Friday, July 19, 2019

Myriad Settles OIG Investigation for $9M

On July 19, 2018, it was reported that Myriad entered an OIG settlement for $9.1M.   Myriad remarked it felt the charges were incorrect, but that the settlement would avoid a protracted litigation.
  • The issue was initially reported in March 2018.  Here.
  • Genomeweb today, July 19, here.
  • Myriad brief filing at SEC, here.
  • Myriad stock chart, here.
  • Myriad payments by code, online at CMS, 2014-2017 Excel in cloud here.
Myriad's stock popped from about $27 to about $29, about 7%, reflecting a market cap bump of about $140M (current market cap circa $2B.)   This suggests that consensus expectations during the period of uncertainty were more negative than the actual resolution was.

While Myriad's SEC filing is very brief (7 sentences, 138 words), a few notes.
  • The case was a qui tam case (e.g. filed by an individual with knowledge of Myriad billing on behalf of the government.)
  • Qui tam filing started in October 2017.
  • This led to an OIG subpoena, in February 2018.
  • It's about Medicare billing for hereditary cancer (not e.g. about Assurex or Prolaris.)
  • Company believes key allegations were false.
  • DOJ declined to intervene in the case.
  • Settled for $9.1M.
    • (In a $9.1M case, the qui tam relator might net 10% or $900,000 [?] )
    • ($9.1M would otherwise also buy 18,000 law firm hours at $500/hr).
    • (A settlement is largely closed-doors, full litigation far more public.)
  • Filed in District of South Carolina (not Utah where Myriad is located or North Dakota where Noridian processes its Medicare claims).
    • (Some screen shots from the District of SC settlement 3:17-cv-02945-JFA at bottom).

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Screen Shots USDC SC 3:17-cv-029145-JFA . 

Online documents include, among others, Dr. Jeter's original 24-page complaint about coding choices 10/31/2017.

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Thursday, July 18, 2019

Treasury Defines Unusual Category of Quasi-Preventive Service for High Deductible Plans

We've had high deductible plans for years now, and in order to have a large health savings account (shielding as much as $8000 per year from your taxes), the IRS enforces some firm rules on the plan.

Specifically, the plan MUST require a high deductible, meaning the plan is handcuffed and CAN'T pay for services before the deductible is met.  (With exceptions for limited types of preventive care, like mammograms, which have no copay or deductible).

The Trump Administration just issued a new I.R.S. advisory which creates a new category of what I have to call "quasi preventive" services, which include statins, insulin, and SSRI drugs.   The new ruling allows a high-deductible plan to pay for this limited palette of services, from day 1 each year, without applying a deductible or copay to them.   This is at the option of the plan; it becomes a point of flexibility in plan design.

The fixed palette of new "quasi preventive" (meaning no copay, no deductible) services are shown in the following table.   Treasury says it hopes to update the list every 5-10 years to ensure stability of the category.

click to enlarge

Source Materials
  • New IRS Policy 2019-45, here.
  • Trade press at Health Leaders, here.   Dive Healthcare here.  MedCity here.
  • Trade press at Forbes, here.  American Hospital Association here.
  • Treasury press release here.
  • IRS press release here.
  • Sens. Thune, Carper (R-SD, D-Del) thank administration, here.

Policy 2019-45 contains a detailed review of previous and parallel policy and how the new one fits in.


It's a little confusing to call these Preventive Benefits.  The point is to create plan design flexibility to allow the high deductible plan to pay for statins or insulin from day 1, if it wants to, rather than being handcuffed to putting these medical services into debiting the patient's HSA.  And what are the things a plan can pay, in fact, has to pay, from day 1: preventive benefits, like mammography.

The concept of preventive benefits has always had some gray areas.  Mammography or a pap smear in a person with no signs and symptoms is clearly preventive.   On the other hand, smoking cessation therapy has been classified as preventive, I guess preventing emphysema and lung cancer, but it could also be therapy, e.g. treatment of nicotine addiction.  No one has argued that dialysis is preventive, but if you have ESRD, it's preventive of going into a coma and dying.  After a car accident, a tourniquet is preventive of bleeding to death...  But I've also used the example that insulin injections may prevent a diabetic from going into a seizure or coma, but insulin medication "isn't preventive."  Here, per the IRS, insulin is on a list of elective preventive services.   It will be a little bit confusing but the IRS medical services above are a special set of services specific only to the world of HSA debit decisions.  Don't look for treatments like statins or insulin to show up on a USPSTF list of "preventive" services rather than treatments.

IRS says the list will be for services that are low cost, likely to prevent exacerbation of a condition, and highly cost-efficient.

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
Entities at Lower End of Net Revenue in CY2017

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.

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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).  Net-net, FMI garnered only $700,000 on its home court in Massachusetts, but at the Palmetto MAC, in NC, it earned $6.2M:

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 Modest 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 all totals less than $10M out 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 $502.

Click to enlarge / 81445, 81455

Lab Industry in General: The Full Set of all 80,000-series Codes

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).

If you are a Medicare beneficiary, there is about 1 chance in 2000 you will get an arsenic test in any given year.  Read on!

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.  These are 19%, 16%, and 5%, or 40% of all US testing.   Total payments were $544,092. 

LabCorp garnered $154,000 from arsenic testing and Quest $108,000, together holding almost exactly 50% of the arsenic marketplace in the over-65 population.   For this test, LabCorp billed from 13 locations and Quest from 17 locations.  68% of LabCorp billings were from NC.  No Quest location had more than 20% of testing.

81275 and Old Lace

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

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.