Friday, December 5, 2025

Freenome - Keeping On Top of Its Announcements (SPAC, More)


Freenome made a big splash in 2019, when it closed a sizable $160M funding round as its Series B (here).  Now, December 5, 2025, there were a number of announcements and documents - let's catch up with recent Freenome news.

First, in June 2025, Freenome had a JAMA publication for blood-based CRC screening that met CMS coverage requirements under the CRC screening NCD.  Here.  See Shaukat et al. here.

Second, in August 2025, Freenome announced an exclusive license agreement iwth Exact Sciences, for Freenome's colorectal cancer blood-based screening test.  Here.  Freenome framed the deal as "worth up to $885M" including milestones.

Third, in mid-November, Freenome announced another exclusive agreement, this one with Roche and for out-side-the-US test commercialization.  Here.   This deal was framed as "worth $200M plus" and increasing Roche's investment in Freenome via a "$75m equity instrument."

Next, on December 5, 2025, Freenome announces an agreement to make a business combination (i.e. to take Freenome public0 via a SPAC-type mechanism.  Here.  The package involves Freenome, PCSC (Perceptive Captial Solutions Corp) and PIPE investors.  Completion is "first half of 2026" and the ticker will be FRNM.  The $240M value includes $90M held in PCSC currently.

The deal involves: "The PIPE is led by Perceptive and RA Capital with participation from ADAR1 Capital, Bain Capital Life Sciences, Farallon Capital Management, as well as other new and existing leading healthcare investors."

##

See early coverage at Fierce Biotech.  At STAT+.

##

The PCSC K-8 announcement is online at SEC - here.  

Scroll to the bottom and there are 8 additional links - one of which is a new investor presentation (deck) which is 51 pages long.   The deck also has data on Freenome's CRC V2 test - see e.g. page 13.

See also a detailed business combination agreement - here.

51-page deck online at SEC




Thursday, December 4, 2025

Prolific at Linked In: Jose Pereira Leal (Diagnostics Strategies)

 Jose Pereira Leal is a prolific author at Linked In:

https://www.linkedin.com/in/pereiraleal/

See e.g. his June essay, "Lessons from the validation trenches of biomarker development,"

https://www.linkedin.com/pulse/from-promising-proven-lessons-validation-trenches-jose-pereira-leal-jh2ff/

He has a new pair of articles, "Rebuilding the Case for Diagnostics Investment," parts 1 and 2.

Part 1

Part 2

Part 1 opens like this:

The diagnostics sector faces a paradox: we're living through a precision medicine revolution, yet the tools that make precision medicine possible remain chronically underfunded.

In 2023-2024, diagnostics captured just $2.2 billion in global venture funding, while AI companies raised over $100 billion globally in 2024. Even within healthcare, nearly 30% of the $23 billion in US healthcare VC funding went to AI-focused startups, leaving diagnostics fighting for scraps.

Why does the market avoid a sector that underpins every major advance in modern medicine?

The Perfect Storm of Disincentives.... 


####

He is also author of the book, Precision Diagnostics [views from the trenches].



###
AI CORNER
###

Chat GPT 5 summarizes "Building the Case - Investments in Dx" Parts 1 & 2.

####

Below is a ~400-word integrated summary of both essays for graduate-level readers of your diagnostics strategy blog, synthesizing Part 1 (entrepreneur perspective) and Part 2 (investor perspective).


Summary (≈400 words)

The two essays argue that diagnostics are systematically undervalued, not because they generate weak economic returns, but because entrepreneurs and investors apply frameworks borrowed from biotech, SaaS, and medtech that misinterpret the category’s timelines, value drivers, and risk profile. Diagnostics occupy an unusual middle ground: development cycles of 7–10 years, regulatory complexity (IVDR, FDA, CLIA), and reimbursement friction make them slow to scale, yet their commercial upside rarely achieves drug-like revenue multiples. Because venture models are calibrated for either hyper-scaling software or blockbuster therapeutics, diagnostics appear to suffer from “ugly duckling” economics.

The author argues this perception is outdated. Precision medicine is producing captive markets for companion diagnostics, validated datasets create defensible assets, regulatory complexity functions as a barrier to entry, and high-value diagnostics can support premium reimbursement when positioned as clinical decision infrastructure rather than commodity testing. Additionally, risk-adjusted returns compare favorably to pharma: diagnostics require 1/10 the capital and offer higher hit rates with shorter cycles to revenue, even if individual exits are smaller. This creates a genuine arbitrage opportunity for disciplined capital.

Part 1 offers strategic guidance for founders: build with pharma rather than parallel to it; treat data as the product, not exhaust; embrace regulatory barriers as moat; price based on clinical and economic impact, not cost-per-test; and build platforms that enable expansion of indications and revenue streams. The central thesis is that diagnostic businesses should be understood as infrastructure for precision therapeutics, rather than isolated products.

Part 2 shifts to an investor framework, arguing conventional staging models fail because they focus on validation checkpoints rather than business model de-risking. The standard linear progression—analytical validation, clinical trials, regulatory approval, commercialization—ignores the much harder work of market adoption, including guideline inclusion, physician behavior change, reimbursement, workflow integration, and payer contracting.

The author proposes diagnostics-specific evaluation criteria based on explicit business model archetypes (single-test, platform, data-as-product, companion diagnostic) and on identifying and de-risking 3–4 core assumptions that determine value creation. Investors should intentionally structure portfolios to leverage technology, data, commercial, and evidence-sharing synergies, and provide ecosystem-level capabilities in regulatory strategy, clinical evidence architecture, payer engagement, pharma partnerships, and health-system integration.

Ultimately, the essays contend that diagnostics are mispriced assets, not weak assets, and that founders and investors who adopt category-specific strategies can exploit a major market inefficiency as precision medicine becomes standard of care.


If you’d like: a shorter “executive version,” a more polemical version for Substack, or a version with takeaway bullets for board presentations, I can tailor it.

Tuesday, December 2, 2025

Senator Escalates Concerns about AMA "Monopoly" (Coding)

On December 2, 2026, Washington Post features a story on Sen. Cassidy's escalating tensions with AMA, regarding coding and the RVU payment system.  The Senator kicks off by asserting that AMA's response to an October 6 letter "was anything but open and transparent."

  • See our October 29 blog on this topic here.
  • See updates, December 2 at Washington Post,here.
  • See the new 5-page Senate letter to the FDA, dated December 1, here.
    • Tangent: Negative article in WSJ about ABMS American Board of Medical Specialities, here.

AMA Summit on Digital Medicine

The exchanges come as AMA is on the brink of holding a major summit meeting in Chicago, December 8, on the future of new technologies coding and reimbursement, covering digital medicine, digital pathology, and AI.   More here.

CMS Innovative Work-arounds for Digital Reimbursement

And the letters, and that AMA meeting, come just as CMS announces its CMMI "ACCESS" model, under which some new, FDA-approved software-based or software-intensive interventions like remote monitoring will be reimbursed directly by Medicare as part of its new comprehensive approaches to chronic disease management, potentially outside the usual CPT coding channels.  Entry point here.


Monday, December 1, 2025

El-Khoury & Zaatari: Pathologist, AI, and the Future. Plus lots of great citations.

I probably saw this post via someone at Linked-In, but I've mislaid how I heard about it.  

Worth reading, a new open-access paper, which projects into the future and asks if pathologists will be "partners" or "bystanders" to AI.

Find the September 2025 paper by El-Khoury and Zaatari online at Diagnostics, here:

https://www.mdpi.com/2075-4418/15/18/2308

In addition to the main story, the article offers an excellent bibliography of nearly 100 references, some of them hard to find (history of microscopes), many others up-to-date through 2025.


####

Sidebar:
I asked Chat GPT to compare the history of autopilots in airlines (1940-2025) to the future of pathologists in the AI lab (2025-2050).  Here.

###

AI CORNER

###

El-Khoury and Zaatari provide a sweeping, historically anchored analysis of how digital pathology and AI are jointly reshaping diagnostic practice, culminating in the provocative question of whether pathologists may eventually become “bystanders” in workflows they once wholly governed. They trace the discipline’s evolution from early microscopy and microtechnique innovations to contemporary whole-slide imaging (WSI)—establishing digital pathology as the essential substrate upon which AI systems now depend. This historical framing underscores that AI represents not merely another tool but a structural inflection analogous to the rise of cellular pathology itself.

Communications Expert Assesses Trump-Mamdani Conference, Line by Line

On YouTube, communications expert Chris Miller goes through the Trump-Mamdani Oval Office meeting and describes his view of how each politician handled framing, seizing initiative, dodging conflict, etc.

You don't have to buy into every single idea the communications expert has, to benefit from this magnifying-glass view of the dialog.    Watch it online - 15 minutes - or I've included a transcript below.

https://www.youtube.com/watch?v=Ju0URMztrzs


####

Transcript from Rev.com from link.

Chris Miller:

Okay, no one would expect this, but President Trump and New York City Mayor like Mamdani just met in the Oval Office at the White House. And the presentation they just gave to the media and the question and answer portion was surprising.

 

LegislationWatch: Proposed: Bill for Alzheimer Blood Testing in Medicare, H.R. 6130

Legislation watch:  A bill is introduced which would cover preventive screening with blood tests for Alzheimer's disease.   

The legislation -as proposed - would create a new benefit at 1861(s)(2), under KK, Alzheimer early detection test (follows the recently added JJ, lymphedema compression services).  And (nnn) defines these as proteomic, genomic, etc - very broadly. 

###

See also this week:

JAMA Meta-Analysis of Tau217 plasma diagnostics, Malek-Ahmadi et al.  

JAMA Op-Ed, 'Blood Tests for Alzheimer Disease - What to Do with the Holy Grail' by Grill.

###

Repr. Buchanan (R-FL) had early publicity November 7 at AXIOS - here.

See the November 19 press release about the bill - here.

Read the bill posted at Congress.gov as HR 6130 - here.


##

Humor: When Medicare Pays for a Covid Test / Nursing Home

From time to time I have work related to Medicare's 14-day-rule, which is difficult to explain even with graphics and charts.

This looks like comparable complexity: When does Medicare pay for a nursing home Covid test?   Sit down and take your hat off, this will be a while.


See link for several pages of additional explanation.
https://www.cms.gov/files/document/covid-medicare-payment-covid-19-viral-testing-flow-chart.pdf

Saturday, November 29, 2025

Noted: Luis Cano's Essay on "Invisible War in Digital Pathology"

 Luis Cano MD PhD is a Paris-based expert on digital pathology.  Find his Linked in here.  His article feed here.   His Substack articles, "Beyond the Slide," here.

His new 5000-word mega-essay about digital pathology system dynamics:

https://beyondtheslide.substack.com/p/the-invisible-war-in-digital-pathology

By the way, the bibliography of his new article is quite impressive too.

Enjoy the original essay but here's a 300 word summary (AI):

Digital pathology, Cano argues, is less a neat “digital upgrade” and more an invisible war: a messy, protracted collision between technology that already works and systems that are nowhere near ready to absorb it. The microscope era was stable, tactile, and culturally entrenched; digital workflows turn glass into data, demanding scanners, clouds, networks, standards, and cybersecurity. 

COVID accelerated adoption by necessity, proving feasibility but also exposing fragile infrastructure and improvisational workflows, especially in low-resource settings where digital tools could help most but basic prerequisites—power, bandwidth, capital—are lacking. The result is a tug-of-war between an analog world that won’t die and a digital one not yet fully born.

The conflict is driven less by algorithms than by misaligned incentives and timelines. Startups sprint on 18-month venture clocks; hospitals move on 5–10-year cycles; pathologists, as final signatories, face an identity and liability crisis. 

Economics form a central minefield: capital costs are huge, ROI is mostly indirect efficiency, and reimbursement for digitization or AI is nascent and fragmented. Technologically, proprietary formats, weak interoperability, domain shift, and brittle real-world performance keep AI stuck in “demo mode.” Regulatory fog deepens the tension: the FDA’s PCCP and the EU AI Act try to tame evolving, data-hungry models with frameworks built for static devices, while liability for AI-driven errors remains unclear.

Cano’s core thesis is that progress hinges on alignment, not more clever models. He points to federated and swarm learning, shared infrastructures like BigPicture, and human-centered design as early blueprints for cooperation. The future pathologist becomes an integrator of multi-modal information, not a human scanner; AI should amplify rather than replace. The “war” ends, he suggests, when stakeholders stop behaving like rival armies and start acting as architects—building standards, economic models, regulations, and lab designs that are interoperable, explainable, and explicitly human-centered.

Not Bad for a Machine: Chat GPT Offers to Review CMS & AI for Me

For almost three years, I've had a $20 a month subscription to Chat GPT.  Like other AI's, the home page me offers me topics for the AI to discuss (as if I could think of none, myself?)

This morning the home page of Chat GPT offered me:

  • What are the latest CMS policy updates on AI reimbursement and digital health? Any new regulations or pilot programs worth noting?

I thought, OK, it's a holiday, I'll bite.   

Here's what I got.  

NOTE: I would not necessarily make the same recommendations or emphasize the same things as Chat GPT.  What follows is offered only as an example of automated internet research and automated conclusions and summaries.

I asked it about turnkey venders for remote monitoring; in that section, I've stripped the websites it found but left the AI text.

Remarkable Series of Articles on Digital Medicine from Flavio Angei (Linked In)

I've started noticing the rapid flow of articles highlighted every week by Flavio Angei at Linked-In.

Find his home page here:

https://www.linkedin.com/in/flavio-angei-b5476841/


This should take you to his Linked-In postings:

https://www.linkedin.com/in/flavio-angei-b5476841/recent-activity/all/

He highlights top papers in digital medicine from a wide range of journals.

  • Evolving health technologies: Aligning with and enhancing the NIH Care Excellence Standards Framework.
  • Success factors for sclaing patient-facing digital health technologies: Leaders' insights
  • Navigating regulatory challenges across the life cycle of SaMD
  • LSE: Evaluation framework for health professionals' digital health and AI technologies.
  • Rethinking clinical trials for emdical AI with dynamic deployments of adaptive systems.
  • AI policy in healthcare; A checklist-based methodology for structured implementation.
  • Artificial intelligence in key pricing, reimbursement, market access processes.  Faster better cheaper - Can you really pick two?
  • Systematic review of cost effectiveness and budget impact of AI in healthcare.
  • Commercialization of medical AI technologies: Challenges and Opportunities

Etc etc etc....


___

Goranatis et al. Weigh In on "Value & Valuation" of Genomics

  • First, updating some links on new reviews of MCED.  
  • Then, we look at a new paper by Goriatis, Buchanan, et al in Nature Medicine on valuation of genomics in healthcare.

###

Reviews of MCED come out regularly in major journals; here is the latest one.  

See the latest in Annals of Internal Medicine, Kahwati et al. (November issue; ahead of print 9/16/25).   Sponsored by AHRQ, it comes with an op ed by Weinberg.  See the May 2025 AHRQ output, by Kahwati, at 139pp - here.

I think most of us are used to seeing "MCED" - Multi-cancer early detection.  These articles are headlining with "MCDT" - Multi-cancer detection tests.

####

I'd put those articles in context of a major new paper by a health economics team on "determining the value of genomics in healthcare."  See the home page here:

https://healtheconomicsandgenomics.com/

And see Goranitis et al. in Nature Medicine, dateline November 27:

https://www.nature.com/articles/s41591-025-04061-3

Below, find Chat GPT 5 on Goranitis and on Buchanan, Goranitis.

Tuesday, November 25, 2025

CMS Issues "Request for Information" - Strategic Directions for Medicare Advantage

 CMS has issued its CY2027 proposed rule for Medicare Advantage.  It includes a "request for information" about future strategic directions for the program.

###

CMS issues four major Medicare rules each year.  In the spring, we have the Inpatient Rule, which finalizes in August, ahead of the October fiscal year.  In the summer, we have the Physician and the Hospital Outpatient rules, which publish November 1, ahead of the new calendar year.

And around November, we get the Medicare Advantage proposals, which finalize in the spring, and of the next MA contract year.

Find the MA press release here:
https://www.cms.gov/newsroom/press-releases/cms-proposes-new-policies-strengthen-quality-access-competition-medicare-advantage-part-d

Find the fact sheet here:
https://www.cms.gov/newsroom/fact-sheets/contract-year-2027-medicare-advantage-part-d-proposed-rule

Find the actual proposed rule here (paginated publication on 11/28):
https://www.federalregister.gov/public-inspection/2025-21456/medicare-program-contract-year-2027-policy-and-technical-changes-to-the-medicare-advantage-program

###

The word "coverage" occurs 726 times, but I don't see the words LCD or NCD this year. Prior Authorization 17 times, denial 3 times.  Artificial intelligence, twice.

The request for information on "Future Directions in Medicare Advantage" starts on inspection copy page 6-11.  

Comment to January 26, 2026.

Big News: FDA to Down-Classify Many Companion Diagnostics as Class II (510k)

Last year, when FDA was sparring with stakeholders and courts over its LDT regulations, FDA promised to downclassify many types of diagnostics from Class III to Class II.   They went radio-silent from April to November, but now, the regulation is in print.

This is big news because it changes the landscape of how hard it is to get an FDA label as a companion diagnostic.  It also means that new ranges of tests will qualify for Medicare benefits.  NCD 90.2, for NGS testing in cancer, automatically covers NGS tests that are "cleared or approved" as CDx.   And sole-source tests (run from one lab) are eligible for ADLT pricing rules if they are "cleared or approved."   Now the range of "cleared" tests will be larger.

See an early essay at Linked In by Karin Hughes PhD here.  A 5-page PDF from AgencyIQ here. By Lawrence Worden here.  At Genomeweb here.  Kahles et al. review EU and US IVD regulations - prior to this FDA change - here.

See the Fed Reg regulation proposal here.  Comment in 60 days until January 26, 2026.

The rule runs 14 pages and covers many considerations and details.  The regulation for 510K aka Class II CDx will be at 21 CFR 866.6075, as “Nucleic Acid-Based Test Systems for Use with a Corresponding Approved Oncology Therapeutic Product.”  Within the 14-page publication, the actual regulation at 21 CFR will be about 680 words long (two full columns of the Federal Register).


###

AI CORNER

###

FDA Down-Classifies 
Key Oncology Companion Diagnostics:
A Policy-Level Summary

In a significant regulatory shift, FDA has proposed reclassifying a cluster of oncology companion diagnostics (CDx) and CDx-adjacent molecular tests—from Class III (PMA) to Class II with special controls. The 14-page notice marks FDA’s first broad structural change to CDx oversight in more than a decade and reflects the agency’s conclusion that these technologies are now mature, well-characterized, and manageable within the 510(k) framework.

Rationale for Reclassification

FDA’s justification rests on two main pillars:

Bipartisan Policy Center and Medicare: They Can't Stop Writing

I ran across five recent documents from the Bipartisan Policy Center on Medicare reform.  


If you like this try also "Committee for a Responsible Federal Budget."
.
###

AI CORNER

###

Chat GPT5/ Here’s a structured take on the three groups you asked for.


1. The 54-page white paper (N0): Strengthening Primary Care: Medicare Physician Payment and Related Reforms

Big frame.
The report reframes Medicare Part B reform explicitly as primary-care policy and not just fee-schedule engineering. It opens with the now-familiar BPC storyline: chronic disease is driving unsustainable Medicare spending; the U.S. underinvests in primary care (5–8% of spend vs ~13% in peer countries); and Part B is both the problem child and the lever for change. The chart on page 5, showing Part B rising from ~$231B (2011) to a projected $1.17T (2034), is doing a lot of rhetorical work here: Part B is presented as the largest and fastest-growing piece of Medicare, and therefore the natural focus for sustainability policy.

Diagnosis: three intertwined failures.

  1. Misaligned incentives that keep clinicians in FFS and out of APMs.

    • MACRA’s APM bonus is phasing out; the remaining differential in conversion-factor updates is too small to matter.

    • APMs demand upfront investments and operational changes that are especially hard for small and rural practices, and hybrid payment (APCM codes, partial capitation) is underdeveloped as a bridge.

    • Integration of primary care with specialty and behavioral health is a key ambition but underpowered in existing models.

  2. Structural undervaluation of primary-care work in the MPFS and lack of data.

    • CMS is depicted as overly dependent on RUC survey data and specialty-dominated recommendations; empirical data on time, intensity, and resource use are too thin.

    • There is no consistent federal definition or tracking of “primary-care spend” across programs, making target-setting and accountability almost impossible.

  3. Crippling administrative complexity, especially in APMs.

    • Measure clutter, unaligned quality metrics, and non-interoperable EHR requirements are framed as primary reasons clinicians stay in or drift back to plain FFS.

Solutions: what’s materially new in BPC’s thinking.

The report’s recommendations are not just “more ACOs” but a package that tries to rebalance FFS, APM incentives, and primary-care infrastructure:

  • Rebuild the APM incentive structure, not just extend it.
    The report calls for extending and restructuring the Advanced APM bonus, with an explicit shift toward prospective, per-beneficiary, risk-adjusted payments rather than all-or-nothing thresholds based on total Part B revenue.

  • Create a formal HHS advisory body on MPFS valuation.
    This is one of the clearest “new” institutional proposals. BPC wants a FACA-governed advisory body inside CMS to complement (and de-bias) the RUC by:

    • relying more heavily on empirical data (claims, EHRs, time-motion studies),

    • prioritizing primary-care and care-coordination services for review, and

    • systematizing identification of misvalued services.

  • Track and eventually set targets for primary-care spending.
    HHS would define “primary-care spending,” report it across federal programs, and use that to inform policy targets—essentially building the same infrastructure states like Rhode Island built for commercial plans, but at the federal level.

  • Align quality measurement and reduce reporting load.
    The report explicitly backs convergence of measures across Medicare, Medicaid, and private payers, using Medicare’s agenda-setting role to force simplification rather than adding yet another measure set for each model.

  • Support hybrid and prospective primary-care payments.
    It highlights new APCM codes as a step toward hybrid models but warns that if valuation and beneficiary cost-sharing aren’t addressed, they will be marginal rather than transformative.

Net effect: the 54-pager is BPC’s “integrated theory” document. It ties Medicare sustainability, primary care, APM design, and MPFS reform into a single policy program, with primary care explicitly cast as the system’s leverage point rather than just another stakeholder.


2. N1, N2, N3 in sequence: the three-brief policy staircase

The three briefs function as a stepwise argument: N1 = problem + history; N2 = barriers; N3 = actionable recommendations. Read together, they show BPC tightening from broad concern about MACRA’s underperformance to a concrete legislative/regulatory agenda.

N1 – The Need for Medicare Part B Physician Payment Reform (Issue Brief #1)

This brief sets up the macro problem and the political economy:

  • MACRA hasn’t delivered on its promise.
    It walks through the SGR era, the annual “doc fixes,” and MACRA’s intent to move clinicians into APMs via the QPP (MIPS vs Advanced APMs). Then it shows that FFS remains dominant, and MACRA’s formula continues to generate unsustainable cuts that require yearly congressional patches.

  • Part B spending is the pressure point.
    N1 reprises the chart showing Part B at ~49% of Medicare benefit outlays in 2023 and growing at ~9% annually through 2034. It emphasizes that this growth is not clearly associated with measurable gains in quality or outcomes, and that beneficiaries are bearing higher premiums and deductibles.

  • Political alignment.
    Bi-partisan concern is flagged explicitly: both parties accept that the current “yearly patch” dynamic is untenable, and both profess support for increasing APM participation and primary-care strength.

Functionally, N1 is BPC’s case memo to Congress: it validates the sense of crisis, documents MACRA’s structural flaws, and primes the reader to accept that something bigger than annual patches is now required.

N2 – Key Barriers to Clinicians’ Participation in Promising APMs (Issue Brief #2)

N2 dives into why APMs aren’t scaling, organizing barriers into three clusters.

  1. Misaligned incentives and a flawed bonus design.

    • Expiring Advanced APM bonus; dwindling differential in conversion-factor updates.

    • All-or-nothing thresholds (≥35% of Medicare patients or ≥50% of Part B revenue through an APM) that can punish clinicians who are part-way through the transition.

    • Bonus amounts keyed to total Part B revenue rather than the population actually in the APM—advantaging large, high-volume systems and doing little to reward marginal high-value care.

  2. Fee-schedule misvaluation and its drag on APMs.
    The brief explains how APMs sit on an MPFS “chassis,” so undervaluation of primary-care and care-coordination codes flows directly into ACO and other model economics. It highlights the lack of robust empirical data and CMS’s reliance on RUC survey data as core technical obstacles.

  3. Fragmented APM landscape + MSSP structural issues + admin burden.

    • Multiple overlapping models with shifting rules.

    • MSSP benchmarks that “ratchet down” when ACOs succeed, discouraging continued participation.

    • Risk adjustment that under-captures the complexity and cost of high-need patients.

    • Quality reporting and EHR interoperability burdens estimated in the billions annually, which are particularly punitive for primary care and small/rural practices.

N2 is where BPC’s analytic voice comes through most strongly; it’s essentially a barrier taxonomy and sets up the logic for each of N3’s recommendations.

N3 – Recommendations to Modernize Medicare Part B Physician Payment and Related Reforms (Issue Brief #3)

N3 is the action menu that flows directly from N2’s barrier map.

Highlights (in roughly the order presented):

  • Rebuild the Advanced APM bonus.
    Extend the bonus (no lower than the 1.88% level) with no gap, then convert it to a flat, risk-adjusted per-beneficiary payment and drop the problematic patient/payment thresholds.

  • Create a CMS/HHS advisory body on MPFS valuation.
    Focus on empirical data, transparency, and systematic reviews of misvalued services; explicitly complementary to CMS’s proposed efficiency adjustments and expanded data use in the 2025 PFS rule.

  • Simplify and rationalize APMs, especially ACOs.

    • Elevate the most promising primary-care-focused models, particularly those using prospective payments.

    • Establish a permanent higher-risk MSSP track for “graduated” ACOs.

    • Fix benchmarking and risk adjustment (including using EHR data) to avoid penalizing successful ACOs and better capture high-need patients’ costs.

  • Attack administrative burden directly.

    • Implement and enforce a national data-exchange framework (e.g., CMS Interoperability Framework) for APM participants by a target date (e.g., 2028).

    • Align quality metrics across payers to move toward a unified reporting system.

  • Strengthen primary-care infrastructure.

    • Consolidate and streamline federal HIT and EHR support grants, with explicit attention to small and rural primary-care practices.

As a sequence, N1→N2→N3 shows BPC’s full theory of change: you fix MACRA’s incentive structure, clean up APM design, and simultaneously re-platform MPFS and primary-care infrastructure. The long N0 report is then a deeper dive on one pillar—primary care—inside this larger framework.


3. The two comment letters (PFS and OPPS): “live-fire exercises” of the framework

The PFS and OPPS comment letters are essentially where BPC takes the intellectual architecture above and tests it against real regulatory text. They show BPC applying the same themes—site neutrality, empirical valuation, primary-care support, digital health, and rural equity—to specific code proposals.

(a) OPPS/ASC rule comment (CMS-1834-P, Sept 15, 2025)

Core themes.

  • Site neutrality & volume control.
    BPC explicitly supports CMS’s use of OPPS volume-control authority to extend the 2019 “unnecessary volume” policy to drug administration in excepted off-campus PBDs, with a carve-out for rural sole community hospitals. They link this to their earlier recommendation for broader site-neutral payments for services safely furnished in multiple ambulatory settings, with savings partially reinvested in rural and safety-net hospitals.

  • Alignment with their 2023 Sustaining and Improving Medicare report.
    The letter repeats the argument that payment differentials between MPFS and OPPS drive consolidation and billing shifts that inflate total program outlays and beneficiary cost-sharing—essentially importing the “FFS chassis + misaligned incentives” critique into OPPS.

  • Rural Emergency Hospital quality measurement & SDOH.
    BPC backs CMS’s proposal to offer an eCQM access/timeliness measure as an alternative to the median ED arrival-to-departure measure, framing this as consistent with their earlier rural-health work. They also urge CMS to retain SDOH-1 and SDOH-2 measures, while acknowledging burden and urging ongoing stakeholder engagement—a nice example of their “pro-SDOH but administratively sober” posture.

  • Hospital price transparency.
    The letter supports CMS’s push for meaningful, accurate pricing data and explicitly invokes BPC’s prior 2020 transparency work on uniform data collection.

In short, the OPPS letter deploys the site-neutrality and rural-reinvestment planks of the broader agenda and ties OPPS policy back to Part B alignment and SDOH measurement.

(b) PFS rule comment (CMS-1832-P, Sept 12, 2025)

This letter is more tightly connected to the physician-payment and primary-care work, and you can almost read it as the “short regulatory version” of N0 + N1–3.

Key positions:

  • Practice expense RVUs and valuation methodology.
    BPC strongly supports CMS’s efforts to update PE methodology, use a wider range of empirical data, and better capture cost differences across settings. This is explicitly linked to their June 2025 recommendation for an HHS advisory body inside CMS to make the valuation process more empirical and transparent.

  • Telehealth services list.
    They endorse the proposal to permanently maintain all previously approved telehealth codes, including those added during the PHE, and to shift the review standard toward “can it be safely furnished by interactive telecommunications?” with strong program-integrity oversight. That aligns with their generic telehealth view: stable benefit design + clinical-appropriateness test + guardrails.

  • Direct supervision via two-way audio/video and “incident-to.”
    BPC takes a notably skeptical line on incident-to billing:

    • It argues incident-to makes quality and fraud oversight harder,

    • recommends prohibiting incident-to billing for any practitioner who can bill directly, and

    • at minimum urges targeted monitoring for telehealth incident-to claims, referencing pending Hill legislation on telehealth oversight.
      That is a relatively strong position and consistent with their emphasis on clear accountability and data specificity.

  • Efficiency adjustment and misvalued services.
    BPC supports CMS’s proposed efficiency adjustment to non time-based codes and again ties this to their call for an advisory body and more empirical studies for valuation. They explicitly encourage CMS to use automatic adjustments and systematic methods to identify and correct misvalued, high-growth codes.

  • Remote physiological and therapeutic monitoring (RPM/RTM).
    They back new codes that allow less rigid data-collection days and time blocks, arguing that clinically effective remote monitoring often requires only short bursts of data and largely asynchronous analysis. They then press for:

    • patient-selection and re-assessment requirements,

    • EHR integration and response-time expectations,

    • removal of geographic payment dampers for rural providers, and

    • richer claims data elements (device types, data type, ordering clinician) to support evidence generation and program integrity.

Across both letters, the through-line is clear: site neutrality + primary-care support + empirical valuation + digital innovation with guardrails. The comment letters show BPC in “reg-ops mode,” continuously reinforcing the intellectual scaffolding from N0 and the issue briefs, but translating it into very specific stances on CMS proposals.


Compare the big white paper 54pp with the triplet of smaller ones.

###

How the 54-page white paper differs from — and relates to — the N1/N2/N3 triplet

1. Scope and Purpose

  • 54-page report (N0):
    A comprehensive, integrated blueprint for modernizing Medicare physician payment through the lens of strengthening primary care. It addresses the entire ecosystem: MPFS valuation, primary-care underinvestment, APM structure, quality measurement, administrative burden, rural issues, and system-wide sustainability.

  • Triplet (N1/N2/N3):
    A modular, staged argument focused specifically on MACRA, APMs, and Part B reform mechanics.

    • N1: Why Medicare physician payment reform is needed.

    • N2: The specific barriers preventing APM adoption.

    • N3: Targeted, actionable recommendations to fix those barriers.

2. Intellectual Center of Gravity

  • 54-page report:
    Primary care is the central organizing principle. Everything else—APMs, valuation, interoperability, metrics—is framed as either supporting or inhibiting robust primary care.

  • Triplet:
    MACRA and the APM architecture are the center.  Primary care appears often, but as one part of the mechanics of Part B reform, not the conceptual anchor.

3. Policy Breadth

  • 54-page:
    Broad, system-level. Includes:

    • National primary-care spending targets

    • Federal advisory body on RVUs

    • Hybrid payments, APCM codes

    • APM redesign

    • Quality-measurement simplification

    • Interoperability and admin-burden reduction
      It functions as “the full blueprint.”

  • Triplet:
    Narrower and more tactical. Each paper takes one slice:

    • Problem definition

    • Barrier taxonomy

    • Recommended fixes

  • Together they form a policy staircase rather than a full system redesign.

4. Relationship Between the Two Sets

  • The 54-page report is the umbrella, giving BPC’s complete argument for primary-care-centric Medicare reform.

  • The three briefs are the technical spine of that argument: a concise MACRA/APM package that can be handed to Congress.

  • Much of the 54-page analysis absorbs and extends the triplet’s insights, embedding them in a broader narrative linking primary care, MPFS valuation, and long-term Medicare sustainability.

5. Use Case for Readers

  • 54-page: For senior policymakers who want the whole theory and the cross-cutting rationale.

  • Triplet: For Hill staff, budget analysts, and CMS policy teams who need quick, structured modules they can plug into legislation or rulemaking discussions.

####
Do they say much about "diagnostic tests" or the specialty of Pathology?
####

Short answer:
No — across all four documents (the long 54-page white paper and the N1/N2/N3 triplet), diagnostic testing and the specialty of pathology are almost entirely absent.
When they appear at all, it is brief, indirect, and framed only in relation to primary care, APMs, or valuation mechanics, not as a domain of its own.

Below is the concise landscape:


1. In the 54-page report (N0): almost no discussion of diagnostics or pathology

The long primary-care-oriented report focuses overwhelmingly on:

  • undervaluation of cognitive/primary-care services,

  • APM incentive structure,

  • quality measures,

  • interoperability,

  • site-of-service dynamics, and

  • rural primary care.

Diagnostic testing is nearly invisible.
It is mentioned only in passing when discussing:

  • practice expense data or equipment inputs in RVUs (as examples of CMS data sources),

  • the need for data-sharing between primary care and specialists,

  • general “tests” as part of patient management.

There is no direct commentary on:

  • the role of lab diagnostics in APMs,

  • reforming coding/payment of clinical laboratory services,

  • the specialty of pathology,

  • clinical lab economics,

  • laboratory contribution to primary care value.

Even when discussing undervaluation, the focus is on evaluation and management, not pathology or diagnostic services.


2. In N1/N2/N3 (the triplet): silence on diagnostics and pathology

The triplet makes no substantive reference to lab diagnostics, laboratory workflow, or the pathology profession.

Their analytic frame is:

  • MACRA history

  • the failure of APM uptake

  • the barriers to risk-bearing

  • the flaws of the MPFS physician-work valuation system

  • the need for empirical time/intensity data

  • quality-measure alignment

  • rural and small-practice participation

  • care-management and primary-care financing

When diagnostic testing is mentioned at all, it is only in generic phrases like:

  • “tests ordered by clinicians”

  • “services delivered under the fee schedule”

  • “misvalued services” (meaning E/M and procedural codes, not labs)

Pathologists and laboratorians never appear.
There is no discussion of:

  • pathology specialty payment,

  • diagnostic coding policies,

  • clinical-laboratory contribution to APM models,

  • pathology reporting burdens,

  • molecular diagnostics or precision medicine.


3. Comment letters (PFS & OPPS): still very little on diagnostics

Even here—where diagnostic policy might naturally arise—BPC does not engage with laboratory issues.

In the PFS comment letter:

  • They support CMS updating practice-expense RVUs, but only in the context of physician office practice costs.

  • They endorse telehealth expansions, supervision rules, RPM/RTM coding, and efficiency adjustments—none of which involve lab diagnostics.

  • No discussion of Part B laboratory services, molecular diagnostics, or CLFS.

In the OPPS/ASC letter:

  • They discuss drug administration, site neutrality, and price transparency—but not lab tests.

  • No mention of hospital outpatient lab payments, packaged lab services, or OPPS-specific molecular test rules.

In short: laboratory testing is entirely orthogonal to the policy agenda they are advancing.


Why this absence is notable

BPC’s entire project is built around:

  • sustaining Medicare,

  • strengthening primary care,

  • making APMs workable,

  • rationalizing MPFS valuation,

  • reducing administrative burden,

  • improving rural equity.

They frame the crisis and its solutions almost entirely through the lens of clinicians who deliver longitudinal, face-to-face care.
Pathology and laboratory medicine—which sit outside that direct patient-facing E/M world—are not part of the narrative.

In fact, BPC’s framework implicitly accepts the CMS view that:

health-system sustainability hinges on primary care and APM incentives,
not on the organization or valuation of diagnostic testing.


Bottom line for policy watchers

Across the entire set of documents:

  • Diagnostics and pathology = almost completely absent.

  • Primary care = the anchor point of the entire reform logic.

  • APM and MPFS valuation = the dominant technical concerns.

If you want, I can also give you:

  • (1) a quick analysis of why BPC leaves diagnostics out (structural, political, and narrative reasons),

  • (2) what this means for pathology’s role in upcoming congressional conversations,

  • (3) how diagnostic-policy issues could piggyback on BPC’s larger framework.

CMS Issues Final Lab Prices for CY2026

On November 25, 2025, CMS issued final lab test prices for new tests for CY2026.

###

They regularly come out during Thanksgiving week.   It's the new-test lab test prices for CY2026.

Find the annual meeting page here and scroll down to "Meeting Notice" section and then scroll down to CLFS Test Code Payment Determinations for CY2026 Final.

https://www.cms.gov/medicare/payment/fee-schedules/clinical-laboratory-fee-schedule-clfs/annual-public-meetings

Or this link should drop down the Zip file for you:

https://www.cms.gov/files/zip/cy-2026-final-payment-determinations.zip


What Happened

There were 93 agenda items, four of which were deleted from the process. Of the 90 active items, 75 were finalize as proposed and 14 were changed.   11 were changed from one crosswalk to another, 1 was changed from CW to GF, and two were changed from GF to CW.

20 codes go to "gapfill," all but onc was proposed as gapfill.  That one code switched from CW to GF (as just noted).

Of 59 codes crosswalked, most were crosswalked to a single code x1.   

Other crosswalks were fractional or multiple or additive.  Only one was a fraction, 0094U x.5 for 0583U.  I didn't see a positive fraction (like x1.25 or x1.5) which CMS nearly never uses.   Three crosswalks were additive (e.g. to Code 1 + Code 2).  There were a couple cases of crosswalk to a multiple (x2).  

One code, 0523U, Pillar CDx OncoReveal, was crosswalked to code 0022U minus 81449, the 'minus' function is extremely rare in crosswalks.  That's (23 genes, about $1900) minus (5-50 genes, RNA only, about $600).