Monday, May 28, 2018

Medicare's Obscure New Requirement to Report "All FDA Cleared or Approved Tests" (???)

Reading through California Clinical Lab Association meeting minutes this month, I ran across a truly unusual entry that had escaped my attention, and that I hadn't seen mentioned elsewhere.   It requires reporting of "all new cleared or approved laboratory tests" to CMS.  Note that this process is entirely separate from the ADLT process.  It sounds like even a cleared or approved sodium test would have to be reported, if I read it correctly. Wacky?

Where This Odd Document Is Found

  1. CMS has a home page that is an entry point for all its CLFS related webpages and documents.  Here.
  2. CMS has a link on the left side to PAMA REGULATIONS.   That takes you here.
  3. PAMA regulations is an increasingly lengthy webpage.   The first section (as of May 28) discussed recent PAMA-based pricing results, including filling in missing PAMA values by gapfill.
  4. The next section requests nominations to the Medicare Advisory Panel on Clinical Diagnostic Laboratory Tests.  OK.
  5. There follow some document links about the PAMA collection process (e.g. how-to guides).
    1. ADLT stuff.  Finally, near the bottom of the PAMA web page, you get to a small naked link that takes you to the ADLT pages.   Here.   When CMS released ADLT application forms and guidance this spring, that got a fair bit of attention.   CMS also recently announced that it had completed the application review for the very first ADLT, the Foundation F1 CDx test, which will become an active ADLT on July 1, 2018.
  6. OK, let's be sure you are still on the home page for PAMA regulations here.   
  7. There is a link called, "Notification to CMS of an FDA Cleared or Approved Clinical Diagnostic Laboratory Test."    That's the one that surprised me today.   Here.
  8. Now you should be on a short web page with the same title (Notification of...).  I'll clip the text below but basically it is a couple paragraph of text asserting that PAMA (now SSA 1834A) requires CMS to "ensure" that unique HCPCS code is assigned to a laboratory test cleared or approved by FDA.   (I had always assumed that CMS could create such codes on request).  CMS says that "a laboratory or manufacturer, that is, a notifying entity" MUST NOTIFY CMS of ANY cleared or approved laboratory test [unless already notified via the ADLT process].  
    1. Usually the notifying entity would be a manufacturer since the great majority of FDA authorized lab tests are IVDs from a manufacturer.   
  9. In review, what you've got for these instructions is one web page here and one PDF document here.
It seems to me CMS could accumulate an awful lot of G codes for every newly approved sodium or potassium test, let alone genetic or other complex tests.   I assume there will be "more to come" on this topic as it rolls out in the Advamed/IVD and Lab communities.

Up til now, I thought that PAMA allowed applications for PLA or G Codes for FDA cleared or approved tests, but did not require them.  Seems odd if a lab would need to submit, for example, its sodium test claims on three different G codes if they were done variously on three different brands of analyzers, e.g. three different FDA cleared tests.  

Note, an alternate interpretation and a simpler one is that the FDA cleared or approved test merely needs "A" unique HCPCS code, so sodium tests do have a "unique" code, at least, for being a sodium test per se.    If this is the correct interpretation, then CMS is just trying to avoid use of unlisted codes for any and all new FDA tests.  I'm not sure that's what they mean, though, especially looking through some of the back-documentation as cited below.  They require "a unique level I code" and there would be easier ways to describe what they want, such as by examples.  Even in this case, it sounds like you'd still have to notify CMS of your new cleared sodium test, even if you and CMS believed that the existing "sodium test" code was "unique" enough.  

web page

pdf screen shot

The relevant statutory text is here:
For...each existing clinical diagnostic laboratory test that is cleared or approved by the Food and Drug Administration for which payment is made under this part as of the date of enactment of this section, if such test has not already been assigned a unique HCPCS code, the Secretary shall—(A) assign a unique HCPCS code for the test; and (B) publicly report the payment rate for the test.

With regard to implementation, they discussed at 81 Fed Reg 41074 (June 23, 2016) the example of multiple approved KRAS tests reported under one code.  "The current HCPCS code is not unique...we are required to ensure that FDA-cleared or -approved versions of the KRAS test are assigned their own unique codes."  Adding: "Commenters advised against assigning unique codes to every FDA-cleared or -approved test."  To this comment, CMS reaffirmed that a unique code must be issued and must describe "only a single test."  As new codes, they would enter the summer crosswalk/gapfill process.  And "...details will be specified in subregulatory guidance."


CMS has flagged this issue in past rulemaking, as just cited, with the public  example that each FDA authorized type of KRAS test would require its own code.   CMS may be going through the motions of posting this expectation, while laying low with this almost unimaginably exhausting coding process while waiting for a legislative fix.   Nobody wants 60 different codes for sodium tests.  Unlike PAMA price reporting, CMS has no penalties that I can see for failing to do what it asks here.  Also, CMS made no remark in PAMA rulemaking about the industry costs of getting different codes for each and every different FDA IVD whether cleared or approved, which would be colossal time and staff costs.   And if it were to go through, PAMA data on the resulting erratically used codes would probably be extremely noisy, resulting in $1 sodium tests and $12 sodium tests.

In rulemaking, CMS addressed the costs of implementing PAMA price data collection (p. 41093ff) but concluded estimation was impossible.  CMS did not attempt to address the cost of applying for new codes and implementing new codes for every known CDLT under FDA clearance or approval (e.g., the 60 sodium tests, and so on.)
Below the break. CMS web page text as of May 28, 2018.

Notification to CMS of an FDA Cleared or Approved Clinical Diagnostic Laboratory Test (CDLT) under the Medicare Clinical Laboratory Fee Schedule (CLFS)

On June 23, 2016, CMS published the CLFS final rule, “Medicare Clinical Diagnostic Laboratory Tests Payment System Final Rule” (CMS-1621-F; 81 Fed. Reg. 41036 through 41101). The final rule implements section 1834A of the Social Security Act (the Act), which requires extensive revisions to the Medicare payment, coding, and coverage for CDLTs.

Section 1834A(e) of the Act also requires CMS to ensure that a unique HCPCS code is assigned for a laboratory test that is cleared or approved by the FDA. A “unique” HCPCS code is one that describes only a single test.

To that end, the American Medical Association (AMA) will create level I HCPCS codes. CMS will create level II HCPCS codes to identify laboratory tests that are cleared or approved by the FDA, if the FDA cleared/approved test has not already been assigned a unique HCPCS code and an application has not been submitted for a unique level I HCPCS code to the American Medical Association (AMA) or the notifying entity is not in the process of submitting an application to the AMA.

To ensure compliance with these provisions, a laboratory or manufacturer, that is the notifying entity, must notify CMS of any FDA cleared or approved CDLT (that is not an ADLT) along with current coding information about the test.   Any laboratory which furnishes, designs, offers or sells a CDLT that has been cleared or approved by the FDA, or any manufacturer that designs an FDA cleared or approved CDLT, may submit a notification of FDA cleared or approved CDLT under the Medicare CLFS form to CMS. That is, the notifying entity must notify CMS about any CDLT that has been cleared or approved by the FDA — whether it has already been assigned a unique HCPCS code or has not yet been assigned a unique HCPCS code.

The notification to CMS of an FDA Cleared or Approved Clinical Diagnostic Laboratory Test (CDLT) under the Medicare Clinical Laboratory Fee Schedule (CLFS) is accessible via the downloads section below.

CMS footnote:  Page last Modified: 03/23/2018 9:15 AM