Friday, April 9, 2021

Very Brief Blog: United Healthcare to Require DEX Z-Codes for Medicare Advantage; June 2021

According to a blog by Diana Richard on the XIFIN website, dated April 7, United Healthcare (UHC) will require Medicare Advantage claims to include Z-codes, effective June 1, 2021. Read it at XIFIN - here.


There have been news stories about UHC requiring various types of registry codes for lab tests dating back to mid-2020 (see a subscription story at Dark Report here.)

This is the first major sale of DEX Z-codes to a commercial payer that I've read about, although it appears to apply only to United's Medicare Advantage contracts and not its overall book of business as a payer.  According to Kaiser, Medicare Advantage has 24M enrollees in 2020, about 40% of Medicare.  According to United, they have 6.5M Medicare Advantage patients in 2020.  That gives United about 27% of the MA beneficiaries (or about 10% of all Medicare benes, including the FFS ones.)   

Palmetto GBA (which is related via holding companies to South Carolina BCBS) took over the DEX or Z-Code assets last summer, as was announced at the time when the DEX website was rebranded.  (Here, here).   There are currently about ~14,000 entries in the online DEX test library - here.   Some locally-set prices (prices that are not on a national fee schedule) are newly available in DEX (here).

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The Z-code system was originated by McKesson circa 2010, prior to the modernization of the CPT genomic coding system.   It was spun off independent of McKesson as Change Healthcare, which in turn is now owned by United, but along the way the Z-code business silo was acquired by Palmetto.   In March 2021, AHA opposed the union of Change and United/Optum in a filing with the Department of Justice (here).






Very Brief Blog: Senate Hearing for Head of CMS, on April 15: Brooks-Lasure

 It's been over a month since Chiquita Brooks-Lasure was announced as the expected nominee for head of CMS.   Since then, Secretary of Health Becerra has had hearings, and has been confirmed.  (Entry point here.)

Senate Finance Committee has now set the Brooks-Lasure hearing for Thursday, April 15, and set up the web page for it.

Brief announcement at Inside Health Policy here.   See the shell webpage for the April 15 hearing at SFC, here.



Wednesday, April 7, 2021

Brief Blog: MedPAC Presents on PAMA (April 2): Posts Deck; Transcript to follow

On April 2, 2021, MedPAC gave a half-hour presentation on PAMA policy and its recommendations for potential changes.  The full report will appear in a June 2021 as a report to Congress.  

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Stakeholders have complained that in 2017, CMS used rules that selectively under-reported test payments to hospital-based outreach labs and to physician office labs.   In fairness to CMS, the agency was navigating rules from Congress about a lab's revenue sources (Part A vs Part B), and had instructions from Congress (and advice from AMA) not to overburden small physician labs with reporting.   Since then, likely in response to legal actions, CMS has broadened the basket of hospital labs required to report in the next PAMA cycle.

MedPAC used an outside contractor, RTI, to review two topics.  One, could one selectively sample labs and get equally accurate pricing?   The answer is obviously "yes," you don't have to count each one of billions of claims to pin down what the median is, within a percent or so.   And, if you sampled more hospital and physician claims, the median price which sets the next CMS fee schedule, would go up.  

  • Key data showed that independent labs (and mostly big ones) contributed 90% of PAMA data, while hospital and physicians labs were 51% of the market (29%+22%).
  • Hospital and physician lab payments were 45% and 53% higher, respectively, than independent lab prices.

They also considered just going straight to commercial claims databases and not bothering labs directly for data at all, but they seemed lukewarm to this idea.  

In discussion, one panelist wondered if other pricing methods like "competitive bidding" would be better.  That, of course, would be a wholly different legal and policy approach with a lot of complexities (see footnote).   A panelist noted that point of care (local) tests had values, like rapid care and avoided return visit, that may justify marginally higher costs and prices.   A MedPAC staffer noted that the MedPAC was thinking about how to handle all sorts of high priced items with new approaches, whether drugs, DME, or genomics.

From last autumn, 9/2020, see a news article about the MedPAC report process and see a letter at that time from ACLA about the MedPAC report.  Here, here.

Sources

  • Web page for the meeting here.
  • Deck presented, here.
  • By mid-April, MedPAC should post a full transcript as well.
  • Genomeweb coverage here.
  • Inside Health Policy here (Subscription).
  • I posted a 3 minute video about the meeting at YouTube - here.
  • I discussed some of the background issues in a blog in March, here.






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There's an academic article in 2014 about the 2007/2008 effort to push the lab fee schedule into a competitive bidding framework - Kautter & Pope, here (fee).  The lab competitive bidding originated in the Medicare Modernization Act of 2003.  After various legal battles, the competitive bidding effort was tanked by a judge in April 2008 - here, here.

I've seen the hospital/independent lab difference personally, when one year I had a PSA from a hospital system lab and BCBS paid let's say circa $80 for it and another year they paid "Labcorp-Quest" if I recall circa $25.

Tuesday, April 6, 2021

Very Brief Blog: CMS Updates COVID Patient FAQ Sheet

CMS has updated its 17 page data sheet on characteristics of COVID patients in Medicare.

See PDF here:

https://www.cms.gov/files/document/medicare-covid-19-data-snapshot-fact-sheet.pdf

Webpage for project, here:

https://www.cms.gov/research-statistics-data-systems/preliminary-medicare-covid-19-data-snapshot

See the March 24 press release here.  Data runs through January 2021.

https://www.cms.gov/newsroom/press-releases/cms-updates-medicare-covid-19-data-snapshot

###

So far, 700,000 Medicare patients have been severe enough to hospitalize, of which 18% expired (126,000):


For inpatients, about half had less than 8 day stay, about half, longer than that.  1 in 3 admitted patients, 30% ,were 11 days or longer.  As shown above, only 36% were discharged to home.

Very Brief Blog: Quick Tour of CMS Online Hospital Data

From time to time I need to research CMS data files on hospital performance, and it's usually a bit of a trick to find it again.  A brief outline here.

  • First, CMS has a simple consumer facing website for quickly looking up data at a local hospital or two.  It's called Hospital Compare - here and here.
  • If you want to navigate big Excel files, you'll go the professional site, data.cms.gov.   This gives you categorical entry points like doctors, home health, hospitals, etc.  Find it here.
  • I clicked on the Hospital data website and I went to the bottom of the page to show 50 (rather than 5) sources once.  Here.

For example, if you're interested in hospital acquired infection (HAI) data, scroll down till you find "Healthcare Associated Infections - Hospital" as a title.  This gives you a 175,000 line Excel dataset.

https://data.cms.gov/provider-data/sites/default/files/resources/05819383a875a1ebce5ed5f28755558b_1607630718/Healthcare_Associated_Infections-Hospital.csv


The 32 megabyte 175,000 line Excel looks like this:


For example, for Southeast Alabama Medical Center in Dothan, AL, their MRSA data is no different than national and their CDIFF data is "better than national."

For more info on "hospital acquired conditions" (HAC) rules and metrics or specifically a subset which are "hospital acquired infections" (HAI), some websites are here:


(For example, an inpatient hospital acquired skin ulcer or hip fracture would be HAC's that are not HAI's.)

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If you enter the website a certain way, it allows you to go to a "beta" new version of cms.data.gov, but when I tried that, it terrified me and it seemed like data categories and files would become much harder to find that the current hierarchy.   The system they have now is kind of boring and tedious, but the new system "beta" seemed like a confusing form of modernization.






Sunday, April 4, 2021

Very Brief Blog: Spring PLA Codes Due April 8; New Final PLA Codes Released April 2

For anyone planning to get in a Spring Quarter PLA code, the deadline is Thursday, April 8.  See AMA here.

For those who submitted PLA codes in early January 2021, AMA released the results on April 2, 2021.  Find the PDF of code names here.

Codes 0248U through 0254U were released - a fairly small crop (7 codes).   3 of the 7 are from one applicant.

These include:

  • 0248U, "3D Predict Glioma" cell culture test from Kiyatec;
  • 0249U, Theralink 32 phosphoprotein test in breast cancer;
  • 0250U, PGDx elio(TM) 505 gene tumor test, I assume the same as the FDA-cleared test in spring 2020;
  • 0251U, Hepcidin ELISAm "IntrinsicDx;"
  • 0252U, Products of conception aneuploidy test, Igenomix;
  • 0253U, ERA endometrial receptivity test, Igenomix;
  • 0254U, SMART-PGT-A preimplanation cytogenomics test, Igenomix.



Conference Bonanza: McDermott, AI & Dig Path, ISPOR Short Courses, More

Flurry of conferences going by...

McDermott Plus; Diagnostics Forum (April 6)

McDermott Plus Consulting holds its sixth annual Diagnostics Forum, Tuesday, April 6, 12-330 ET.  

Website here, four-page PDF agenda here.  There are a wide range of top speakers both from industry and government; CMS speakers including Tamara Syrek-Jensen, head of coverage at CMS, and Dr Gabriel Bien-Wilner, senior medical director for MolDx.  If I'm reading it right, this virtual meeting may be complimentary.

Cambridge Healthtech - AI and Digital Pathology (Sept 30-Oct 1)

This conference will run September 30-October 1, "a comprehensive program for all aspects of digital pathology and AI."   See the website here.  Early bird registration as low as $399 academic, $899 commercial.

ISPOR - Numerous 4 Hour Short Courses (Monthly)

ISPOR, the international society for pharmacoeconomics and outcomes research, has a bonanza of short courses which are virtually available.  Typically, they are two, two-hour sessions, giving you a lot more depth than an hour's overview but not requiring a full day invested.  

For short courses, here.  March 31-April 1 was Value Assessment of Medical Devices; April 28-29 is Intro to Patient Reported Outcomes (PROs); May 24-25 is Tools for Real World Analysis, and so on.  I sampled one and registration (as a member) was $255.

For all ISPOR events, here.

Just Past: Medtech, Diagnostics, Value & Access (Just Past)

While this European-focused conference on value and market access just went by, March 30-31, you might find the speakers and topics of interest.  See more conferences from this sponsor here.

https://www.evidencelifescience.com/meddevma21-agenda









Thursday, April 1, 2021

Very Brief Blog: Telemedicine and Perfect Competition, Podcast and A Few Links

 Everyone knows that there has been an explosion in telemedicine over the past year and there is much speculation on how it will continue and in what form.  (E.g. for one entry point see Paul Sonnier's essay in The Hill in early March.)

There's an interesting essay on economic and industry-structure repercussions which appeared last fall in Medical Economics under the title, "Will Telemedicine Create Perfect Competition?"  It's by economist Adam Block and health policy expert Michael Adelberg, who heads the health strategy practice at Faegre Drinker.  (Bios here and here).  



The article is newly complemented by a podcast at Health Assurance, a new podcast series.  See the 30-minute podcast here.   

(See index of interesting podcasts. The December 6 podcast authors have a 2020 book, Taneja, Klasko, Maney:  Unhealthcare.   Good podcasts also with Caroline Savello of COLOR, Toyin Ajayi of CityBlock, and Jenny Schneider of Livongo.)

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Perfect Competition?

Perfect competition is an abstraction in economics where there is no friction between buyers and sellers and the exchange of goods, and profits rapid fall to minimal levels as prices approach marginal cost.  The absence of perfect competition gives profits, which formally are called economic rents or monopoly (oligopoly) power. 

Businesses tend to want to avoid perfect competition; creating barriers to entry of all types, whether brand loyalty, difficult credentialing rules, etc.  

There's a book that was influential on me a decade ago, In Defense of Monopoly (U Mich, McKenzie, Lee).  Without foreseeable profits, there won't be future cash flow to pay for today's risk and investments, and innovation is badly impaired.   It's hard to invest for innovation (and risk) if your product will also and quickly be sold at the marginal cost of production.   

But there are also a lot of natural ways for prices to exceed marginal cost.  Let's say a dry cleaned shirt costs $5, and in my city there's enough business for a dry cleaner every 2 miles.  Let's say it costs $1 for me to drive 2 miles.  My dry cleaner can charge $5.99 for a shirt (with 99 cents profit) before it makes sense for me to drive 2 miles to get a shirt cleaned for $5.00.   It's these inherent frictions that we may rarely think about, that give even a near-commodity business some return on investment.   Take them away, and the economics go into alternate paradigms we aren't used to.  This in turn affects industry structure and vertical integration (see. e.g. Coase's work on "the nature of the firm.")





For the Record: Links to Becerra Hearings, Documents, Auto Transcripts

Early in the Trump administration, there were hearings for the initial Secretary of Health, Tom Price, and for the CMS administrator, Seema Verma.  The Price hearings weren't particular informative of future policy but I found the Verma hearings extremely interesting and worthy of study, at the time (here, here.) 

We've now had the HHS Secretary Becerra confirmation hearings - I don't know how telling they will prove to be, but I provide links below.  In the near future, we'll have hearings for proposed CMS Administrator  Chiquita Brooks-LaSure (here) and I'll provide links when they occur.



For Your File; Some Resources for Becerra Hearings

Becerra had hearings at the Senate Finance Committee, and at the Senate HELP Committee (Health, Education, Labor, Pensions).

See the HELP webpage here - February 23, 2021.

https://www.help.senate.gov/hearings/nomination-of-xavier-becerra-to-serve-as-secretary-of-health-and-human-services

There is a 3h 20m video streaming here.  There is a link to a simple two-page opening statement here.

See the SFC webpage here - February 24, 2021.

https://www.finance.senate.gov/hearings/hearing-to-consider-the-nomination-of-xavier-becerra-of-california-to-be-secretary-of-health-and-human-services

There is a 3h 18m video streaming here.  

There are more document links.

  • Sen. Wyden's 2-page opening statement here.
  • Sen. Crapo's 3-page opening statement here.
  • Becerra's 2-page opening statement here.
  • Of more interest, a 95-page PDF of "questions for the record," here.
Auto Transcripts For the File

I did not see easily available transcripts on the hearings.   I made auto transcripts which are not ideal but which do provide a written record of the content with about 98% accuracy.

I've put all the PDFs and the Word document auto transcripts in a cloud zip file HERE.  

Note that SFC video stops, for me, around minute 30, and so the resulting auto-recording and auto-transcription is in two parts, Part 1 and Part 2, as will be clear in the Zip file.  

Regarding auto-transcripts, the best service I know is otter.ai.   Regarding rapid online human transcripts, my favorite is Rev.com.



Very Brief Blog: Prior Auth Saga Continues; Open Information Webpages at United Healthcare

The saga of prior authorization continues - a colleague pointed out that United Healthcare has a number of open-access webpages that describe its evolving rules for providers.

See UHC "Genetic and molecular lab testing updates" - here:

https://www.uhcprovider.com/en/resource-library/news/2021-network-bulletin-featured-articles/0421-genetic-molecular-lab-testing.html?cid=em-providernews-apr21nb-apr21

See UHC "Genetic and molecular lab testing Notification/Prior authorization" - here:

https://www.uhcprovider.com/en/prior-auth-advance-notification/genetic-molecular-lab.html




Very Brief Blog: Comment til April 23 on CAP Recommendations for Immuno-Oncology PD-L1 Tests

We've read about multiple efforts (!) to harmonize PDL1 testing and reporting, and we've read much about other biomarkers such as tumor mutational burden (in the news this week; here, here).   '

The College of American Pathologists (CAP) has a webpage dedicated to upcoming and recently finished CAP guidelines - here.  

One of the newest is an in-progress guideline for PD-L1 testing - here.  The PD-L1 webpage states, "The primary goal of this guideline is to develop evidence-based recommendations for the testing of immunotherapy/immunomodulatory biomarkers including PD-L1 and TMB in patients with non-small cell lung cancer (NSCLC)."   


The webpage provides you with 8 "key pre analytical questions" and creates an open comment period on proposed guideline conclusions which is open to April 23.   There's a link to a 7-page bibliography, and a link to a PDF of 6 proposed summary recommendations.  You can click on a comment box which collects basic information on the commenter (e.g. profession, such as pathologist) and allows step by step comment on each of the recommendations.

Comments are open until April 23.

At the work in progress webpage here, ten topics are listed: MSI testing, glioma evaluation, monoclonal gammopathies workup, HPV lesion terminology (ano genital), PDL1, whole slide imaging, IHC validation (in general), amyloidosis protocols, HPV testing rules for H&N cancer, TKI testing in lung cancer.  

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Read about Friends of Cancer Research efforts to harmonize mismatch repair reporting (here) and TMB reporting (here).



Tuesday, March 30, 2021

Very Brief Blog: NYT Exposes Elite Hospitals Charging $3000 to Payors for Single COVID Tests

 In brief, a New York Times story today describes elite Manhattan hospitals - like Lenox Hill - charging $3000 for single COVID tests.   They note that Congress requires COVID tests to be covered without a fee to the patient, but assert there is price gouging by some suppliers.

https://www.nytimes.com/2021/03/30/upshot/covid-test-fees-lenox-hill.html?action=click&module=Top%20Stories&pgtype=Homepage






Very Brief Blog: JAMA: After Vaccination, Strong Real-Life Neutralizing Antibodies for COVID Variants

An interesting short open-access article in JAMA this week by Edara et al:

https://jamanetwork.com/journals/jama/fullarticle/2777898


There are two types of COVID antibody tests, simpler tests for the presence of anti-COVID antibodies, and more complex tests that actually use cell culture to detect whether there are toxic "neutralizing antibodies."   In this report, the authors set up not one, but four types of cell culture systems for neutralizing antibodies, against four major variants.   

Two findings.  One, vaccinated persons (Moderna version) produced stronger neutralizing antibodies than either new or recent COVID patients.   Second, the antibodies performed well regardless which of the four viruses was used in the cell culture system.  Click to enlarge.


Note that in the left panel, a few hospital patients 10 days into their illness still had minimal detectable neutralizing antibodies (their dots sit at bottom in each column.)   Note also that the convalescing patients (middle panel) were several months post infection, and expected to have gradually falling antibodies, whereas the Moderna patients (right panel) were exactly 2 weeks after their second injection, which might be the natural "peak antibody" timepoint.


AMA Releases Agenda, Proposals for May CPT Meeting; Permission to Comment Available to April 15

As AMA prepares for its May 2021 CPT meeting, it has released the agenda of code proposals.  Interested stakeholders can obtain a copy of the application packets by requested by April 15, and then, responding by April 22.  AMA screens the requests to comment for being a validly involved stakeholder (e.g. not a journalist, not just curious, etc).   For example, a competitor company is a valid stakeholder.

See the code proposal list here:

https://www.ama-assn.org/system/files/2021-03/cpt-panel-may-2021-agenda.pdf


There are circa 54 total agenda topics.  It looks like 17 are for Category III codes.  The codes range from Tab 6, Revise Non Face to Face Inter-Professional Consultation (99451), to Tab 60, a proposal to create a code for cytogenomic (genomic wide) analysis by the low-pass sequencing method (styled as an addition to the 81228/81229 cytogenomics code family).   This technique has been reported to have less adverse racial bias that some other methods (here).

My vote for most interesting/unusual/unexpected application is Tab 8, "Climate related health counseling."  On the digital front, see Tab 15 (CT post processing with artificial intelligence for low dose CT), and the pair Tab 46 (validated digital online therapy program) and Tab 47 (remote cognitive digital behavioral therapy.)

It might be a bit scary for owners of Cat III codes that there are ~17 new applications for these codes, but I only counted 1 application to elevate a Cat III to a Cat I code and 17 applications for simple deletion of Cat III codes.  

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Lab test items had an earlier comment cycle in the beginning of March (entry point here) to allow the comments be available for pre-May subgroups for lab tests (Molecular Pathology Advisory Group MPAG, Pathology Coding Caucus PCC.)





MGH Study on Genomics, Low-Pass Sequencing, Racial Bias

We periodically hear that too many genetic studies are overpopulated with people of white European backgrounds (e.g. here).   This week, a paper by MGH's Alicia Martin et al. is the basis of a lead story by Christie Rizk at Genomeweb.

  • Genomeweb: Low-Coverage Sequencing Effectively IDs Novel Variants in Underrepresented Populations. (here
  • Amer J Hum Genet: Low-coverage Sequencing Cost-effectively Detects Known and Novel Variation in Underrepresented Populations. (here)
Martin et al. write, "[M]ost genetic studies use genotyping arrays and sequenced reference panels that best capture variation most common in European ancestry populations....Low-coverage sequencing approaches surmount the problems induced by the ascertainment of common genotyping arrays, [and] effectively identify novel variation particularly in underrepresented populations..."

To my knowledge, the largest study directly comparing low pass genome sequencing to microarrays appeard in 2020 in J Molec Diagnostics, by Chaubey et al., a team based at Perkin Elmer (here), using 409 cases, each detected by multiple lab methods.  (See earlier coverage of Chaubey et al., here).   

There is no Category I CPT code yet for low pass cytogenomics, although there are several PLA codes, including one at Mayo Clinic, one at Perkin Elmer, one at New York Genome Center (0012U, 0209U, 0156U.)

More From the Martin et al. Study

Genomeweb goes on to describe the following:
They [Martin et al.] further found that 1x sequencing was among the more affordable options, costing less and performing similarly to or better than commonly used lower-density arrays such as the Illumina GSA. 

They also noted that the GSA is composed of variants that are most common in European populations and so it's therefore not the most appropriate technology for studies of participants with primarily non-European ancestry. 

Aside from cost, low-coverage sequencing had several distinct advantages compared to GWAS arrays, particularly more accurate identification of genetic variation across the allele frequency spectrum in underrepresented populations. 

In the NeuroGAP-Psychosis data, the researchers found that 38 percent of common variants could not be imputed from the 1000 Genomes Phase III data, most likely because of a lack of eastern and southern African diversity in that panel.  

Sunday, March 28, 2021

Very Brief Blog: Three Interesting Articles: (1) DNA Horizons & COVID (NYT); What's Next Moderna (Forbes); Payer Medical Directors as Leaders (McKinsey)

Three interesting readings came across my desk this weekend.

  1. Genomics Boom.  New York Times Sunday Magazine runs a feature article on the boom in genomics in the last several years, the explosion in sequencing technologies triggered by COVID, and what's next for healthcare and society.  By Jon Gertner.
    1. Here.
  2. Moderna's Horizon.  Perhaps even more interesting, Forbes runs a long interview with the CEO of Moderna, and talks about what's next - cancer vaccines, a far more effective flu vaccine, and much more, based on the horizons made possible by injectable RNA technologies.  By Leah Rosenbaum.
    1. Here.
  3. Chief Medical Officers. The global consultancy McKinsey and Company releases a 5 page white paper on the increasingly important strategic role of payer medical directors and chief medical officers.
    1. Here.


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Unrelated to the McKinsey article, an article appeared by subscription in Financial Times on "the value of corporate chief medical officers."  A copy of the FT article appeared to be reflected here.

Saturday, March 27, 2021

Mark Your Calendars: MedPAC PAMA Report on Lab Policies, Friday April 2

In December 2019, Congress delayed PAMA implementation by a year (and in Spring 2020, by an additional year).   However, in return, Congress required the federal advisory body MedPAC to report on PAMA policy and issues by April 2021.

That day has come.  

  • MedPAC has released its agenda for Thursday/Friday, April 1/2, 2021, and it includes a briefing on its Report to Congress regarding PAMA.   
  • Find the home page for the meeting here.  
    • MedPAC hasn't released the slides or text for the report yet.  
    • Transcripts are released a few days after the meeting.
    • At the website, look for a video registration links for GoToWebinar.  There's separate links for Thurs AM, Thurs PM, Fri AM.  They ask you to please, only sign up for sessions you will attend due to limited broadcast bandwidth.
    • There is a Public Comment box, but it's on the home page for Public Meetings, not on the home page for the April 1-2 meeting.  Here.  It just leads you to a comment mail box at meetingcomments@medpac.gov .

PAMA TOPIC is scheduled from 11:00am to 12:30pm on April 2 (ET).  

MedPAC discussed lab pricing under PAMA in September 2020 (entry point here).  Their discussion of lab pricing falls in the context of increased molecular pathology spending, in round numbers from $500M in 2017 to $1B in 2018 to $1.5B in 2020.   Both OIG and MedPAC have pointed responsibilty to what they call "expensive tests."  OIG here.  In  is annual multi-topic report to Congress earlier in March, MedPAC suggested Congress or CMS restrict telemedicine orders of expensive DME or lab tests, due to  program vulnerabilities revealed by "Operation Double Helix."   Operation Double Helix asserted there had recently been $2B of genetic test fraud, much of it by fly by night telemedicine orders.  ("...fraudulent genetic cancer testing has resulted  in charges in five federal districts against 35 defendants associated with dozens of telemedicine companies and cancer genetic testing laboratories.")  For an example of a conviction of this type of telemarketing/telemedicine scheme after a 4-day trial, here.

The assertions about telemedicine misuse conflict with the complexity of genetic testing and the need for expertise (and, for commercial insurers, often preauthorization), which can often be provided by telemedicine by expert genetic counselors and physicians.   See for example the highly legitimate acquisition of Trapelo's precision oncology services and platform by NeoGenomics last week - here.  see also the alliance between Foundation Medicine and Informed DNA announced earlier this month - here.



I''ve argued in a series of 5 detailed reports that the Double Helix expenditures were almost entirely driven by a stupid lack of edits of very costly genetic test codes at just three MACs (Cahaba (now defunct), Novitas, FCSO).  Here.


The explosive growth in MoPath tests was only partly accounted for by reasonable growth (e.g. more tumor tests to guide drug choices).  Much of the growth was accounted for by genetics labs named in Operation Double Helix.  See for example the explosive growth in the code 81408, unedited-for in southern states.  But look equally at where 81408 was never paid!  Never billed by labs like Quest, Invitae, Ambry, Bioreference, etc.  And 81408 was essentially never paid in the MolDx 28 states (which have elaborate test controls, funding, and infrastructure) nor in the NGS MAC states (which have no novel controls or contracts for genetic testing.)

Practically100% of 81408 Spending, 2019, in Novitas & FCSO MACs





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In December 2019 legislation, Congress delayed PAMA but required MedPAC to report on its implementation, options to streamline data collection.  However, Congress  added a phrase allowing MedPAC to also report on any issues it deemed relevant.

The PAMA delay is confusing.  Originally, national lab prices from 1H2019 would be submitted to CMS in 1H2020 to set prices in 2021, 2022, 2023.  Now, lab price data from 1H2019 will be submitted to CMS in 1H2022 to set prices in 2023, 2024, 2025.


Friday, March 26, 2021

Nerd Note: Finding Out if an IDTF is Enrolled in Medicare

Medicare has a unique type of provider (created by regulation not statute) called IDTF - Independent Diagnostic Testing Facility.

For example, this is how iRhythm is enrolled as a Medicare medical provider, as an "IDTF."  

HeartFlow 

One of the most innovative providers in cardiology imaging is HeartFlow, which provides sophisticated computed fractional flow reserve based on prior high resolution cardiac CT imaging.  Website here.

As a cutting-edge innovator, Heartflow faced a series of problems with CMS that are a matter of public  record.  

  • For example, they experienced denials when attempting to enroll (here 2016, here 2017).*  
  • Later, when Heartflow got a CPT code (Category III), I recall that CMS initially wanted to categorize it as "bundled" (ouch!!!).  
    • But with some good arguments, CMS later recognized Heartflow analysis as separately payable, and assigned it a substantial hospital outpatient APC payment level (I think around $1500).

I noticed that Noridian has a brand new pending LCD for HeartFlow which will be effective in April (L36615, A58097).   Seeing those LCDs, it led me to as, Is HearFlow enrolled as an IDTF now?


Is Heartflow Enrolled as an IDTF now?

Start by finding the NPI Number

First, it's really easy to lookup an NPI number - you can google Heartflow and NPI, or go to a database

The NPI for Heartflow is 1982019980.

What Doesn't Work

There's a CMS Physician Compare database that lets you look up whether a physician NPI is enrolled in Medicare, or a hospice,  but this dataset doesn't include IDTF as a category to look up within.

https://www.medicare.gov/care-compare/?providerType=Physician&redirect=true


What Did Work

Support staff at Noridian pointed me to a public database called MEDPARD that gives LOTS of types of providers, many more than the prior link.  Use this Noridian link:

http://norweb.noridian.com/medpard/main.aspx

Here, the drop down menu gives you all the physician specialties (hematologist, internal medicine, endocrinology), plus a plethora of institutional categories (hospital, hospice), plus... IDTF.



Select IDTF and select Northern California, and you get a list of 200 IDTFs, one of which is HeartFlow.  


Bingo!


Footnotes

Misnamed?  MEDPARD is "Medicare Participating Physician Directory," but as just indicated, it seems to be misnamed, in as much as it displays a large variety of provider types besides physicians.  

Other MACs, Different Windows to MEDPARD.  I may have been lucky with the Noridian webpage into MEDPARD; I tried to search the MEDPARD database at the NGS MAC for any IDTFs in Illinois and got "0" which seems unlikely.   

I tried Novitas for Texas, but it required a county to be named in Texas, before initiating its Medpard search, and when I picked one by chance, it gave an error message.

___

* Based on information I got via FOIA, these enrollment challenges between HeartFlow and Noridian continued past 2017 into 2018 or 2019.




Wednesday, March 17, 2021

SoCalBio: Fourth Annual Digital Health Conference

VIDEOS POSTED:

http://socalbiodh.com/

 


#####


Did you know that Los Angeles and Orange Counties are one of the top several investment zones for digital health?   See the 4th Annual Digital Health Conference, sponsored by SoCalBio, the Southern California Biomedical Council.

The SoCalBio website is here.

The page for the digital health conference is here.  As you scroll down, you'll see the full agenda.

The conference runs March 23, 24, 25 (Tuesday, Wednesday, Thursday).  The three-day list of topics and speakers is pretty impressive.

I'm speaking on a panel on digital health policy and payers - 3 pm PT on Wednesday, March 24.  Our topic is, "Digital Health - Regulatory and Reimbursement Issues to Watch."  We'll have myself, Vivek Thakkar, Digital Health Program Director, Genentech; Rick Gannotta, Chief Healthcare Administrative Officer, Masimo; Evan Seigel, CEO, Ground Zero Pharmaceuticals; and the panel is moderated by Peter Blaisdell, Chair, SoCalBio Innovation Catalyst Program.




Webinar at Dark Report: Genetic Testing Marketplace, What's Changing (March 25, 1 ET)

See a webinar convened by Dark Report on Thursday, March 25, 1 ET (10 PT):

"State of the Genetic Testing Marketplace--Getting Paid for All Your Lab's Genetic Test Claims: What's Changing, What's Not, What's Working Best."

Home page is here.

Registration page is here.

Discount code, GENTEST.


Speakers will include Robert Metcalf, CEO, Concert Genetics; Healther Agonstinelli, AVP of Strategic Revenue Operations, Xifin; and Bruce Quinn.


Tuesday, March 16, 2021

Trapelo Hosts Podcasts with Medicare and Commercial Payer Viewpoints

Trapelo Health is an interesting organization that aims to improve the patient experience for cancer patients, reducing complexity and making decisions more clear

  • Find their website here.
  • The week after this blog was written, Neogenoimcs acquired Trapelo for $65M - here.

Trapelo offers some interesting media collateral.   (Email sign-up required).

  • See an interesting 60-minute webinar, an interview between Lee Newcomer MD, former chief medical officer of United Healthcare, and Clynt Taylor, CEO of Trapelo Health.  Here.
  • See their podcast series with leaders in precision medicine.  Sign up for access here.  Of particular interest to reimbursement issues, see:
    • Episode 44, February 22, 2020, 25 min, with Dr. Gabriel Bien-Willner of MolDx.
      • Bien-Willner is also heard in Episode 40, October 29, 2020.
    • Episode 20, July 25, 2019, Chet Burrell, former CEO of CareFirst BCBS.
    • Helpfully, Trapelo provides {DFs as well as audio.
    • Podcasts are hosted by Jerome Madison, Trapelo's VP for Provider Relations.

_____________

Tangents from the topic of Trapelo Health.  See the new alliance between Foundation Medicine and Informed DNA (here), and read about an alliance between PWN Health and Sema4, the latter recently valued at $2B.  See also the approach of Cancer Commons to clarifying the confusing journey of cancer patients (here).  Grand Rounds, which has one line of business in oncology second opinions, merges this week with Doctor on Demand in a "multi billion" dollar deal.  Doctor on Demand recently raised $75M, while Amazon announces virtual-first healthcare services here.   CMT Solutions has prior authorization as a core competence, but advertises a range of services including genetic counseling; raises $10M (here).  XIFIN, which began as a lab billing firm, doesn't forward-integrate into patient care services but does provide advanced financial data like copay estimators (here).  Yet another firm aiming to sherpa over the patient-payer divide is Transcarent, recently raising $44M.


In a similar vein, see news at Genomeweb (here) that ACMG has published a new guidance on bringing together genetic screening tests with effective clinical counseling, follow-up, and care (here).   Challenges include lack of funding for genetic counseling in most health systems.






Informal Blog: Diagnostic Tests and Saving Money

I was on a call recently with a startup lab company that has a new technology it asserts will save money.  The startup doesn't have any modeling or data yet, but was making the general argument that better diagnostics save money.

Do diagnostics save money?  Well, sometimes yes, for sure, but not necessarily.   I put together some citations and I'm logging them here.

Do Preventive Services Save Money?

On the topic of preventive services saving money, much has been written.  In general, preventive services that are widely adoptive are at least cost effective (the cost in dollars per each life year saved), but not literally cost-saving.  See a New England Journal article from 2008 here.  See a 2012 Congressional Budget Office report (discussed in NEJM) here.  See a 2018 Aaron Carroll article here.  

Looking at imaging, mammography is beneficial, but likely not literally cost-saving, with costs per life year in the $10,000-$70,000 range (herehere).

For one example, when smoking prevention avoids a lung cancer death, that person lives on to die of something else - a stroke, colon cancer, Alzheimer's disease, and so on.   

A CMS-funded study in 2019 seemed to show that 7 different colorectal cancer prevention strategies all saved money (at least a bit, a bit better than cost-neutral) against no-screening, but some of the more expensive methods were less effective (per this study) and ;ess cost-effective than less-expensive methods. So just because a method is more accurate and more expensive, it is not necessarily more cost-saving or more cost-effective.  (I think this publication has had rebuttals; take it as a for-example).

Do Diagnostic Tests Save Money?

Sure, some do.  See Pimentale 2016 for cost savings with better diagnosis of irritable bowel syndrome (here).   See Pliakos 2018 on saving money with more rapid diagnosis of blood stream infections (here.)  

But is that the big picture?  If we want a general answer, we should probably turn to a comprehensive review.  Fang, Neumann et al at Tufts did a 2011 comprehensive systematic review of diagnostic test cost effectiveness (here).  Reviewing 141 studies, about 15% reported results that were literally cost-saving; others were "cost-effective."   See figure, in which the left-most column is the number of the tests reported as "cost-saving:"

Fang et al. 2011 Fig 3 
Industry Funding?

In J Clin Oncol in 2018, Wang et al. looked at numerous cost effectiveness studies of a 21-gene breast cancer recurrence test (here).   They reported that they found a range of cost effectiveness values, critiqued the methodology of some reports, and reported that the two studies with the "worst" cost effectiveness (>$50,000 per life year), were "not" industry-funded.  A few studies, but only a few out of 20 or so, reported "cost savings" per se.

Most recently, writing in Value in Health in 2021, Koldehoff et al. looking at the cost-effectiveness of genetic testing for breast and ovarian cancer risk (e.g. BRCA testing) - here.  BRCA testing could run from being cost-saving to have a cost of $22,000 per life-year (QALY).  In other settings, multi-gene testing ran from $15,000/QALY to $70,000/QALY, depending on scenarios and health care costs in selected countries.   

Are diagnostic tests cost-saving?  "It depends," and if you are depending on an insurer like BCBS to pay you a lot more, "because you are saving the payer billions in costs," they'll probably require some convincing.





Landmark Study of Personalized Medicine Integration in Health Systems; Health Advances & Personalized Medicine Coalition

The Personalized Medicine Coalition (PMC) and the consultancy Health Advances have published a landmark study on how U.S. medical systems are integrating (or failing to integrate) personalized medicine into their healthcare delivery and workflow.

The work was previewed at the November 2019 PMC annual meeting in Boston.

See the open access article at J Pers Med online here (PDF, 13 pp).

See the March 16, 2021 press release at PMC here.

click to enlarge

___

For another perspective on adoption of personalized medicine at health systems, see a November 2020 online article by consultancy Decibio, here.

Monday, March 15, 2021

MEDPAC Releases Annual Spring Report to Congress (531pp); Targets Genetics by Telemedicine

Each spring, MEDPAC releases a lengthy annual Report to Congress.   This year it weighs in at 531pp.

  • Full report here.
  • 24 page chapter on telehealth, telemedicine, here.
  • 3-page summary press release, here.

Nix Telemed Orders for DME and Genetics?

MedPAC formally recommends (page 470-471) that higher cost clinical lab tests (e.g. genetic tests) could be ordered only after clinicians provide at least one face-to-face visit with the patient within six prior months.  They note this is in response to cases where DOJ has charged 300 persons with submitting $6B in "false and fraudulent claims" (quote) of which $4.5B was related to telemedicine "without interacting with patients" or "only a brief telephone conversation" with patients.  

Note that Medicare already requires that a test-ordering physician must be treating the patient and managing his/her disease for which the test will be used (42 CFR 410.32).  A telemed doc who has a 1 minute call with the patient and never talks to her again, would not meet the "physician managing the disease" requirement.

Telemedicine

There has been a radical expansion in telemedicine in Medicare under the COVID pandemic, and providers have been paid at office-based rates which are higher than facility-based rates.  MedPAC recommends continuing this for 1-2 years after the pandemic ends to "gather data," although they recommend that during this extension period, CMS cut payment rates to the facility-based rates regardless of the physician's location (e.g. office). 

Incident-To Under a Microscope

They recommend CMS collect data about incident-to services, focus on potential problems with incident-to telemedicine services, and prohibit incident-to billing if a provider can provide the service directly (e.g. a physical therapist or psychologist can bill Medicare directly; 471-472.)


Friday, March 12, 2021

CMS Delays Start Day for "Breakthrough Device" Coverage (New 30 Day Comment Period)

On Friday, March 12, after market close, CMS announced it was delaying implementation of the Medicare Coverage for Innovative Technology (MCIT) program.  The program, which was released as final by the Trump administration in mid-January, would provide 4 years of coverage for any devices cleared by the FDA as "breakthrough pathway" devices, from a start date of 3/15/2019.   The regulation also "codified" longstanding CMS rules defining "reasonable and necessary" as a coverage criterion.

The delay was pre-posted as a PDF on March 12 and published in the Federal Register on March 17  published in the Federal Register on Wednesday, March 17.     Home page for the new rule here.   See the green box, "Sumbit A Formal Comment."  PDF of rule here.  Citation, 86 Fed Reg 14542-45.  Comments due April 16.  

 The change is styled as a "60 day delay with comment period."   The new implementation date, if nothing else changes, will be May 15 instead of March 15.  Note that the regulations for MCIT have already, technically, been finalized for Code of Federal Regulations, all ready to launch (42 CFR 405.601ff).  However, perhaps because of this new rule, the January "final regulations" for MCIT don't appear in the eCFR (here).



Update, March 13-15

  • See my four-minute video explanation at YouTube, here.
  • On March 10, NEJM published a four-page critique of MCIT, by Rathi, Johnston, et al.  My original blog had cited a Nature Biotech paper by Johnston et al., critical of the Breakthrough program.   
    • The March 11 NEJM critique is found here.
    • RAPS summarizes NEJM here.  MedTechDive summarizes here.
    • See 11/2020 MEDPAC comment on MCIT here.
  • Fierce Healthcare here.
  • RenalytxAI (Publicly held small lab company) here.
    • As of Monday 10 ET, stock had only dipped a few percent.
  • See Blog on LinkedIn by AdvaMed, March 23, here.



__ Original Blog Continues___

CMS Adds Some Comment

The publication today was not strictly "pro forma."  The administration gives several types of concerns.  

Operationalizing the Rule.  For example, CMS notes the rule might be hard to operationalize, since it promises coverage "from the first day of FDA approval."   I would have assumed, or the rule stated, that existing coding and payment rules apply, and if a new code was needed, it would take a few months and providers would have to hold claims.  For example, NCDs are effective "the day they appear" but CMS often takes months to issue full-fledged codes or coding rules. On the other hand, if a device was bundled, it would be "covered" but without any net impact.  CMS adds that as the implementation drew closer, it realized it had "underestimated" operational challenges.  

Bruce's takeaway:  I assumed "coverage" would be first-day but "claims" would take several months to implement, sometimes.  But that has occurred in other situations.  A lot of things might be "covered" but no added payment to a outpatient or inpatient bundle.

DME Rule.  CMS also cites some overlapped with a proposed, but not finalized DME rule that appeared last fall.

Bruce's takeaway:  I've read the DME rule and didn't see much conflict.

Volume.  CMS notes that breakthrough device volume was estimated, in the rule, by CMS, at 2-5 devices per year.  This made no sense to me, since a July 2020 publication had reported there were 200+ devices in the MCIT pathway already at that time.  CMS cites public remarks by FDA in February 2021 that 400+ devices were in the breakthrough pathway.  FDA here.

Bruce's takeaway:  Yup, the CMS estimate of 2 devices a year seemed oddly low.

Bruce's takeaway:  The FDA devices annual report page is worth seeing on its own.

Validation in the Elderly; first do no harm.  CMS notes that some devices might not be well-validated in the elderly and there could be "patient protection issues" which would point toward non-coverage of the device.

Did your complaint get ignored? CMS notes that in the original public comments, some parties had asked for more details on implementation.   CMS gives   any negative stakeholders a chance to assert that their negative views were not properly discussed, aired, and dealt with in the CMS final rule.

The rule specifically cites criticisms that appeared in New York Times and Health Affairs.

___


Footnotes.

Diagnostics Are In (for now).  Whereas the August rule proposal had been ambiguous about Diagnostics coverage, the final rule in January made clear it applied to all FDA breakthrough devices, including diagnostic ones.

NEJM Article.  After my original March 12 blog, I became aware of a March 10 paper in NEJM critical of MCIT, Rathi, Johnston et al. here.


Two recent Breakthrough devices.  As I was researching this for new headlines, up popped two press releases in recent days.   Anuncia received FDA breakthrough status for review of its Anuncia Reflow Mini, CSF shunt; and Inovise received FDA breakthrough status for review of its Inovise "Audicor" remote heart failure management system.






Very Brief Blog: Foundation Medicine CDx LBx Test Gets "ADLT" Status

This quarter,  Medicare added a 9th test to its list of "ADLT" tests - advanced diagnostic laboratory tests. ADLTs are a specially defined type of lab test whose code is priced initially at its market list price (assuming it hadn't been previously priced on the CMS fee schedule) then annually repriced to its market median price.

The ninth test is Code 0239U, Foundation Medicine Liquid CDx test.  It was approved 1/25/2021, with its "New ADLT Initial Period" to run 4/1/2021 to 12/31/2021.   Prior to 4/1, the test is "contractor priced."  The ADLT price will be $3,500.  

Historical note - The initial paraffin-based FMI CDx test was the "first ADLT," with code 0037U, and granted ADLT initial pricing status from 7/1/2018 to 3/31/2019. 

ADLT 0239U was applied-for July 2020, released October 2020, effective January 2021.  The FDA approval was October 26, 2020 (here).  It was an FDA "breakthrough" device.  The  64 page safety summary P200006B is here.  An additional November 6, 40 page safety summary P200016B is here, adding genes.  (I believe that FDA has to issue new "P" PMA numbers rather than updating the original - ?).  The ADLT application at CMS would have waited til the actual FDA approval dates, I think, at which point it was too late to make the deadline for a January 1 kickoff ADLT pricing date. 

See the updated ADLT price list here:

https://www.cms.gov/files/document/advanced-diagnostic-laboratory-tests-under-medicare-clfs.pdf  

Quirks of ADLT

  • Don't Mis-Time your ADLT Application versus the CMS Annual Normal Pricing Process

The ADLT pricing process is driven by the creation of a CPT code.   If a lab test has a CPT code (including a PLA code) that completes the annual new code pricing process before it completes the ADLT process, then the CLFS fee schedule price will apply rather than the rule regarding the new ADLT's list price.   So usually, you want to time your code creation to ensure it will finish the ADLT pricing process before CMS handles the code through the traditional gapfill/crosswalk annual process.

  • Tricky Way Initial List Price Is Defined

Due to tricky ways that the ADLT regulation is written, the initial 9 month ADLT price will be the lowest price publicly available on the first day the test is available for ordering.   For example, as I read it, if your price on Day One is $3000 list, $500 for uninsured patients, then your ADLT initial price will be $500.   

On the other hand - as I read it - if your Day One price is $3000 list, and on Day Three you add a $500 uninsured price, only your Day One price is used to set the ADLT initial price at $3000.  

See the regulation at 42 CFR 414.522, but paying extra-special attention to the definitions of the wording found there.

  • Some ADLT Initial Prices Have Been ReSet by the Annual Process

ADLT's are priced annually, based on reported market prices, but it's a slow process.  As I understand it, for example, 1H2018 might be a claims collection period for the ADLT, 1Q2019 a reporting period, and January 1, 2020, the new ADLT price date.   So it's annual, but slow.

Two ADLT prices have been reset downward by the PAMA annual process, with Myriad test 0172U Myriad My Choice CDx [FDA] dropping from $4040 initial to $3030, and Myriad test 0090 MyPath Melanoma dropping from $1950 to $1755.

click to enlarge






Very Brief Blog; MOLDX Publishes Article Defining "Algorithm" Valuation in Lab Tests

CMS releases new local contractor policies and articles on Thursday, and yesterday, MolDx released an article with the concise title, "Algorithm Definition."  It's logged as CMS article A58650.

Find the link here:

https://www.cms.gov/medicare-coverage-database/details/article-details.aspx?articleid=58650&ver=2&bc=CAAAAAAAAAAA

I've cut-pasted the article in full within this blog.  It has effective date, 3/11/2021.

Other Definitions of Algorithm

CMS also defines algorithm for a lab test by law at 42 CFR 414.502, but it's beyond my scope to assess if there's a meaningful difference between 414.502 and A58650.  I've clipped the 414.502 definition at bottom.

AMA defines algorithm in the CPT code booking regarding MAAA tests - I've also clipped this at bottom.

International Group - Polygenic Risk Scores

In related news, The Clinical Genomics Resource Complex Disease Working Group has published a paper in Nature on defining polygenic risk scores.  Nature here, Genomeweb here.


Palmetto MolDx Article Text:


This contractor defines an algorithm, as a distinct component of clinical laboratory processes, as follows:



An algorithm may be considered a clinically valuable and independent component of a laboratory process when ALL the following conditions are met:

  • It is an unambiguous problem-solving operation that includes deploying a set of rules or calculations requiring computer processing;
  • The test result (or a component of the result) is the calculated output of this process, and not an intermediary process;
  • The same or similar test result could not be obtained without the use of this process;
  • The input for the computation is derived from biological samples using analytical processes, and must include data from the sample submitted for the test;
  • The process must:

Either be required for the analytical result, OR

If adjunct to the analytical result as a post-analytical process, the calculation itself must be independently found to be reasonable and necessary apart from the other components of the test.

Examples. [Note that examples 2,3,4 are of "non-algorithms".]

  1. A gene expression profile test wherein sequencing data must be compared in a calculation to an existing and validated set of profiles to bin it in one of several possible risk stratification groups would require the use of an algorithm as defined above.
  2. A next generation sequencing (NGS) test that uses computation to identify variants in a sample is not considered as using an algorithm in this context. The calculation in this scenario is seen as an intermediary process.
  3. Calculations using only clinical information not derived from analytical services on biological samples are not considered algorithms in this context. Examples would include using the clinical information from the patient in a calculation to assess their risk stratification or using a similar process to identify relevant clinical annotations derived from literature as associations with sequencing variants.
  4. A test that inputs resultant analytical processes that are reasonable and necessary (such as gene variants or protein markers) that are post processed by computation, but wherein that subsequent computation is not independently established as reasonable and necessary above and beyond the other lab components, shall not be considered an algorithm as a valid component of a laboratory test.

###

Other sources with definitions of algorithims include (A) Medicare statute, (B) Medicare regulations, and (C) AMA CPT.

(A) Statute Definition

SSA 1834A

  • The statute states only that an algorithm is used and yields a single and patient-specific result.

"The test is an analysis of multiple biomarkers of DNA, RNA, or proteins combined with a unique algorithm to yield a single patient-specific result."

(B) Regulation Definition


42 CFR 414.502 (ADLT law)

  • The regulation adds a few terms such as "predicts the probability" and "will develop" and "will respond to."

Advanced diagnostic laboratory test (ADLT) means a clinical diagnostic laboratory test (CDLT) covered under Medicare Part B that is offered and furnished only by a single laboratory and not sold for use by a laboratory other than the single laboratory that designed the test or a successor owner of that laboratory, and meets one of the following criteria:
(1) The test -
   (i) Is an analysis of multiple biomarkers of deoxyribonucleic acid (DNA), ribonucleic acid (RNA), or proteins;
   (ii) When combined with an empirically derived algorithm, yields a result that predicts the probability a specific individual patient will develop a certain condition(s) or respond to a particular therapy(ies);
   (iii) Provides new clinical diagnostic information that cannot be obtained from any other test or combination of tests; and
   (iv) May include other assays.
(2) The test is cleared or approved by the Food and Drug Administration.


CMS further discusses the meaning of algorithm at 81 FR 41057ff (June 23, 2016).

That the analysis of the biomarkers 
must be ‘‘combined with a unique 
algorithm to yield a single patient- 
specific result’’ indicated to us that the 
algorithm must be empirically derived, 
and that the ultimate test result must be 
diagnostic of a certain condition, a 
prediction of the probability of an 
individual developing a certain 
condition, or the probability of an 
individual’s response to a particular 
therapy. Furthermore, the statute 
requires the result to be a single patient- 
specific one, so we proposed that the 
test must diagnose a certain condition 
for an individual, or predict the 
probability that a specific individual 
patient will develop a certain 
condition(s) or respond to a particular 
therapy. 

...Laboratories would have to 
submit to CMS evidence of their 
empirically derived algorithms and 
show how their test provides new 
clinical diagnostic information that 
cannot be obtained from any other test 
or combination of tests. 

...We considered the 
commenters’ suggestion to use only the 
exact statutory language and not define 
unique algorithm as we proposed to do. 
However, we do not agree with this 
approach for the following reasons. 
First, using only the exact language of 
the statute would leave the public 
without any specific guidance on how 
to interpret ‘‘unique algorithm to yield 
a single, patient-specific result,’’ and 
would leave us with no criteria by 
which to evaluate whether a test meets 
that requirement. Second, without such 
criteria, the requirement that a test have 
a ‘‘unique algorithm to yield a single, 
patient-specific result’’ would be, to 
some extent, self-determined by each 
laboratory requesting ADLT status. 
Without specific guidance, the 
laboratory seeking ADLT status would 
interpret the requirements under 
criterion A in whatever manner it chose, 
which could potentially vary depending 
on the test, and which could also vary 
from other laboratory interpretations. 
Third, if not further defined, the 
criterion could apply very broadly to 
nearly any test on the CLFS that is only 
done by one laboratory, which would be 
inconsistent with our view that ADLTs 
are innovative tests that are new and 
different from any test already on the 
market. Therefore, we believe it is 
necessary for us to interpret what it 
means for a unique algorithm to yield a 
single, patient-specific result, and to use 
that interpretation in establishing the 
requirements a test must meet to qualify 
as an ADLT. Additionally, as noted 
previously in this section, we are 
revising criterion A of the definition of 
an ADLT to include protein-only tests. 
However, we continue to have concerns 
about granting ADLT status for protein- 
only tests that are not advanced tests. To 
that end, we believe our proposed 
application of the unique algorithm 
requirement ensures that simple protein 
analyses would not be considered 
advanced tests as they are not likely to 
produce a patient-specific result that 
cannot be provided by any other test. 
For the reasons discussed previously 
in this section, we are finalizing our 
proposal for the unique algorithm, and 
will reflect it in the definition of ADLT 
under criterion A as proposed. 

PAMA final rule fact sheet

Medicare also has an ADLT application form that involves reporting and describing the algorithm, but doesn't add anything to the definition of algorithm, it just repeats the language seen above.



(C) AMA CPT Definition of Algorithm (MAAA)

"In contrast to genomic sequencing procedures and other multi-analyte assays, the assays in the [AMA CPT MAAA section] represent algorithmically combined results of analyses of multiple analytes to obtain a risk score or other value which in itself represents a new and distinct medical property of independent medical significance relative to the individual component test results in the clinical context in which the assay is performed.  ...Typically reported as a numeric score as or as probability.   MAAAs are typically unique to a single laboratory or manufacturer.