Thursday, July 26, 2018

July 25, 2018: CMS Releases Annual Outpatient Rule Proposals

On July 25 - almost a month later than normal - CMS released outpatient rulemaking for CY2019.    Public comment is open for 60 days (September 24, 2018).

The CMS homepage for the rulemaking is here.  The CMS press release is here.  For a deeper dive see the "Fact Sheet" here.

The Federal Register home page (includes comment link) is here and the actual rule is here (83 Fed Reg 37046-37240, 195pp, July 31, 2018).

Read a speech presented on the same day by Seema Verma to the California Commonwealth Club, here.

Wednesday, July 18, 2018

OIG Posts Report on How CMS Collected PAMA Data

OIG has posted a public report on how CMS collected national PAMA data for laboratory rate-setting, and how the process could be improved.   The 20 page report is available here.  Unusually, it is written in a "powerpoint" format.

Key conclusions are:
  • CMS performed limited quality assurance checks and relied on labs' self-certification of their reported data. CMS's quality assurance activities that identified outliers or excluded data affected new rates for a few low-volume tests. Labs experienced some one-time challenges in complying with a new policy, but CMS's limited quality-assurance efforts present an ongoing risk.
  • Complete and accurate data are essential to setting payment rates for lab tests, and CMS should address challenges from 2017 to ensure data quality in the future. Effective outreach can help ensure that all labs required to report data comply during future data reporting periods. CMS can help ensure data quality by assessing quality assurance efforts and compliance activities. 
  • OIG will continue to issue an annual analysis of the top 25 lab tests, based on Medicare Part B payments, and other analyses that OIG determines appropriate regarding the implementation and effect of the new payment system.
ACLA and others have strongly complained the CMS process improperly excluded hospital lab payments.   See ACLA's home page for the topic, here.   CMS discussed and/or welcomed public input on its process in July 2018 PFS rulemaking; entry point here.    See an August 2018 Genomeweb article about industry complaints about PAMA to the Hill, here.


OIG issues elaborate reports each fall on top CMS lab tests; they mention above they will continue to do so.  Entry point here.

For an article on ADLT price gaming, here.

Separately:  Affecting PFS services (including PFS lab tests), in PFS rulemaking in July 2018, CMS also released a truly massive database of new RUC/Supply/Equipment values for RVU-based services.   This will affect RVU-based pathology tests.  Entry point here.

Tuesday, July 17, 2018

July 16-17, 2018: CMS Panel Debates New Test Pricing; Value of R&D?; Transcripts

CMS is pricing almost 100 new CPT codes (including PLA codes) for CY2019.  After a public comment meeting on June 25, 2018, on July 16-17, CMS is holding two all day sessions of its laboratory advisory panel to debate the crosswalk/gapfill issues.
  • For the CMS new test price webpage see here.
  • For the CMS youtube channel (both streaming) see here.

  • Unofficial Transcripts:
  • Monday Morning HERE
  • Monday Afternoon HERE
  • Tuesday Morning & Afternoon HERE.
In 2016 and 2017, CMS both streamed and archived video of these lab policy sessions.  This year in 2018, CMS has not posted archive video of the June 25 session and it is to-be-seen if they will archive post the current live-stream advisory sessions.

Crosswalk Valuation and R&D?

CMS's statute for crosswalk and gapfill of new tests is at SSA 1834A, as created by the PAMA law of 2014.  

Payment for the test shall be determined—
(A) using cross-walking (as described in section 414.508(a) of title 42, Code of Federal Regulations, or any successor regulation) to the most appropriate existing test under the fee schedule under this section during that period; or
(B) if no existing test is comparable to the new test, according to the gapfilling process described in paragraph (2).
(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.

42 CFR 414.508 states that crosswalking is used "if it is determined that a new CDLT is comparable to an existing test, multiple existing test codes, or a portion of an existing test code."   

Neither statute nor regulation, then, describe what "comparable" means.   (For example, is one new car the most comparable to any one of ten existing cars when they are the same brand; or the same color; or the same body style; etc.  Which of these things is most like the other?)

At 81 FR 41039, CMS remarked that crosswalking "is used when a new test is comparable in terms of test methods and resources."  Elsewhere, CMS has also stated to the public what information CMS requires from the public to make a crosswalk decision, which is fairly detailed and broader (clinical purpose of the test, etc.; see 71 FR 69703) and it wouldn't make sense to request and require that type of information if it were not germane to its crosswalk decision.  [I believe this was in prior but fairly recent rulemaking on the crosswalk/gapfill processes].

Resources to Perform a Test Include Marketing and R&D 

In regard to ADLT pricing (81FR41-56), CMS writes that "we view the statute as intending to award special payment status to the one laboratory that is expending the resources for all aspects of the test - developing it, marketing it to the public, performing it, and selling it."   Even without this confirmation, it would be clear to me in plain English that for any test "resources required to perform a test" included having a lab to put it in (some amount of overhead) and having developed it (you have a test to do in the first place, whether protocol and reagents assembled and developed to implementation by one lab or by the kit manufacturer.)

CMS is obligated to provide an explanation of how it chooses either crosswalk or gapfill rates (81FR41086).  However, this explanation is sometimes telegraphic ("We determined that Code A is most similar to Code B.")   

Footnote 1

PLA codes are easily created and sometimes the lab is not even around by the next summer when the crosswalk meetings arise.  For examlpe, Armune Bioscience got PLA code 0021U in October 2017, but the lab closed in January 2018.  Expert panelists carefully debated how to price this no longer existing test.

Footnote 2

Statute requires crosswalking to "the most" appropriate test.  This suggests that if CMS chooses B of choices A,B,C, you could argue that A is "the most" appropriate.   Regulation only requires CMS to crosswalk to "an" appropriate test.  Here's the difference.  This suggests that if A, B, C are all potentially appropriate, and if CMS chooses "B", it has chosen "an" appropriate test of several, and you can't argue that A or C was most appropriate.   (If push came to shove, the statute should overrule the regulation.)

Footnote 3

Audio transcript from Youtube streaming conference, commissioned from REV.COM by Bruce Quinn Associates LLC

Friday, July 13, 2018

Statement of Work for Michael Cohen's $1.2M Consulting Contract with Novartis

In articles on July 13, 2018, Boston STAT discussed Michael Cohen's work as a consultant for Novartis, including the release of 249pp of related Hill documents.  Here, here, here.

The statement of work for the Novartis contract paying "One Million, Two Hundred Thousand Dollars" is clipped below.


For November 2018 follow up, interview with Novartis here, Senate document re Novartis here and pdf here.

Thursday, July 12, 2018

Brief Blog: CMS Releases Physician Proposed Rules for CY2019

On July 12, 2018, CMS released the "inspection copy" or typescript of the CY2019 physician fee schedule proposed rules.  Comments are open for about 60 days (about September 10, 2018).

The Federal Register home page is here; access the typeset 665 page PDF directly here (83 Fed Reg 35704-36386, published 7/27/2018).  CMS fact sheet here.  The CMS rule home page with twenty links, attachments, and zip files is here.

  • Nerd tip: For me, the 665 page PDF downloads as a frozen or "locked" version.  In my PDF editor, I can "extract" all pages and save as "new" 665 page .PDF file which is no longer locked, so I can highlight, annotate, etc. 

Coverage at MedPageToday here; MobiHealthNews re telehealth, here; also here.  More on telehealth rules from Foley Lardner, here; Drinker Biddle, here.

Coverage focusing on E&M changes here, here, here, here. Here, here.  WSJ CFO page, here.

In a press release, CMS framed the rulemaking as "historical changes that increase the amount of time doctors and other clinicians can spend with their patients by reducing the burden of paperwork" (here).   The changes are part of the CMS "Patients over Paperwork" initiative.  CMS's goals to reduce regulatory burden and paperwork are not limited to physician paperwork: in April, CMS proposed to kill dozens of reporting requirements for hospitals as well.


CMS proposes to streamline E&M documentation, reduce some physician staff supervision requirements (in radiology), and pay clinicians for telehealth services like short calls that avoid an office visit and review of patient-submitted photos.  For the latter, see p. 63ff, especially pp. 66ff, and early coverage at Forbes here.

Regarding telehealth  policy, CMS takes a new spin on its statute.  CMS has generally only covered "face to face physician services," with a few exceptions like a monthly fee for care management.  However, the statute allows coverage of "physician services" per se - without restriction.  CMS takes the position that the restriction on limited telehealth for office visits (from rural areas only) is actually a creation of the telehealth section of statute.   Where the legacy telehealth statute for office visits doesn't apply, CMS can create more flexible telehealth on its own (!), as it does in this rule.  This is most especially true where the "physician services" are new and not inherently face to face.  Intriguing viewpoint.

In more detail, I discuss below mass re-indexing of equipment and supply prices, and rulemaking re PAMA lab definitions.

Streamline Measures & E&M Rules

MIPS reporting of quality measures will be pared down by axing what CMS calls low-value measures.  34 topped out process measures will go away.

There will be a mass simplification of rules for E&M visit pricing (details herehere).

Roll Over, RUC: ReIndexing Supply and Capital Equipment Pricing

On page 50ff, there is discussion of better approaches to market-based supply pricing (for RVUs);

PAMA Section 220 gave CMS wide new authorities in this regard (as I discussed in 2015 here).

Interestingly, a large contracted research project found "there was no statistically significant difference between estimated commercial prices and current CMS prices for both equipment and supplies."

But individual prices will change under a proposed shift over 4 years to new input prices.   Bringing a smile to my face, they elected to  illustrate this four-year phase-in with a hypothetical product that is paid $100 now but will get a new price of $200.  See figure at bottom.

See Zip file at CMS here.  This includes a 57-page report by consultancy StrategyGen.  This includes new prices for 1300 supplies and 740 equipment items (capitalized items).

While total average prices won't changes, shifts will be large.  The tables list CMS supply codes, not product types, so they're a bit cryptic by themselves.  But for example, the price of ED004 (6MP camera) will drop from $946 down to $152 (16%), and the price of ED017 (brachytherapy workstation) will rise from $105,403 to $281.580 (267%).   Supply SA051 (pelvic exam pack) will rise from $1.17 to $20.16 (1720%) while SA046 (laparotomy drapes) drops from $26.12 down to $7.26 (28%).  While CMS plans to use these "market prices" rather than GSA product acquisition prices, but where available, GSA prices are listed in a separate table for comparison.  For example, Angiography Room EL011 has a CMS price of $1.4M, and new target of $1.1M, and a GSA price of $229,145.  (There are some cases where GSA prices are higher than CMS, though).

Article on "rethinking the RUC," here.

As a tidbit of digital health, there is a discussion of the input price for Breast Biopsy Software EQ370 (p 57).   (They declined to add software as a line item cost input, but because there is already a global entry for "MR room equipment package EL008").  In current equipment tables, EQ370 is "Breast MRI computer aided detection and biopsy guidance software" but has no dollar value.  For very elaborate debates in Fall 2017 on OPPS APC handling of Heartflow software services, see here.

Lab Industry: PAMA Revisited At Length

Minimal rules directly affect the lab industry.  CMS proposed to reduce the minimum lab volume for PAMA reporting from $12,500 to $6,250 and requests comment.

Notably, on page 405ff, CMS proposed to consider new definitions of a PAMA reporting laboratory that might include more hospital-based labs.  For example, CMS opines whether the law requires them to include Medicare Advantage (Part C) revenues when making certain PAMA determinations for eligible labs.  Discussions of how to define laboratories by TIN run from 410ff; CMS recognizes there is a debate (not to mention a lawsuit, and the lawsuit is not mentioned) on this topic.  Net-net, CMS lands on "no change" but invites comment at 413ff.  Absent the ACLA lawsuit about PAMA, it's unlikely we would have seen 20 pages of discussion of these policies today.

In summary, CMS proposes to exclude Part C revenues from eligible lab definition, but only proposes to consider alternatives to how it handles hospital lab eligibility otherwise.

CAP prepared a table of revisions to PFS pathology prices, here.  Big gains for computer assisted tumor IHC.

"No News is Good News?" Department

No use of the words genetic or genomic in the rule.



CMS picked cheerful illustrative hypothetical of price change

MolDX Posts Final LCD For Guardant G360 Gene Panel Liquid Biopsy Test

MolDx has posted the final version of a positive coverage LCD for the Guardant G360 gene panel liquid biopsy test, with coverage for advanced lung cancer patients.

Proposed coverage was initially posted in May 2017 (see here).   Finalization was likely delayed due to the CMS NCD for next generation sequencing in cancer patients, which was under public comment and CMS decision-making from November to March.

A live link to the LCD is here for L37699.  The public notice period started July 12 and the LCD is effective on August 27, 2018.


Coverage falls under two scenarios:

  • At Diagnosis - when results for EGFR, ALK/ROS1, BRAF are not available AND tissue testing is infeasible (e.g. biopsy contraindicated or insufficient tissue);
  • At Progression - for progression on or after chemotherapy or immunotherapy for patients who lack tumor typing for EGFR, ALK/ROS1, BRAF or for patients progressing on TKIs.
For full details see LCD.   Recent NCCN guidelines for use of LBx are cited explicitly.  

The LCD has 21 literature citations.   MolDx also published a lengthy document responding to public comments over the past year.   See A56038, here.

Guardant Health

Guardant Health has announced clinical trial collaborations with BMS, AstraZeneca, Merck, Merck KGaA, and Pfizer (here), and is being used in an important basket trial in Japan (here).  The company had 29 abstracts at ASCO (here) and recently published the large accuracy comparison between tissue and liquid biopsy (here).  For a press release on the new LCD, here.

In the Cloud

I've also put the PDF LCD and PDF Article in the cloud in a zip file, here.  


Nerd Note

For the last several years, most MolDx LCDs have featured an increasingly detailed analytical validity table and discussion within the LCD body.  See for example last fall's AlloSure LCD.   Although the G360 test underwent detailed technical analysis by MolDx, this LCD doesn't include the detailed analytical performance data that MolDx has been including in LCDs.  Possibly this is a new pivot in the LCD template used by MolDx.  

Wednesday, July 11, 2018

Very Brief Blog: CPT Lab Proposals for September 2018 - AMA Has Posted for Comment

AMA posts the titles of applications for new CPT codes a few weeks after the submission deadline, and thus a couple months before the relevant AMA CPT editorial panel meeting.

Of note, AMA posts the lab codes on a somewhat earlier cycle than other CPT codes.

Track the webpage for the September 27-29 2018 AMA CPT editorial panel meeting here.   The registration link is open.

See the public agenda (code titles) for new codes here, posted around July 9, 2018.   You can request a copy of a given application file by August 1, and you are asked to submit written comments by August 6.    There are currently 6 applications on the September agenda.   One is for confirmation of a recessive gene encountered during partner testing (family planning); one is for PIK3CA (either germline or somatic).  Two are MAAA codes, one for cutaneous melanoma and one for uveal melanoma.   Three are code revisions of administrative MAAA codes (0002M, 0003M, 0011M). 

Very Brief Blog: CMS Updates, Delays Implementation of Lab "Date of Service" Rule Changes

During the week of July 4, 2018, CMS quietly updated its special webpage dedicated to "Laboratory Date of Service Policy" issues, and now requires "enforcement discretion" for its date of service rule changes made last fall.   The enforcement discretion runs to January 2, 2019.

Since around 2008, CMS has required both pathology test and clinical lab test samples to be processed with the claims date of service equal to the date of specimen collection.  When the date of service fell during an hospital outpatient service day or coincided with the duration of an inpatient stay, payment rules followed hospital policy rules (often resulting in payment bundling.) 

In fall 2018, CMS announced a change, with the net effect that a human molecular test from a hospital outpatient specimen could be billed by the lab that performed the test, rather than the originating hospital.   For example, an Oncotype Dx breast cancer molecular test on a July 1 outpatient hospital biopsy in Chicago that was performed on July 5 by Genomic Health in California, could be billed to Medicare by the lab, not the hospital.

On the DOS page, CMS regularly updates a listing of the codes which fall under the "exception."  Newly on June 23 and July 7, CMS added documents describing enforcement discretion until 2019.   During the discretionary period, either the originating hospital or the providing laboratory can bill CMS for the test, but not both.

The CMS transmittal on the policy is CR10419, Claims Transmittal 4000, March 16, 2018, here.

A 3-page June 28 FAQ on the policy is here.

Two PDF documents (one a policy, one a new Q&A on the policy) are under a Zip file on the DOS page at the bottom (zip link should be here). 

In their versions as available on 7/11/2018, I've put the six relevant documents together into one a cloud zip file:

  1. Excel of applicable test codes
  2. PDF explaining the above
  3. CR4000 from March 2018
  4. June 28 PDF Q&Q
  5. July 4 policy deferral to 2019
  6. July 4 Q&A on the deferral

Monday, July 9, 2018

Very Brief Blog: CMS Tricky Instructions for July 16-17 Dx Test Pricing Teleconference

On Tuesday, July 3, 2018, CMS released some special instructions for those who want to watch, or potentially comment on, the July 16-17 agenda of the Clinical Diagnostic Laboratory Test Advisory Panel.   This panel will discuss their recommendations to CMS on pricing of new 2019 lab test codes.
  • Go to the CMS CDLT Panel page here 
  • Scroll down, looking for the Agenda PDF and Zip File List of codes for the July 16-17, 2018 meeting.
  • On Monday and Tuesday, the meeting runs from 6 am to 1 pm Pacific time, 9 am to 4 pm Eastern time.
I've clipped the core instructions below.  Register with CMS by July 12 if: you were a presenting stakeholder at the June 25 public meeting.  Use the other set of instructions for Youtube access and phone lines if you did not.

click to enlarge

click to enlarge
The 11-page CMS PDF file gives you instructions for several different ways to log on, a high-level agenda (clipped above), and more granular agendas.     The ZIP file gives you a 100-row spreadsheet of code names and full AMA CPT text descriptors.

Very Brief Blog: Association Crosswalk Comments (CMS CLFS Mtg, June 25, 2018)

CMS New Code Pricing
On June 25, 2018, CMS held its annual public meeting for pricing decisions on new or revised laboratory test CPT codes.   See the CMS home page here.

Video Archive of Meeting ?? 
In recent past years, CMS usually archived the whole meeting on video at the CMSHHSGOV channel of Youtube.  I haven't found a posting of this meeting yet, although on the day, it was live-streamed.

AVAILABLE HERE: Major Association Comments (Zip)
Four major lab organizations presented decks at the workshop, and also provided CMS a detailed pricing proposal list in Word or Excel, since there were so many codes.   See materials for AMP, CAP, ACLA, and ASCP as a zip file in the cloud here.   Associations may have submitted additional or revised data after the meeting.

Next Up: Advisory Panel July 16/17
Note that CMS will host an online video two day webinar on Monday/Tuesday, July 16/17, 2018, when it convenes its Clinical Laboratory Advisory Panel to comment on pricing the new codes.   (There is no on-site audience for this event; spectators by video only.)   More info here.

Sunday, July 8, 2018

Very Brief Blog: FDA Guidance on Simpler Clearer Drug Labeling: Clear Thinking, Clear Writing?

Tucked into the July 4th holiday weekend, the FDA issued a press release and guidance document that aim to bring about more clear, concise, and meaningful drug labeling.

  • See the FDA's press release here, the draft 20p guidance here, and a MedPageToday article here.

While this may seem like cause for a long yawn, there's a bit more to it.  We should be alarmed when we see insipid rules or sloppy thinking in prose, and this guidance aims to reduce it.   While the guidance is specific to drug labeling, some of the thought capital for indications for use can probably be generalized to devices, diagnostic tests, and so on. 

The guidance also discusses what limitations and contraindications are reasonable and helpful to add to labeling and which are not.  It urges that clinical trial results be on-point and described concisely and clearly.

The guidance discusses when indicated populations should be simple - "lung cancer" - and when more detailed "Stage 3 lung cancer over age 60."   It discusses when therapy can be stated simply - "for treating psoriasis" - and when more detailed - "for reduction in duration of acute relapses in multiple sclerosis."  There are several call-outs to the correct handling of biomarker descriptions and populations.

Devices often have both intended uses and indications for use, and the differences can be cryptic or irregular.  But in the simplest explanation, the child's version with training wheels, an intended use is what the device does and often from the perspective of the clinician - device to surgically excise prostate tissue.  The indication for use is a typical patient - patient with bladder obstruction requiring reduction in prostate tissue.  510k decisions generally hinge on the broader utility, the "intended use" such as "surgically excise tissue."

Not directly related to this guidance, the FDA also tries to avoid "pseudospecificity" - for example, a drug approved to treat depression in people with blue eyes.  Yes, you could do a trial only in people with blue eyes, so it meets the "trial design" test, but it wouldn't pass a "sniff test" or "common sense" test.  You might have an antifungal approved to treat fungal infections of the foot, but you can't have "the only antifungal approved to treat infections of the left foot."   The resulting label would be "pseudospecific" and, like a half-baked patent idea, it would hopefully be caught and nixed before publication.   However, this also shows that you can't do regulatory science without judgement, as there's no simple written rule that tells you if a label or trial design veers into pseudospecificity rather than a legitimate targeted population.

Thursday, July 5, 2018

Very Brief Blog: Article Suggests Criminal Insider Trading Convictions Easier than Civil

Staff at CMS and FDA are rigorously instructed not to release pre-public data or decisions, and exceptions seem to be rare.   But exceptions do occur, and often end up both in court and in the media.

One case that has percolated for years came to several convictions in May 2018.  In this case, based on available news articles, a CMS consultant (Blaszczak) obtained information on pending rules from a CMS employee  (Worrall), and passed the information forward to several investors.   For a mid-trial article, here.  For an article after the jury convictions, here

On July 2, 2018, New York Law Journal published an open access article on the case by Abramowitz & Sack of the Morvillo law firm.  Here.

The authors make the point that prosecution made charges under two different statutes:
  • 1934 SEC Act, Rule 10-b-5, civil
  • 2002 Sarbanes Oxley Act (Title 18), criminal
Jury acquitted under SEC Act civil charges, which by now require 10 different points of law to be satisfied (40 pages of instructions to jurors).   It was actually easier to get criminal convictions under Title 18 Sarbanes Oxley (instructions only 4 pages long).   

The authoring attorneys note it is quirky to have a situation where the same actions are more easily prosecuted on criminal rather than civil grounds.    They also note that many insider trading cases have been prosecuted only under SEC civil law (often with not-guilty findings) but that in the future prosecutors may go for an easier win under Title 18.




For a bundled PDF including the transcript testimony of former CMS administrator Jonathan Blum, here.   

Tuesday, July 3, 2018

Very Brief Blog: Deloitte Issues 28-page Report on Real World Evidence

Update.  within the same two weeks see also:

  • Scott Gottleib announces new FDA initiative and funding for RWE (here).
  • Interview with Amy Abernethy at Nature Reviews Drug Discovery on RWE (here).


Real-world evidence has been on a roll in the last several years, including a bit of a tailwind from the 21st Century Cures Act.   FDA now has a home page for RWE,  a 24-page 2017 guidance document, an archived 2017 webinar, and a recent call-out in an April 2018 blog by Janet Woodcock.

See hundreds of articles with the key phrase "real world evidence on Pubmed, here.

New this week, a 28-page report on the status of RWE in biopharma for 2018 from Deloitte.  

  • Trade journal article here.
  • Deloitte home page for the report, here, with online summary and link through to the PDF.