Thursday, October 16, 2014

My Talk at Harvard

On Friday, October 17, I had the opportunity to give a talk on genomic medicine policy in the U.S. at Harvard (Brigham & Women's Genomic Medicine seminar series.)   The deck I presented is here.(Click on the small black down arrow to download).

While the slides are meant to be spoken to and not just read, my "Prolog" is that in a traditional business, you design a product and use sales and marketing to transfer it to customers, and if they like it and want it, you get return on investment.   In healthcare, and especially in molecular diagnostics, there are many diverse policy headwinds that make this process more complex and circuitous.

The rest of the deck talks about the transition from molecular stack codes to today's CPT coding and pricing and future PAMA market-based pricing.

I give some examples of potentially shifting business models - while also noting that one man's barriers to innovation are another's protections against excess cost and overutilization.   As an example, should out-of-network payment policies for startup labs become onerous enough, there will be more incentive to create on site hospital-based delivery systems, because the hospital is (almost) always in network for its own patients.  My point from an MBA perspective is that this "policy based" market force (starve out-of-network labs) may intersect and synergize with new technologic capabilities (e.g., FDA's approval of Prosigna.)

Along the way, I cite the excellent Harvard Business School case study from 2013 by Robert Higgins on Claritas Genomics (here).  The last few slides discuss approaches to clinical utility that my coauthor Felix Frueh and I have worked on (here).

Thursday, October 9, 2014

CMS Releases Prices for New CPT CLFS Codes - Gene Panels Get Gapfill

On October 9, 2014, CMS released its pricing decisions for all new CPT laboratory codes that will be active in 2015.

It finalized its proposed in on November 25, 2014.

The CY2015 Excel spreadsheet fee scheduled, released about January 1, 2015, is at the CMS website, here.  (See:

* Drug testing codes - use by Medicare is deferred, as is pricing by Medicare.
* Genomic tests - gapfilled.
* Exact Sciences ColoGuard - $502.

Codes were finalized by CMS as proposed.  Final CMS positions are posted here.  

Note that for specific drug tests, CMS produced some two dozen new G-codes to use, replicating 2014 CPT codes, instead of using new 2015 CPT codes. 

Details after the break.

Thursday, October 2, 2014

FDA and LDT’s: Should it be "Guidance" or "Regulation"?

Since a public meeting in 2010, the FDA has been discussing its plans to bring laboratory tests at local hospitals and laboratories under its scope of regulation.   This activity escalated quickly with the release of a planned regulatory framework to Congress on July 31, 2014, and the official release of the same documents on October 3, 2014, kicking off a 120 day public comment period (here).

On September 9 (here), the House Ways & Means committee held a hearing on the proposed new scope of FDA activities.  In that hearing, some lawmakers and public stakeholders repeatedly suggested that the FDA should undertake these activities only after formal federal notice & comment rulemaking.   But Dr. Shuren of the FDA repeatedly emphasized that the FDA had solid legal grounds allowing it to regulate laboratory developed tests by issuing and finalizing a “guidance document.”  

What would really be gained by the rulemaking process?   
  1. For one thing, for regulations proposed that would have a greater than $100M economic impact, a formal budgetary analysis must be made by the agency and reviewed by the Office of Management and Budget.   
  2. For another, new regulations (law made by an agency and codified in the Code of Federal Regulations) would be proposed, open to comment, and then finalized verbatim and rarely changed.  
  3. Finally, policies that are related to, but not literally laid down in the C.F.R. regulation would also be presented  and generally followed by the agency until changed through another round of agency proposal and public comment.  

We discuss the FDA LDT proposals from this perspective after the break, borrowing some analogies from CMS regulations and policy and from the FDA formal rulemaking for Analyte Specific Reagents (ASRs) in 1996.

Wednesday, October 1, 2014

A Critical Look at "Choosing Wisely" - But it's not Today's NEJM.

Update 10/2017:
  Health Affairs "festival" on Choosing Wisely held in DC, here.
  Example of later quantitative health services article by Colla (2017), here.
  3 October 2017 Articles in Health Affairs here, here, here.

On October 2, 2014, the New England Journal published an article on reducing low value healthcare, one of the approaches being the Choosing Wisely campaign.

Unfortunately, the author did not have the time and space to cite another New England Journal article on Choosing Wisely - one that I read with enthusiastic agreement, because that earlier article encapsulated what I'd been telling colleagues and friends for a couple years as I've read press about Choosing Wisely.  The earlier article is open access and worth looking up.