Sunday, July 19, 2015

CMS Holds July 16 Public CLFS Meeting - Drugs of Abuse Codes and Genomic Procedure Codes

On July 16, 2015, CMS held its annual public meeting to discuss new codes for the Clinical Laboratory Fee Schedule.  This summer's meeting was attended by one of the largest audiences ever.

Topics included:

  • Implementing the PAMA authority to reprice the CLFS based on market prices of commercial insurers; 
  • How to price the Exact Sciences Cologuard test; 
  • How to price new genomic procedures such as exome sequencing; and 
  • How to code and price drug screening tests.
CMS has posted the entire workshop online at Youtube, and I have detailed speaker by speaker meeting notes on this blog.

Note that the most important topics discussed at the July 16 public meeting will be revisited by CMS's new expert advisory panel on lab test crosswalking and policy, on August 26 (here).

More after the break.

CMS Webpage
The CMS webpage for the summer public meeting is here.
The agenda for the day can be found in a PDF online at CMS, here.

The morning session is available on Youtube here.  The afternoon session here.
Between Thursday and Saturday, the morning session had racked up 600 views, the afternoon session 200 views.  By July 27, ten days, they had >1100 and >350 views, respectively.

I have extensive notes, what I call "running notes," which are informal notes I kept while listening to the full meeting. They are NOT a transcript.  Also, this is 23 pages of typed running notes, which I have not been able to proof for spelling.  Here.

Copies of Presentations
During the meeting, the chairman Mr. Glenn McGuirk offered to send presentations to anyone who asked; here is his email,  , and here is a Zip file in the cloud (16 mb, 27 items).

Brief Meeting Highlights

  • PAMA
    • CMS is continuing to work on rulemaking for PAMA 2017.  
    • CMS will release its interpretation and rules for PAMA test repricing "as soon as possible."   
    • CMS is also working on a high security website and data base through which labs can submit their private payer prices for lab tests.   
    • When asked if the launch of new prices on 1/1/2017 might be delayed, CMS responded that that could be a topic for public comment at the time the PAMA rulemaking is released (a time which is TBD).  
  • Exact Sciences Cologuard
    • A private party requested that CMS revise downward the price set last fall for the Cologuard colon cancer screening test.   (For one example of this party's position, here).
    • The developer, Exact Sciences, responded in detail that repricing was  inappropriate, as did several other parties.
    • CMS staff came to the microphone and queried both parties about the requester's comment that the direct cost (presumably COGS?) of the test was as low as $150.  
  • Genomic Sequencing Procedures
    • AMA CPT created a range of new codes for genomic sequencing procedures, such as exome sequencing, disease gene panel sequencing, and tumor somatic mutation panel sequencing.  These codes are currently undergoing a "gapfill" process at MAC contractors.  
    • However, last December, the AMP filed a motion with CMS requested that the type of pricing be converted to crosswalk pricing.  Therefore, at this meeting, as a matter of process,  CMS considers whether crosswalk pricing should be used (even though it is mid year of the gapfill year.)  
    • AMP presented detailed comments for objective pricing methods for genomic procedure codes.  For example, it demonstrated that one approach to pricing the 5-50 somatic mutation tumor code would give direct costs of circa $500-$1000.
    • AMP stated outright that its methods did not include indirect costs.  In the past, I have noted that for public companies like Labcorp or Quest, their direct costs or COGS are only about half of revenue minus profit, e.g. COGS are only about half of total costs for such labs. Or, revenue needs to be double direct costs.   For research-oriented companies in medtech, pharma, and other industries, COGS are usually a still smaller fraction of required total costs eg 20%.
  • Drugs of Abuse Testing
    • AMA CPT and CMS have sparred for at least five years over correct coding.  
    • Most recently, on 1/1/2015, AMA CPT introduced a whole new code set for drugs testing, meaning primarily drugs of abuse testing (pain clinics, addiction clinics, etc).   CMS is not using those codes in 2015.  Instead, CMS is using alternative G codes that reproduce a prior AMA CPT code set, that of 2014.  This summer, CMS further has proposed to replace the whole kit and caboodle of AMA CPT drug testing codes with only 2 codes, one for drug screening and one for confirmatory testing.
    • No one or almost no one supported the CMS proposal.  
      • AMA itself weighed in heavily that standard AMA CPT codes should be used. 
      • Other stakeholders agreed, OR, in some cases, supported use of a four-code set with tiered pricing developed by the Palmetto GBA program.   
      • At least four or five speakers supported "the Palmetto approach."    


For ACLA's backgrounder on PAMA 216 CLFS Reform, see here.

CMS Web Page Clipped Below:

Laboratory Public Meetings

Public Meeting for the Laboratory Payment for New Clinical Test Codes for 2016
Centers for Medicare & Medicaid Services Auditorium, Baltimore, MD

The Public Meeting for new Clinical Laboratory Fee Schedule services will take place on Thursday, July 16, 2015. We will accept public comments from that meeting for approximately 1 week. Then, we will determine the basis of payment (either crosswalk or gap-fill) and we will post the preliminary determinations on our web site in September, 2015. We will accept additional comments from these preliminary determinations through October, 2015. The basis of payment and the amount of payment will become final at the same time that we issue the annual CMS instruction for CY 2015 (approximately November). Then, the public has 60 days from the date we issue our annual instruction to request reconsideration of either the basis of payment or the amount of payment for these new test codes. And, the public may comment on any reconsideration requests at the next Annual Public Meeting. In addition, for any new test code that will be gap-filled, we ask our Medicare contractors to develop carrier-specific gap-filled amounts by April 1 of the following year. These amounts will then be finalized on September 30 of that year. Unlike a crosswalk test, the payment amount for a gap-fill test is not established when we determine the basis for payment because it takes approximately 9 months for our contractors to establish carrier-specific amounts. After these prices are developed by the Medicare contractors, we will post them on our web site and accept comments for 60 days after April 1 (not reconsideration requests, just comments). Later in the year, when the gap-filled payment amounts are posted on the web site as final, we will accept reconsideration requests on the gap-filled payment amounts for 30 days. Once the reconsideration process is completed for a cycle, the determination is final and would not be subject to further reconsideration.

If you plan to speak on the new codes, please provide your comments in writing to Glenn McGuirk at and indicate your desire to present on any or all of these topics when you register for the Annual Public Meeting

To discuss how the changing healthcare system and Medicare policy affects your company, association, or investments, contact Dr Quinn through FaegreBD Consulting