pricing and policy will be meeting on July 22-23 to discuss the pricing of all these codes, too.  Here.

CMS releases draft prices around September 1, triggering a new comment period, and final prices by November.

Monday, June 10, 2019

Brief Blog: CMS Extends Expiration Date for Antibiotic Stewardship Rule

In June 2016, CMS proposed that all hospitals have Antibiotic Stewardship Committees meeting certain regulatory standards, as a Condition of Participation.   Like all CMS proposed rules, the rule would expire in 3 years (June 2019) if not finalized.   See contemporary 2016 coverage here.   See proposed rule here.

Some stakeholders in the antibiotics and public health committee have become increasingly concerned that the rule would expire without being finalized, the equivalent of a "pocket veto."  See press here and here.   The Presidential Advisory Council on antibiotics resistance held a special, rapid, off-cycle meeting on April 8, 2019, and all the experts voted unanimously to urge HHS to finalize the rule.  For my meeting report, links, and a transcript here.  Trade news here.


Inside Health Policy reports today that CMS will extend the deadline for consideration of this rulemaking by one year, until June 2020, because of its "complexity."   (Subscription; see headline here.)    CMS also noted that at least some stakeholders had originally (in 2016) asked CMS to delay implementation of the new policy.

Rulemaking was published in Federal Register, 84 FR 27069-70, on June 11, 2019.  Web page here, PDF rule here.

The announcement that the antibiotic stewardship rulemaking is deferred, not dumped, comes as the United Nations and others are working to raise awareness of the global antibiotics crisis.  Last week, as I was traveling through airports, I noticed that the cover story of Newsweek is the antibiotics crisis.


For a comparison of proposed 2016 CMS and Joint Committee standards, see:

Sunday, June 9, 2019

GRAIL Hires Amgen SVP Josh Ofman MD as Head of Strategy

On June 6, 2019, GRAIL announced it has hired Amgen SVP for Global Value, Access, Policy, Josh Ofman MD, as GRAIL's Chief of Corporate Strategy and External Affairs.  See the press release here.

Ofman spent 16 years at Amgen.  An internist, he holds an MD from UCI, his residency training at UCLA, and a master's from the School of Public Health at UCLA.  See his Linked In here.   See an 2018 interview with Ofman on the healthcare value of drugs here.

GRAIL also announced its current CEO has had to step down for family reasons and the new CEO will be board member Hans Bishop.  Bishop was CEO of Juno Therapeutics, which Celgene acquired for $9B in 2018.   See Stat here,  Fierce Biotech here.

A Fierce Biotech article re GRAIL data from ASCO 2019 is here. A StatPlus article on GRAIL from ASCO is here.

Friday, June 7, 2019

MolDx to Hold National Workshop on Pharmacogenomics for Medicare; June 26, 1-4 ET

Under new 2019 rules, MACs are encouraged to hold Contractor Advisory Committee or CAC panels on topics of upcoming policy interest, and featuring guest expert speakers.   The meetings are available for webinar viewing by the public, and will be archived along with transcripts. 

(If anyone thinks these sound more like CMS MEDCAC meetings, you're right.)

The MolDX MACs will hold a national CAC webinar meeting on Wednesday, June 26, 2019, from 1-4 pm ET, on the topic of pharmacogenomics.   Potentially, if I understand the rules, non-MolDx MACs would have the opportunity to co-sponsor the meeting if they want to.

A more complete agenda will be posted by June 12, and registration must be completed by June 19.

It's unclear from the announcement if the focus will be on psychiatric PGx gene panels or PGx clinical utility in general.

Find the webpage here:

I've also cut and pasted the Palmetto below the break but you need to see the live link above for the most current information and updates.


See another web page with more info here:

See a draft question list for panelists, here:$File/Tentative_Questions_for_the_Multijurisdictional_CAC_Meeting_Regarding_Pharmacogenomics.pdf

Tuesday, June 4, 2019

Very Brief Blog: Entry Points to Patent Law Reform and Genomics

In the wake of several Supreme Court cases on diagnostic test patents five years ago or longer, there is now a flurry of Hill interest in patent law reform. 

This appears to be a highly polarizing topic, with (A) proponents saying some patents are necessary to support investment and commercialization (without instant copycats), while (B) others say gene patenting is fundamentally wrong and also inhibits innovation. 

See a 2019 blog on investments and patents in diagnostics here and the underlying original article here (which is 94pp; Taylor; Cardozo law review journal).

The Hill is considering draft legislation and will hold hearings in early June.  The legal changes wouldn't be specific to genetics, but would have a significant impact on genomics patent law.  The draft bill just adds a few sentences to existing patent law, but they impact on a large number of stacked and intersecting court cases and case law.

I'll provide some entry points to this complex area.  Senate hearings are June 4, June 5, June 11 in the intellectual property subcommittee of the judiciary committee.
  • Genomeweb overview on June 4; I believe open access, here.
  • At Patent Docs, the frequently quoted patent attorney Kevin Noonan is pro-change, he has two recent open blogs with many hyperlinks,
    • Overview, May 23, here.
    • Positioning vis-a-vis ACLU, June 3, here.
  • Washington Post, June 3, (suspicious of reform; probably firewall), here.
  • Science, June 4, here.
  • ACLU, June 3, here.