Saturday, June 30, 2018

Very Brief Blog: Some Data on LCDs and Review TImes (Noridian Case Study)

From time to time I review the profiles of current and proposed LCDs at a MAC, including times for LCD review.   Here is some data pulled on June 30, 2018, from the CMS database for the Noridian MAC.


  • Half of Noridian LCDs are in diagnostics (2% of the Medicare budget)
  • Recent records show that MACs review public comments for 2-11 months before finalizing LCDs.
  • Some LCDs linger in limbo after public comments close (up to 2 years)

Half of Noridian LCDs = Lab Industry
I tallied 77 active LCDs (several of which appear to be duplicates).  28 were MolDx LCDs and 9 others were non-MolDx lab industry LCDs.  Thus, 37 lab industry LCDs out of 77 active LCDs.

Interesting to note that lab tests altogether are only about 2% of CMS spending, making them much overrepresented as 50% of LCDs.

Public Comment Review Duration: 2.4-11.5 Months
13 LCDs had "draft" versions online, with a closure date, which is the released-to-final date. 

7 were MolDx LCDs, with a review-of-comments time of 2.4 to 7.3 months, most 4.1 months.  3 non-MolDx LCDs had review time of 4.9 to 11.5 months.

Fastest Review on Record
The 2.4 month LCD was the CareDx Allosure test, a donor derived cell free DNA test for renal transplant rejection.  It went to public comment on June 1, 2017, comments closed on August 14, and the final LCD was released on October 25 (2.4 months).   

To calculate the full time from release of draft LCD to final active LCD, add 3 months.  This allows 45 days for initial public comment, the MAC comment review time (here, 2.4 months) and then 45 days which is a "notification period" before the final LCD is active.

"LCD Not Released to Final" Status: Limbo!

The spreadsheet also showed 25 LCDs in "not released to final" or NRTF status after the comment period closed.   These durations of "limbo" LCDs ranged from 78 to 691 days (average 292 days).

Days Under Review (Shown, >100 days)
13 of these were MolDx LCDs.  For example, LCDs on 4KScore assay (DL37122) and VectraDA (DL37092) have been in limbo for 446 days.   Also limbo for 446 days for 3 LCDs on comprehensive genomic profiling for melanoma, colon, and ovarian cancer, which may have been derailed by the CMS NCD on NGS testing in cancer last fall. 

Two LCDs have been in limbo for 320 days, related to pathogen gene panel tests in GI and respiratory illness (DL37368, DL37315).   The 4KScore, Vectra, GI, and Respiratory LCDs are all negative proposed LCDs. 

MACs can drop LCDs from review (they should disappear from this spreadsheet) or leave them under review indefinitely. 

MolDx LCDs may require additional time because MolDx presents them at four MACs - CGS, Palmetto, Noridian, WPS.  These have staggered public comment intervals (sometimes months apart) and MolDx may wait for the last public comment at the last MAC to close, before finalizing all comments into one LCD.


It is not fancy-pants Excel but I've left a copy of my worksheet in the cloud here.

Friday, June 29, 2018

J Molec Dx: A Quartet of Important Articles on Genomics Reimbursement

This week, I had the chance to chair one panel of a workshop on genomics policy at National Academy of Medicine and there was an excellent talk by Dr. Katrina Armstrong, Physician-In-Chief of MGH.  Therein, she included eye popping graphics from the 2016 paper by Lennerz et al. (MGH) on the insanity of genomics reimbursement processes and pathways.

The article appeared in Journal of Molecular Diagnostics, the journal of the Association for Molecular Pathology, and Lennerz et al. can be viewed as one of a quartet of articles on genomics reimbursement in this journal in 2016, 2017, and 2018.

click to enlarge
For one example of the interesting material in this quartet of articles, see Lennerz et al. figure for the reimbursement maze for a genomic test:

Lennerz Fig. 3
I've provided Pubmed links to each of the articles below; most are open access.

Lennerz et al. (2016)  Health Care Infrastructure for Financially Sustainable Clinical Genomics.  J Mol Diagn 18:697-706. [open]

Sabatini et al. (2016)  Genomic Sequencing Procedure Microcosting Analysis and Health Economic Cost-Impact Analysis: Report of the AMP.  J Mol Diagn 18:319-328. [open] 

Sireci et al. (2017) Clinical Genomic Profiling of a Diverse Array of Oncology Specimens at a Large Academic Cancer Center: Identification of Targetable Variants and Experience with Reimbursement.  J Mol Diagn 19:277-287. [open]

Hsiao et al. (2018)  The History and Impact of Molecular Coding Changes on Coverage and Reimbursement of Molecular Diagnostic Tests: Transition from Stacking Codes to the Current Molecular Code Set Including Genomic Sequencing Procedures.  J Mol Diagn 20:177-183. [subscription]    With op-ed by Farkas, here.


For an additional current perspective, see Phillips et al. (2018) Genetic Test Availability and Spending: Where Are We Now?  Where Are We Going?    Health Affairs 37:710-716. [open access]      Another open access source is Concert Genetics' annual white papers on the genomics market, here.

Thursday, June 28, 2018

Dr. Reed Tuckson's Dramatic Presentation on Disparities in Genomics at National Academy of Medicine

Wednesday, June 27, 2018, the National Academy of Medicine held a workshop on disparities in access to genomic medicine.    The conference webpage is here, and the NAM will produce a circa 100-page meeting report in a few months.   The agenda for the workshop is here.  I've clipped a brief meeting summary at the bottom of this post.

The closing keynote was provided by Dr. Reed Tuckson, who has held a wide range of distinguished roles (see here).   Among many, these roles have included President of the Charles R. Drew University of Medicine, Senior Vice President for Professional Standards at AMA; Executive Vice President at UnitedHealth Group.  He is currently the head of Tuckson Health Connections.

From the webpage, I urge you to listen to Tuckson's powerful closing address, which is found at about 8h19m to 8hr40m (here).  I've also posted informal/unofficial notes of the speech here

One topic is use of ancestry DNA information in arrests for crime cases; this is important if a racial group has deep distrust of police sources of evidence in the first place; see NYT here.


NAS Meeting Announcement:

On June 27, 2018, the Roundtable on Genomics and Precision Health will host a public workshop to examine the gaps in knowledge related to access to genomic medicine and discuss health care disparities and possible approaches to overcoming differential use of genomic medicine across populations. Workshop topics may include research on access to genetics and genomics services in medically underserved areas, model programs of care for diverse patient populations, and current challenges and possible best practices for alleviating health care disparities as they relate to genomics-based approaches. The workshop will convene diverse stakeholders, which may include community/public health researchers, clinicians, users of health care systems, payers, bioethicists, and policy makers to present their perspectives and participate in workshop discussions.

For an article on Integen's approach to border genotyping and security concerns, CNBC here.

Tuesday, June 26, 2018

Very Brief Blog: AstraZeneca Funds, Publishes Study on International Access to Precision Medicine Diagnostics

One of the most downloaded articles in the journal Personalized Medicine in the past year was a 2017 study by Daryl Pritchard of the Personalized Medicine Coalition (PMC) and co-authors on barriers to integrating personalized medicine into healthcare practice (here).

In a new report funded by AstraZeneca, authors St. Jean et al. take a global perspective and note that in some cases regulatory approval, in other cases reimbursement approval, lag for the diagnostics that drive precision medicine.   They suggest some paths forward based on a comparison of countries and stakeholders and emphasize the need for collaboration.   See the article here.

Bio-Techne To Acquire Exosome Dx for Up To $575M

Xconomy and other sources report that publicly held Minneapolis-based biotech conglomerate Bio-Techne will acquire Exosome Diagnostics for up to $575M, with $250M as the initial payment and later payments with contingencies.
Bio-Techne website here.  Yahoo Finance here.   Bio-Techne has a market cap of about $6B, 2017 revenue of about $600M, and 2017 profit of about $60M.  Bio-Techne's one-year share price is up from $115 to $157.  See a 2017 article on Bio-Techne here.  According to one website, CEO Charles Kummeth had $9M compensation in 2017.

In summer 2017, Exosome received an AMA PLA code for its Prostate(Intelliscore) test and raised $30M in Series C funding.  By Fall 2017 the new code was crosswalked to the payment for the Opko 4KScore test (81539) at $760.   So far as I know, Exosome has "code and pricing" and are still working on CMS "coverage."
  • See 0005U, Oncology (prostate) gene expression, profile by real-time RT-PCR of 3 genes (ERG, PCA3, and SPDEF), urine, algorithm reported as risk score.
Follow ExosomeDx on Twitter here.

Other very recent diagnostics acquisitions include Roche acquiring outstanding shares of Foundation Medicine for $2.4B on June 19, and Myriad acquiring Counsyl for $375M on May 29.

The chart below shows FMI's rise from $36 last summer to $136 in June 2018.

Sunday, June 24, 2018

NPR Profiles Vijay Prasad, Oncologist Who Critiques "Hype"

In September 2016, almost two years ago, I a column about then-current articles under the category of "precision medicine sceptics."

On Sunday, June 24, NPR runs a seven minute interview and an on-line article about Vijay Prasad, the OHSU-based oncologist who is a prolific author of articles "calling out hype" in the field of precision medicine.   The NPR article is here.   See also what looks like an open-access article at the trade journal Cancer Letter, dated June 22, here.

Prasad was part of a "debate" at the June Chicago ASCO on precision medicine, as covered by NPR.   Just in April, see coverage of a "debate" on the same topic at AACR, here.

 Another West Coast academic, Stanford's John Ioannadis, is equally prolific in hype-bashing productivity; e.g. recent blog article here.

I'll let you assess the NPR interview for yourself.  If of interest, I've clipped a couple dozen of Prasad's 2017-2018 articles from PubMed below the break.

Friday, June 22, 2018

Very Brief Blog: Medicare's Category A/B Device Trial Coverage, 2015-2018

In the 1990s, CMS and FDA set up a categorization system "Category A and B" for device trials, which is similar to, but NOT the same as, the 510K versus PMA device classes for approvals.

Although it reviews trials, since then, CMS has been able to cover both device cost and other clinical costs for Category B devices.   (Only general costs, not the device cost, are covered for Category A "experimental" devices.)   

The theory is that the Category B device is providing medical care; the patient needs a pacemaker or an artificial hip, and this device is the one device they are getting for treatment of their condition.

The CMS home page for the policy is here.   CMS also has a webpage for all approved studies - 239 as of June 2018, here.   CMS approves proposed trials for payment centrally and provides instructions how to apply (you send them the clinical study protocol, the IRB approval, etc.)   

The FDA's most recent guidance for how it establishes its Cat A/B decisions is from December 2017, here.
  • I copied the CMS web-based approval table of 239 rows into an Excel spreadsheet and put it in the cloud for you, here.   See the "Down Arrow" at upper right to download.
Percent Category A
36 of the 239 trials as "Category A", or about 15%.   We don't know the success or failure rate, so we can't tell if it's different for A or B trials.  But we do know, that about 1 in 8 approved trials is Category A.

I also sorted by sponsor.  Many sponsors appear only once or twice across the couple hundred approvals.  Abbott appears 6 times, Boston Scientific 6 times, Edwards 9 times, Medtronic 15 times.  It looks like about 25 trials are sponsored by universities.   Among companies whose names might be less familiar, Novocure has 3 trials and Vivek Reddy 4. 

Approvals By Year
Numbers may not add perfectly due to variations in my Excel cut/paste, but I tally about 43 approvals so far in 2018, versus 92 for 2017, 68 for 2016, and 25 for 2015.   

Tuesday, June 19, 2018

New 70-Page Guide to Coverage Issues at Medicare (MedPAC 2018, Chapter 10)

Every June, the federal advisory body MedPAC provides a report to Congress on Medicare policy/payment issues. 

This year, Chapter 10 is a 70-page overview of the LCD and NCD processes, heavily laced with up-to-date charts and footnotes.   Yes, for health policymakers, it's Christmas-Come-Early.   In addition to providing a good learner's guide to CMS coverage, the chapter gives a lot of attention to issues related to low-value care and ways that CMS might, possibly, use new policy tools (like pre-authorization).

Find the chapter here.

All the familiar topics old and new are described, including differences between LCDs and NCDs, Medicare's variable use of Coverage with Evidence Development, Parallel Review, and attempts to bring more cost-effectiveness into Medicare decisions.   Medicare's 1989 and 2000 efforts to "define reasonable and necessary in regulation" are duly memorialized.  (For even more, see Susan Foote's 2002 article "regula mortis," here.)

The MedPAC clearly tries to be fair-handed; after discussing CMS's two examples of Parallel Review, they also cite a discontented viewpoint:  Podemska-Mikluch (2016) FDA CMS Parallel Review: A failed attempt at spurring innovation.  George Mason University.

MedPAC provides an interesting table at 10-2, which shows that average NCDs per year (new or reconsidered) ran  from 9/yr to 17/yr a decade ago, with as little as 81 days per year for implementation.   More recently CMS produced only 4 NCDs per year and with a timeline of 301 days for implementation.

MedPAC June 2018 Table 10-2, click to enlarge

Cases studies of "low value care" are: (1) proton beam therapy, (2) the gel ACTHar drug, and (3) the issue of earlier initiation of dialysis (earlier than 10ml GFR). 

Regarding ACTHar, they report that the great majority of docs prescribing it get goodies from the company (match up CMS ordering records with public data under Sunshine Act). 

They compare categories of low value care between MA and FFS plans.   The MedPAC authors close with a thorough discussion of new coverage and utilization management tools, such as clinical decision support and preauthorization, as well as a discussion of cost-benefit policy in law and of the Boston thinktank ICER.

There are several citations to works by past and present CMS leaders, such as:
  Daniel GW, Rubens EK, McClellan MM (2013)  Coverage with Evidence Development: Challenges and next steps.  JAMA Int Med 173:1281-82.
  Mohr PE & Tunis S (2010)  Access with evidence development: the US experience.  Pharmacoecon 28:153-62.
  Tunis S et al. (2011)  Improving the quality and efficiency of the Medicare program through coverage policy.  Urban Institute.
  Jensen T (2014)  CMS coverage perspective for diagnostic tests. (deck)  Here.
Not cited here but see similarly:
  Jensen T & Jacques LB (2011) Medicare coverage: Engaging on evidence.   Regen Med 6(6 Supp) 99-101.

Saturday, June 16, 2018

Very Brief Blog: Justice Department Documents on Elizabeth Holmes & Theranos

It's widespread news on Friday, June 15, 2018, that Department of Justice has indicted former Theranos CEO on criminal fraud charges.    See for example here and here.

Not all articles link to the original DOJ documents.

  • The DOJ press release is here.
  • The DOJ indictment, based on Grand Jury investigations, 15pp, is here.

For my contemporary library of about 150 articles, begun and 2014 and running through the famous WSJ articles in late 2015 and continuing into 2016, see here.

In May 2018, WSJ reporter John Carreyou published his book, BAD BLOOD, about his two year investigation into Theranos.   I wrote about two sections in the book.  In one, he describes a previously unknown story wherein a senior FDA executive flies from Maryland to Florida to meet with Gen. Mattis about problem with Theranos (this was long before Mattis joined the company's board of directors.)  Here.   I also highlight anecdotes in the book where an unnamed FDA official leaks confidential non public government information about pending investigation reports and pending reviews of confidential company data submitted to the agency.   Here.   For perspective on that, I highlight a recent criminal case where a CMS official was convicted of having leaked pre public from another HHS agency.

Wednesday, June 13, 2018

FDA Policy Land Grab? FDA Uses Guidance Announcement as Trojan Horse for Price Paradigm Positions

Generally, both in US and Europe, there is a sharp line between regulatory authorities who approve drugs and payers who set up policy and pricing systems for coding and reimbursement.

This week, FDA used a routine press release to make a major land-grab on new paradigms that CMS might float, in the future, for drug payments.    This goes a great deal further than the usual FDA positioning, which is (for example) to support faster biosimilar and generics approvals because that eventually improves competition.

See Endpoints News here, and the original FDA press release here.

The entry point for the press release is a new guidance document (arising from 21st Century Cures Act) for antimicrobial drugs for limited populations (here; comment period to early August).  This is the "LPAD" pathway and provides several approval and postmarketing benefits for qualified drugs.

The press release, however, was positioned specifically as a "Statement from FDA Commissioner Gottlieb" and about half of it discusses long term economic issues with advanced antibiotics and proposed an entirely novel payment paradigm in some detail, commenting that it FDA is "currently discussing [it] with other agencies such as the Centers for Medicare and Medicaid Services (CMS)."  In brief, the proposal is that certain rare antibiotics would be licensed on a per click annual basis by hospitals rather than conventional payment.   Since only a small fraction of all infectious disease patients are FFS Medicare patients, the plan would have to be nationalized across Medicaid and other payers to be impactful for early investors. 


Antibiotics face major hurdles, leading to efforts such as the BARDA-sponsored public private partnership CARB-X, which awards substantial but early stage funds to antibiotic startups (here).  CARB-X is headed by a very sharp Boston University professor, Kevin Outterson, whom I heard speak at a health innovation conference in Berlin a few weeks ago.   We want pharma to develop new high risk next generation antibiotics, and then ideally, they'll be shelved and not used for years (to avoid resistance mutations) as patents expire.  In short, if you don't do something drastic, the current reimbursement system is highly toxic to antibiotic development.   Someone, if not the Presidential Advisory Commission (PAC-CARB), needs to be sure novel ideas are launched into action.  It's also a good fit to the new HHS interest in high octane public private partnerships for better policy and healthcare (here).

HHS' leader, Alex Azar, previously a high profile corporate attorney and pharma business leader, has a vision for bigger and better collaboration between HHS's star divisions, FDA, CMS, and NIH.   And Scott Gottlieb understands CMS and business economics far better than a typical FDA leader.   The press release intrigued me, though, and left me wondering which of these two scenarios apply:

(A) The press release was planned top-down.  A major announcement of potential new policy was given to the FDA's leader, not the CMS leader or Azar.  This could either show new levels of inter agency idea sharing or giving a reimbursement policy topic directly to FDA for variety, somewhat like giving the cello player a solo he wouldn't ordinarily have. 
(B)  Gottlieb knew the policy was being discussed, and FDA used the passing press release as a good vehicle to own the idea and get it out into the public media.   Even though, FDA wouldn't try to get ahead of CMS in CMS's own reimbursement regulations.

To put the comment in perspective - and it's worth reading the press release twice - imagine the CMS administrator proposing a new way to organize and process drug approval departments and claims at FDA, then noting "he was talking to FDA about his idea too." 

To my eye, nothing in CMS reimbursement, especially for hospitals, forbids this type of contracting.  A patient has sepsis, CMS pays $25,000 for the sepsis DRG, and CMS doesn't really get involved in how, when, or why the hospital acquires the needed drugs or equipment for the healthcare.  And as already noted, Medicare must handle only a small proportion of all US sepsis patients on rare antibiotics, so if the policy involved CMS fee for service patients alone, it wouldn't make a big dent in the overall commercialization and incentive system.

See a 2017 PAC CARB white paper on incentives, here.  Historically, CMS presentations at PAC CARB haven't mentioned out of the box issues like new payment paradigms; see Ling.

The press release was timed to the last day of the ASM MICROBE 2018 conference in Atlanta.

In February 2018, FDA issued a report to Congress on its (internal, regulatory) efforts on antibiotics; here.

This is an extremely rich policy areas, with countless proposals, white papers, and review articles.  For some additional current online resources see here.

CMS to Cancel Bizarre Policy that Disallowed CGM if Used By Individual with Smartphone

Update September 2018: Trade press, CMS interview about this decision.  Here.


I've written several times about bizarre CMS policies about Continuous Glucose Monitors (CGMs), most recent in March 2018 (here).

One of the most bizarre tangents was a DME MAC article that disallowed supply payments (such as, oh, say, insulin supply and tubing supply and sensor patch supply) to a CGM system if the user used a smartphone in conjunction with it in any way.   See original article here, and if it is taken down, see archive here.

The pivotal text is:
  • Coverage of the CGM system supply allowance is limited to those therapeutic CGM systems where the beneficiary ONLY uses a receiver classified as DME to display glucose data.  
  • If a beneficiary uses a non-DME device (smart phone, tablet, etc.) as the display device, either separately or in combination with a receiver classified as DME, the supply allowance is non-covered by Medicare
See a September 2017 article at Medscape here, a July 2017 blog here, another article here.

CMS Will Change Smartphone Ban Soon

According to a June 13, 2018 article at Medscape, CMS has now promised to have the above policy statement withdrawn.  Here.  Another June 2018 trade article here and here.

Medscape states in part,
     Although diabetes advocates had praised CMS for the overall coverage decision, they also decried the agency's lack of recognition for the use of modern-day technology, which also left seniors without access to the "share" function, whereby loved ones could remotely follow blood glucose readings.
     One endocrinologist deemed the lack of coverage for use of the device with the smartphone app "absolutely ridiculous."
     Turns out, CMS was listening. "CMS heard from numerous stakeholders who shared their concerns that Medicare's CGM coverage policy limited their use of CGMs in conjunction with their smartphones...After a thorough review of the law and our regulations, CMS is announcing that Medicare's published coverage policy for CGMs will be modified to support the use of CGMs in conjunction with a smartphone, including the important data sharing function they provide for patients and their families," the agency said in a statement.

The source of the news is the DME Center Website at, here.  Cloud here.

click to enlarge

June 2018 Court Case

For a flat-out CMS loss in June 2018, in which federal court even awarded attorney's fees to the plaintiffs, see here.  Courts can award lawyers' fees in cases where the Fed position is unable to "satisfy a reasonable person" or is not "reasonable in law and fact."  There must be a "reasonable connection between the facts alleged and the theory propounded" by the government.  The government failed these tests, so fees could be awarded.

Interesting reading.  Regarding the tortuous and generally undefined use of "precautionary" in CGM cases, judge finds that the "circular reasoning is entirely unhelpful."   If CGM is not "medical," says the judge, HHS was unable to explain "what non-medical purpose it believes [CGM] serves."

The court notes that previous cases had found the HHS position to be "head scratching" and that "a string of losses" in many court cases can be indicative of an untenable position.  The standard rate awarded to attorneys, barring exceptions, is $125/hr.  The judge's award in this case (including special rates) was $70,000.  At $500/hr, that would be about 140 hours.

For a July 6, 2018, article at MedPageToday, here.

Tuesday, June 12, 2018

Very Brief Blog: Patient Centered....Lab Utilization Services!

A few years ago, everything was -omic: genomics, proteomics, metabolomics, microbiomics...  More recently, one of the flypaper catchphrases has been "patient centered:"  ...patient centered EHRs, patient-centered outcomes, patient-centered trial design

A new one to me is Patient Centered Laboratory Utilization Guidance Services, or PLUGS.   See a website based at Seattle Children's Hospital, here, and this consortium of 70+ entities is holding a conference in Seattle this week, PLUGS Summit 2018, here.   See full agenda here.

For another entry point into the quickly changing economics and management tactics of labs, see nearly any issue of Dark Report and see a recent textbook from MGH, Dr Kent Lewandroski's Utilization Management in the Clinical Laboratory, 300pp, 2017, Springer.

I've clipped a few speech titles below.  MolDx's Dr Girish Putcha is also a speaker.

Very Brief Blog: New Consensus Paper on Liquid Biopsy in Lung Cancer

There is a steady drumbeat of activity in liquid biopsy, especially lung cancer, where both Foundation Medicine and Guardant have NGS panel tests under FDA review.

With an Accepted date of May 26, 2018, Journal of Thoracic Oncology has published a open access position paper by IASLC on the use of liquid biopsy in lung cancer (Rolfo et al.).   See the paper here.

The paper states in part:
A multidisciplinary panel of experts in the field of thoracic oncology with interest and expertise in liquid biopsy and molecular pathology, was convened by the International Association for the Study of Lung Cancer (IASLC) to evaluate current available evidence with the aim of producing a set of recommendations for the use of liquid biopsy for molecular analysis in in guiding the clinical management of advanced NSCLC patients as well as identifying unmet needs....
Currently, there are two important scenarios in which the liquid biopsy might confer an
advantage to patients with advanced NSCLC: initial molecular diagnosis and progression during targeted therapy. However, a treatment strategy that takes into account the patient’s clinical status, clinical relevance of test results, and local feasibility of the different testing methods has to be considered when planning diagnostic procedures in order to avoid potential delays in identifying therapeutically actionable resistance mechanisms. 

CMS Coverage
My reading of the current CMS NCD on genomics in lung cancer is that new NGS based LBX CDx tests will be covered per FDA indications on a rolling basis under the existing text.   PCR based tests would fall outside the NCD but could be covered by LCDs on a rolling basis.


The same issue has a paper on racial disparities in lung cancer survival Jones et al here and a paper on PDL1 immunohistochemistry concordance here (Tsao et al, Blueprint project). 

Monday, June 11, 2018

Very Brief Blog: CMS Posts Preliminary Gapfill Prices for 2018

On June 11, 2018, CMS posted gapfill preliminary prices for the 2018 year long gapfill process.

See the CMS webpage here and look for "Test Codes and Payment Determinations" and then 2018 CLFS Gapfill Preliminary Determinations (zip file containing XLS).   Direct zip file link should be: here (unless they update it again).

  • The AGENDA the CMS CLFS June 25 new codes has also been posted, with 32 agenda items (speakers); here.  Note that while I am listed the agenda here, the New Codes Meeting agenda is basically unrelated to the gap fill proposals.

Note that the first version of the gapfill pricing spreadsheet had errors; see a version dated June 13 or later.

Gapfill prices for 17 codes range from $24 to $2030, but almost all are below $1000.

CMS accepts public comment for 60 days (to August 7), submit comments to Glenn McGuirk at CMS; his email is on the CMS webpage.   CMS then transmits these public comments to its MACs, who return revised prices to CMS in August, which are posted by CMS in early September.   There is a rather vaguely defined internal appeal process for 30 days (no public meetings are held); CMS posts final prices by mid November which sometimes vary from the September prices due to this final appeal process.

Longest Journey.  The code with probably the longest journey is 81327 SEPT9, which was in the new code crosswalk process in CY2016, the appeal process in CY2017, and is now in the gapfill process throughout CY2018. 

Most Illogical.  The most illogical pricing is probably Genome or Comparator Genome at $349, which must be substantially below real world costs.   For those who can dodge the various firewalls, see a very favorable current article in Washington Post on genome testing for acutely ill children, here.  CMS prices Exome at $4900.

A couple comments from me:
  • No Rationale.  CMS stated in PAMA rulemaking that it would begin providing MACs' "rationales" for prices.  No sign of that publication yet.
  • Median of MACs?  PAMA regulations state that CMS shall calculate medians of "MACs," but rather than listing the circa ten modern MACs, it lists the historical 57 CLFS pricing zones from the 1970s.   
  • MolDx Bloc.  All the MOLDX MACs price together for all codes (Noridian, WPS, CGS, Palmetto and Palmetto/Former Cahaba), except for one code that might be a typo.  
    • This MolDx "Bloc" of states or MACs is large enough to drive the median.
  • All Prices Match MolDX Price.  All median prices matched the MolDx bloc price.

Nerd View

I checked for cases where there was a proposal from any MAC that is lower than the Median.  This occurs for 81327 (where most bids are around $150 or $190), and for 81471, 81470, 0001U, where at least one MAC offered 20-50% less than others.  See the "min" and "max" columns in the table below.  Gapfill proposals:

click to enlarge

Agenda for New Code June 25 New Codes Meeting (this is entirely different than the gapfill table above):

click to enlarge


Social Security Act 1834A(c)(2-4) requires CMS to post rationale for any gapfill or crosswalk price. See also 81 FR 41086, 6/23/2016.

(2) Gapfilling process described.— The gapfilling process described in this paragraph shall take into account the following sources of information to determine gapfill amounts, if available:

(A) Charges for the test and routine discounts to charges.  (B) Resources required to perform the test.  (C) Payment amounts determined by other payors.   (D) Charges, payment amounts, and resources required for other tests that may be comparable or otherwise relevant.   (E) Other criteria the Secretary determines appropriate.

(3) Additional consideration.— In determining the payment amount under crosswalking or gapfilling processes under this subsection, the Secretary shall consider recommendations from the [advisory] panel established under subsection (f)(1).

(4) Explanation of payment rates.—In the case of a clinical diagnostic laboratory test for which payment is made under this subsection, the Secretary shall make available to the public an explanation of the payment rate for the test, including an explanation of how the criteria described in paragraph (2) and paragraph (3) are applied.

Very Brief Blog: HHS Wants Help Setting Up an Effective Public-Private Partnership Channel

On Thursday, June 7, 2018, HHS published a Request for Information to help it set up a new board to discuss and propose ways to improve Public-Private Partnerships within HHS.

It's called, "Facilitation of Public Private Dialogue to Increase Innovation and Investment in the Healthcare Sector."  Comments are due in 30 days (about July 5).

The goal is "constructive, high level dialogue between HHS leadership and those focused on innovating and investing in the healthcare industry."   However, the policymakers don't presume to know exactly what a workgroup should look like or exactly what its agenda should be.  They want your advice.  Should the workgroup start by assessing recent trends in health innovation and investment?  Should it encourage private investment?  How should its membership and meetings be structured?   How can HHS develop a "durable and consistent approach" to public private partnerships and innovation to improve public health?

Find the document and comment homepage here.

See some trade press here and here.


I wrote about something on-tangent a few days ago.  For example, Federal preventive benefit regulations make it far easier to create a new Medicare screening benefit for colon cancer than for lung cancer, ovarian cancer, liver cancer, etc.   Does that really make sense?  It stimulates investment in one cancer and prejudices against investment in other cancers.  My blog here.

Appearing just a few days after the HHS request for advice, FDA's Scott Gottlieb issued a major policy memorandum about the need for innovative commercialization pathways for antibiotics.   See his speech here, and press coverage here.  He focused on "new reimbursement" for antibiotics, such as hospital based licencing, a topic pretty far afield from his home base at the FDA. 

Very Brief Blog: New Legal Actions re Constitutionality of Affordable Care Act

  • Takeaway:   New legal issues for ACA focus on "pre existing conditions."   However, among the legal documents, other issues like "preventive benefits" are also drawn into the fray.  


Much press since Thursday June 7, when HHS filed a brief that key parts of the Affordable Care Act were now unconstitutional, since Congress repealed a penalty aka "tax" for not having insurance.  The brief was part of a case running for months at the behest of numerous states.

Most of the attention has focused on whether or not the Administration should defend the law against threats, or whether it is OK for the Administration to side with those who argue the law isn't constitutional.   Beyond the individual mandate, it's worth looking at what different sides of the case argue regarding other parts of the ACA such as mandating copay free services that are endorsed by the USPSTF.

I'm a non-attorney so I provide only a simple review of my understanding of key facts.  For an entry point, see U Michigan attorney Nicholas Bagley's blog here

Phase One

There was a Supreme Court challenge that the ACA was unconstitutional since it "mandated individuals to buy insurance."   Argued, there was no constitutional authority for Congress to do that.  (Although Congress may regulate interstate commerce, raise an Army, and so forth.)   The Supreme Court actually tries to affirm that laws are constitutional if it can find a way to do so, and Court found that the penalty for not having insurance was, in essence, a tax, and Congress can tax.   Here.

Phase Two

Congress 2017 repeals the ACA tax on individuals who don't have insurance.

Phase Three

A number of states filed suit that without the tax, the Supreme Court judgement is no longer effective, as it was based on "the tax."   See State case here, 33pp.   States argue that without the individual tax, the individual mandate isn't legally justified and without that, US had already argued that other parts of the law like guaranteed issue despite preexisting conditions, don't make sense.   (It's like the scene in the movie where the good guy drops his pistol and the bad guy picks it up.)

Arguing both with US government prior statements, and with reference to a prior "severability" case (Alaska v Brock 1987), States argue that all of the ACA doesn't make sense without the individual tax, which no longer exists.

Note, as below and on several other pages, States argue that guaranteed issue must now be stripped from the law, AND OTHER regulations on insurance such as essential health benefits and the requirement to cover preventive services.  See:

Phase Four

June 7 sees the "Federal Defendants' Memorandum Response" to the above States' application for preliminary injunction against the ACA.  Here.   (See also a 3-page letter from Jeff Sessions to Paul Ryan, here.)

A) Preliminary Injunction not needed. Feds argue that a preliminary injunction against the ACA is not required, but they agree in part with the States' case and would see it affirmed in the court's decision memo.

B) Feds: Concur with States; kill pre existing condition law.  Feds argue that the guaranteed issue aspect of the ACA (no pre existing conditions) is inseparable from the tax, and guaranteed issue should be struck down now, absent the tax.

C) Feds:  Preserve rest of law.  However, Feds do NOT argue (as did States) that "all" of the ACA is unconstitutional.   One section of the Fed document states "guaranteed issue and community rating requirements are NOT severable" and another section states, "ACA's other provisions ARE severable."   Feds also argue that Congress specifically repealed the individual mandate tax (and a range of other tweaks), but if Congress wanted to do so, it could have repealed more of the ACA itself.[*]   For example, "There is no reason the ACA's expansion of Medicaid should hinge on the individual mandate."  At best, the States offer a chain of "speculative hypotheticals" in a difficult attempt to connect various parts of the ACA to the individual mandate.


We are in a rare epoch where the head of HHS, Alex Azar, is not only an attorney, but a really smart attorney, so the Fed position would carry his endorsement.

If the Court sided with the Federal brief, it would strike down the guaranteed issue (re pre existing conditions) but it would leave other aspects of ACA intact (such as Medicaid expansion and preventive services.)

* Of course, following the HHS's own line of thought here, Congressional elves could at one blow have repealed both the tax and the preexisting condition rule, if that was the Hill's intention, rather than repealing the tax while leaving the dependent pre-existing rule for a contentious multi year court case.

Friday, June 8, 2018

Very Brief Blog: CareDx Breaks Market Cap Ceiling of $500M

One of the most heartening stories in specialized diagnostics companies recently is CareDx.  The company markets the AlloMap test for cardiac transplant rejection (where a blood test can sometimes replace a cardiac biopsy) and more recently the AlloSure test (screening for kidney transplant rejection by finding free circulating donor organ DNA in blood).   Both are covered by the Medicare program, specifically, the Noridian/MolDx program.   See an AlloSure publication, Bloom et al, 2017, here.

A year ago, on June 5, 2017, share price was $1.07.  Today, June 8, 2018, it's $15.11, up fifteen times.   This gives a market cap of $523M today, as opposed to about $16M last summer.

2015 revenue was $28M; by 2017 revenue rose to $48M.   Quarterly revenue was up 17% from 2017Q2 to 2018Q1.

2017 net income was -$55M.

Other companies are also looking at the cfDNA & renal transplant space; see a UCSF/Natera collaboration announced in 2016 here.

Very Brief Blog: Tucson's ACCELERATE DIAGNOSTICS Hits Market Cap of $1B

This morning, I noticed that Accelerate Diagnostics has a lead position on June 13, 2018 at a Harvard conference on antibiotic resistance (here).   They also had a cover article in CAP TODAY for May 2018, describing them as part of a "seismic shift" in microbiology.

According to CAP Today, the platform and molecular kits "handily outstrip traditional identification and antibiotic susceptibility testing" for bloodstream infections.  See Anne Paxton's article here.

Besides CAP Today, there have been a flurry of recent articles about Accelerate Pheno on PubMed (Charnot here, Marschal here, Pantel here, Elliott here, Lutgring here). 

Accelerate Diagnostics (symbol AXDX) is based in Tucson.  According to Yahoo Finance, today's market cap is $1.1 billion.  Share price, $21 today, has been in the $18-26 range for several years.   2017 revenue was $4M with a $64M operating loss.  See a recent quarterly transcript at Seeking Alpha, here.  One financial blogger discusses the company here.  Company website here.

See an FDA press release from February 2017 here, which is a good entry point for understanding the test design and positioning.   For more technical detail, see the FDA De Novo 510(k) decision summary here, reclassification order here, DEN160032.  The FDA reviewed a primary clinical study of 1850 positive blood cultures, using slower traditional methods as a gold standard.


Bay Area molecular diagnostics company Karius is working on rapid detection of 1250 pathogens as an NGS based reference lab test; here.  It raised $50M ten months ago in August 2017, here.   Bay Area startup mFluiDx is working on rapid POCT molecular diagnostics; here.

In a talk at ASM June 2018, quoted in Genomeweb, Biomerieux's Alex Van Belkum noted that current approaches to AST are accepted and cheap, and that sequencing based AST has "a long way to go."  Here.

Very Brief Blog; Harvard Genomics Conferences (June, November, November)

The Petrie Flom Center for Health Law Policy, Biotechnology, and Bioethics is part of Harvard Law School and runs an interesting website, publications, and conferences - here.  See their book on big data and health law, here; at Amazon here.

This week they flagged several other conferences at Harvard:

June 2018
On June 26, 2018, the Harvard Medical School Department of Biomedical Informatics hosts a conference in "Precision Medicine 2018: Assembling the Puzzle."   See website here.

November 2018
On November 1-2, 2018, the Program in Quantitative Genomics hosts a conference on Biobanks. * See website here.

November 2018
In November, we'll also be up to the 14th Annual "Personalized Medicine Conference" hosted by the Personalized Medicine Coalition (PMC) and held at HMS.  November 13-15, 2018; Website here.


Harvard also hosts a conference on Antibiotic Resistance, June 13, 2018, here.

*Regarding big biobanking, the All of Us program to sequence 1M genomes established its biobank at Mayo; e.g. NIH website here,  5 year funding is $130M; 35M biospecimens will be handled; articles here and here and here.

Very Brief Blog: Rogers (2018) On Hidden Costs of Shipping Hospital Tests Out

People have been talking about drivers of lab testing costs, including hospital lab tests, for decades (see 1984 here and 1993 here and 2001 here.)    Lately, there's been much attention to "higher costs of hospital based testing," for example, arguments that PAMA pricing would be higher if hospital labs reported their payer prices (here).  Dark Report has recently been reporting that labs buy small hospitals just to access their higher price payer contracts (!), and that large reference labs are again working to tighten their relationships with specific payers, and thus, with select populations of patients within a hospital's system.

Into this whirlpool lands an article by Rogers et al. at Children's Healthcare of Atlanta.  (The context above is by me, not the authors).   See Archives of Pathology and Laboratory Medicine, here.  In the abstract, they write that: 
Disruption of outpatient laboratory services by routing the samples to commercial reference laboratories may seem like a cost-saving measure by the payers, but results in hidden costs in quality and resources to support this paradigm...Outpatient testing was sent to 3 different laboratories, specified by the payer.
My internist is affiliated with a famous health system, and I've had lab reports in different years come back with circa $150 test charges (from the health system outreach lab) or circa $50 charges (from a reference lab), so I can see the payers' point of view. 

Here's the new contribution.   Rogers et al. document that turn around times (TAT) to result rise from 1.3 hrs at the hospital lab to 39 hours at the reference lab, and that thousands of delays per annum occurred (such as miswritten date of birth).   They assert there are many hidden costs to forced routing of outpatient lab tests away from the health system lab.

Article was covered by Genomeweb's 360DX website, here.

The article contains some interesting information on salary costs for different levels of staff, including computer staff (epub p 2), and interest distribution-of-costs of different phases of lab testing (e.g. their p5 color bar chart, epub p 5).

Thursday, June 7, 2018

Very Brief Blog: Survey of Physician Salaries by Specialty for 40-year-olds

Medscape publishes a survey of salaries of physicians who have finished training but are under 40, as below.   Link here.    Pathologists, family medicine, and pediatrics are clustered among the bottom five or six.   The two highest categories are plastic surgery and orthopedics, followed by a cluster that includes gastroenterology, anesthesiology, and otolaryngology.  Psychiatry, which to my memory used to be in the lower 1/4, is in the middle in this survey.

click to enlarge

Tuesday, June 5, 2018

Very Brief Blog: FDA Finalizes Exemption for 510(k) for Some Genetic Tests

FDA has two different processes for downclassifying its regulatory system for diagnostics.  One is to downclassify a product from Class III (PMA) to Class II (510(k).   The next is to downclassify a Class II test so that it is "510k exempt."

Last November, FDA announced it planned to make some genetic tests self-certifying, that is, 510(k) exempt.   The proposed rule appeared November 7, 2017 (here).  The final rule appeared June 5, 2018 (here). 

An Exemption "After" First Review
The exemption applies somewhat confusingly to future 510(k)s after a specific test device has received a one time review by FDA.  Yes, a naive reader might think it's more of a "510k revision exemption" than a "510k exemption."

Mystery Commenter Opposed FDA's Rule
The FDA discussed in the new June 2018 rulemaking that it received "one comment" on its proposal - an objection - although the corresponding webpage lists "0 public comments" (here).     The comment, dealt with in Q&A format as is usual, was from "a professional organization opposing [the] exemption."   It would be interesting to know which organization this was or why it's comment isn't available at

Exemption from 510(k) Followed Downclassification from Class III to Class II
The June 2018 finalization was largely a "coda" to events last November, such as the downclassification from Class III to Class II of the 23andMe personal genome service test (aka Genetic Health Risk Assessment System, per new FDA category 866.5950). 

The Class III to Class II de novo 23 page review is here and an FDA press release here.  Note that these are for DTC tests.

Lengthy Analytical Validity Requirements in Regulation
FDA argues that full analytical validation is established by following stated regulations (see 21 CFR 866.5950(b)(3)(iii)).   FDA allows the self-certification with four limitations.  The health-risk tests cannot be any of these:  (1) indicated for prenatal testing, (2) predisposition to cancer where the may lead to confirmatory treatments or procedures, (3) genetic variants that impact drug metabolism, (4) assessment of autosomal dominant variants.

The device regulation category 866.5950 is 4700 words long; most FDA classification categories are only several words long.

Neither Cleared nor Approved?
Some CMS rules refer to "cleared or approved" tests, such as the spring 2018 NCD on genomic tests in cancer.   Tests that are self-certified under novel types of FDA regulations or potentially under novel lawmaking might not be pigeon-holed as either "cleared or approved" but rather in a different gray space as "authorized."

Trade Press Links

For more information see:

  • June 2018: RAPS, MobiHealth, Becker's
  • March 2018:  WSJ.    
  • November 2017:  STAT, Duke.
    • The DUKE article gives a detailed listing of the initially authorized genes and a bullet point description of the extensive controls.

Friday, June 1, 2018

Brief Blog: VA Endorses Wider Use of Pharmacogenomics

This spring, I had the chance to write a white paper for Thermo Fisher Scientific on adoption of pharmacogenomics in health system (online here).

On June 1, 2018, VA authors issue a report in Genetics in Medicine strongly advocating wider use of pharmacogenetics in their health system.  A nice online article in Genomeweb here.   See the original article by Vassy et al. here.   4 gene drug pairs were strongly recommended and and additional 12 were recommended, totaling 16.   

I believe if you are able to click on the article link from the Genomeweb news article, it will take you to a website that gives you access to read the whole original article online (but not download it.)

On June 27, 2018, I'm chairing a session on genomics and health disparities at the National Academy of Sciences, and we will have Larry Meyer, National Director, Genomic Medicine, V.A., on the panel