Friday, August 31, 2018

House Messages CMS: Asks CMS to Address Panel Unbundling

Each year, annual budgets prepared at House and Senate come with something called "report language" which describes something of the rationale and purpose of the budget and may make numerous requests of an agency to look into one matter or another. 

This summer, the (health related) report language for House is  here and for Senate is here.

CMS and Chemistry Panels

CMS for decades has bundled together tests following CPT codes for common chemistry panels.  A ten-analyte panel might pay $15 as a panel even though each component tallied as a separate test might pay $60 or more.   With PAMA in 2018, CMS dropped the panel bundling rules and right now - if a set of tests fail to meet the exact definition of a panel - CMS pays at the individual line item rates. 

I discussed this for clinical chemistry in a blog in November 2017, here.   As shown in a clipping at bottom, 80053 panel had 29,000,000 uses at CMS.   If paid at the $13 panel cost, this is $377M.  If paid at the stack code analyte rate it's $82.88 or $2.2B.   The same thing can also happen in genetics; as shown in another clipping at bottom, CMS pays for Lynch panels as 81435+81436=$1444, but the genes included at a la carte prices look more like $3,334.

The message from the House to HHS regarding panels is:

"Clinical Laboratory Fee Schedule.  Inconsistencies in panel testing reimbursement in Medicare should be resolved to prevent wasteful government spending.  The Committee encourages the Administrator of CMS to develop and issue a panel pricing policy that ensures the agency is not paying more for a single clinical diagnostic laboratory test, or a group of individual clinical diagnostic laboratory tests, than it would pay for a clinical diagnostic laboratory testing panel that tests for the same analyte(s).  The Committee encourages the Administrator to apply the policy to all types of test panels."  (House report language, page 89.)

(See also a November 2018 GAO report on the same topic, here.)

OIG Guidance Now Dysfunctional

Labs can follow official OIG guidance, and it leads toward stack coding, not panel pricing.

OIG guidance discourages panel ordering, and encourages physicians and labs to provide only the most precise list of medically necessary tests.  If any one test on a ten analyte panel isn't necessary, then bill the 9 tests, please.   This guidance was written in an era when panels paid a fraction of the single test costs, BUT ALSO, coding and pricing with special rules meant that analyates could only pay LESS than a panel.  (E.g. 9 analytes would pay right about 90% of a ten-analyte-panel.  Today the nine analytes might pay 800% more than the ten-analyte-panel.)

MolDx Releases Set of New LCDs

A Genomeweb article on August 30, 2018, notes that MolDx has released a draft LCD favorable to the Veracyte test Envisia, for pulmonary fibrosis (here).

Four other draft LCDs were also released on the WPS MAC website.  MolDx LCDs may appear first at any MolDx-participating MAC, depending on the various MACs' calendars.

A search of new LCDs this week is available via the CMS LCD database (here).  I've put a bundle of five new MolDx LCDs in the cloud here.

ClonoSEQ (MRD)
In DL37917, coverage is proposed for the ClonoSEQ Assay for minimal residual disease (MRD) in certain lymphoid malignancies.  Analytical validity is cited to "data on file" at Adaptive that is "designed to meet FDA standards" (LCD fn 15).  Guidelines and several validity studies are cited.  MolDx summarizes that "studies have demonstrated the accuracy and clinical utility of clonoSEQ in predicting clinical outcomes in a variety of myeloma settings and timepoints."  Validity in acute lymphoblastic leukemia (ALL) is discussed separately.    While separate coverage is described for myeloma and ALL, criteria are factors such as use in transplant decision-making, as a test for drug therapy response, and testing for sustained MRD "per guidelines at time" as indicated in various guidelines for hematopoeitic MRD.

Veracyte Envisa (Lung disease)
In DL37919, the Veracyte Envisia test will be covered for diagnosing interstitial lung disease in patients who lack a definitive CT pattern and where a bronchoscopic biopsy may be used instead of a surgical lung biopsy.   MolDx notes it consulted specialists from Mayo, Columbia, and USC in addition to its own review.  Criteria for coverage including high resolution CT (hrCT, defined as 1mm reconstructions) which are not definitive.

Invivata InvisionFirst (Liquid Biopsy)
Inivata is a lab dedicated to liquid biopsy testing in oncology.  In DL37921, its LBx test ("InvisionFirst") is covered at diagnosis or at progression in lung cancers that are advanced stage and meet criteria for missing genomic information.   Earlier this year, MolDx covered the Guardant G360 test under similar conditions.

 MyPath Melanoma (Ambiguous Cases)
In DL37923, the MyPath melanoma assay from Myriad is covered for "diagnosis or exclusion of melanoma" in a biopsy when ordered by a board certified dermatologist; the cutaneous neoplasm is ambiguous by histology alone; and the uncertainty impacts the patient such as risk of re-excision and sentinel node biopsy.   According to the LCD, two validation studies assessed concordance compared to histopathological experts.  (This is obviously good, but doesn't directly address the accuracy in cases where histopathology has no diagnosis and experts disagree.)  A third study looked at outcomes at a median of 6 years in 182 prior biopsies.

Decipher Prostate Prognostic
In DL37911, the Decipher prostate prognostic test is covered in low-risk prostate cancer as defined by NCCN.   MolDx has generally granted earlier coverage for prostate risk tests in low risk disease, where the test is most likely to verify a low-risk, lower intervention stance is justified (as opposed to deselecting therapy in higher risk cases).   I suspect this must be a new LCD only for the WPS MAC and has existed in other MolDx MACs.

Several of these assays are NGS assays in cancer, so the LCD should be in compliance with the recent CMS NGS NCD for uses of NGS in cancer.  For example, the Envisia LBx test LCD states, "May be used once per lifetime," following the once-per-patient requirement in the NCD.

Statements of "Promising Data"

Some LCDs include concluding evaluations that data is "promising" and that ongoing coverage is dependent on forthcoming publications.  For example, in DL37919, we read:

"The clinical utility of the Envisia genomic classifier to aid in the diagnosis of patients with an ILD of unknown cause and suspected of IPF, as defined in the intended use above, is quite promising. This contractor believes that forthcoming clinical studies in these patients will demonstrate improved patient clinical outcomes. Continued coverage for Envisia testing is dependent on annual review by this contractor of such data and publications."

This isn't universal, e.g. the MyPath Melanoma LCD  and Inivata LCD don't have this concluding test, and the other three do have it, even though the MolDx evidence ratings shown for ClonoSeq are a bit higher than for MyPath.

I'm not sure how precisely MolDx, or its differently reviewers, classify evidence by "quality, strength, and weight" (see my blog on these MolDx terms here).   With that warning, below is a table with the ratings for the five LCDs discussed today.

Note that the  last row, "Total Citations," is not the citations of the product, but the total citations used throughout the LCD discussion. 

click to enlarge

Thursday, August 30, 2018

Very Brief Blog: The Swing to FDA Approval: FMI Discontinues F1 Test for CDx Test

I may not be the first one to hear it but I heard today:  Foundation Medicine is officially turning off the production line on its F1 test.   According to its website, "On September 28, 2018, FoundationOne will be discontinued.  All [orders] will automatically be converted to FoundationOne CDx."

Website here.  This appears initially as a headline banner.   Web clip below. 

FMI's last SEC report (before its acquisition inside Roche) was in early August; unless I missed something, I didn't see an explicit reference to discontinuing F1.  In that report, it sounded like FMI was billing its CDx test to Medicare via Massachusetts and its LDT test to Medicare via North Carolina.   I don't know if the F1 discontinuation means its CDx supply line in Massachusetts can handle all volume or its North Carolina lab was upgraded to CDx. 

FMI will continue to provide Foundation Heme and Foundation Liquid Biopsy ("ACT") tests as LDTs for the present.

Wednesday, August 29, 2018

Very Brief Blog: MolDx Analysis of Evidence "Quality, Strength, and Weight"

The 21st Century Cures Act requires LCDs to provide rationales for their decisions and a summary of evidence considered.   For an overview, see here.  For the actual 197 words in 21CC about LCDs, see here.

CMS may eventually provide a substantial rewrite of the LCD manual (the current manual is here).  In the meantime, CMS requires LCDs to have one demarcated section which is a "summary of the evidence" and another section which is an "analysis of the evidence."[*]   (This is exactly the same format used in NCDs.   Generally, a "summary" is objective and an "analysis" assigns interpretations, critique, and value judgement.)   

An example of an NGS MAC LCD for a surgical procedure which includes detailed "summary" followed by detailed "analysis" is here.

MolDx Quality, Strength, Weight

MolDx LCDs over the last year have provided a summary assessment of diagnostic tests categorized as "Quality, Strength, Weight."   Frankly, even with a decade of consulting and several publications under my belt, I wasn't sure I could predict exactly what MolDx authors meant by their use of these three words.   Discussion at a California Clinical Laboratory Association meeting this month helped clarify the meaning.

Quality refers to the quality of the trial and study design.  For example, a randomized controlled trial that is double-blinded is higher quality than a retrospective case series.   This is close to a fairly classic "level of evidence" hierarchy (level of evidence 1,2,3,4, etc).  This metric focuses on quality of the trial or study; a 1000-patient RCT may be a very high quality trial, even if it shows the therapy under study is neutral or harmful. 

Strength is the strength of the resulting evidence for Medicare purposes.   For example, a study conducted in children in a country with a wholly different health system and alternatives could be a 1000-patient RCT, but it would have low "strength" for Medicare decision making.   Strong evidence would be large effects accompanied by low p-values, and strength of evidence is additive across multiple trials.   Evidence for Medicare coverage has less strength if it is 95% in patients age 40-55, and not the main Medicare age of >65.[*] 

Weight of evidence is conclusory:  Given the evidence reviewed (perhaps other evidence from other studies, guidelines, or alternatives), how strong is the weight of evidence for Medicare coverage.  Although I am adding my own terms, I suspect the weight of evidence would be strong if it is easy to conclude that, all factors and concerns in the balance, the benefits considerably outweigh the risks or uncertainties. 

Snapshot from a MolDx LCD

[*] The requirement to discuss and summarize evidence considered, and then provide an "analysis" of that evidence, would tend to prevent blanket non coverage LCDs.  For example, an LCD that simply lists 100 Category III codes with a sentence stating they are noncovered would not meet the standard of summarizing and analyzing any evidence for the 100 different services represented by the codes.

[**]  I believe "weight" of the evidence would include the concept, seen in some health technology assessments, is additional evidence likely to materially change the estimate of benefit or risk.  For example, over a large population, there have been very large studies of mammography, and it has a benefit, but/and the benefit is fairly small.   It is unlikely another new study would find that mammograms are harmful or that they have a huge benefit. 

Very Brief Blog: New Medical Director at CMS MolDx Program - Dr Paul Gerrard

The Medicare special contractor program for genomic tests, MolDx, has a new interim medical director, Dr. Paul Gerrard.   Labs who work with the MolDx program have begun receiving emails about the transition in staffing and it was discussed this week at the California Clinical Laboratory Association.

Dr. Gerrard is a Harvard-trained and board-certified physiatrist.  His Linked-In is here.   He holds an MD from Medical University of South Carolina (2009).

Dr. Jim Almas, the senior medical director for MolDx from mid-2017 to August 2018, has retired from that position.   Almas had previously been part of the CMS coverage group in Baltimore (2016/2017), and he had held senior management roles in several large hospital systems.   (Linked-In here.)

According to several sources, MolDx has plans to bring on additional medical director staff this fall.

Wednesday, August 22, 2018

My Short Deck on LCD/NCD and Combination Diagnostics: For NextGenDx Conference in DC

This week is the 1000-person NextGenerationDx conference in Washington, here.

This afternoon I have the chance to present a concise 15-minute PowerPoint deck on changing CMS policy for combination diagnostics - both the LCD and NCD levels.    

The presentation is in the cloud as a PDF here.

Monday, August 20, 2018

Two New Research Studies Propose Updated Approaches to Medicare Dx LCDs

Classically, a new diagnostic test is created and its developer produces a series of studies showing it is clinically valid and has strong clinical utility in patient care.    In two articles I ran across this month, studies are run and published to show potential improvements to existing generic (not product-specific) LCDs.

Lynch Syndrome

The first is a paper in JAMA Oncology by Hampel et al. of the OSU with coauthors from U.W./Seattle, here  Both Ohio and Washington are "MolDx" states and cover Lynch syndrome testing under LCD such as L36161 or equivalents.  See here  This LCD covers Lynch testing through a fairly convoluted system of steps and pathways (see AMP's original comment here.)

Hampel et al. provide data on 419 consecutive CRC cases worked up for Lynch syndrome with NGS panels.  They report that "Up-front tumor sequencing in CRC is simpler and has superior sensitivity to current multi-test approaches to Lynch Syndrome screening."   They also note that Lynch testing (which is recommended now in all colon cancer cases) can thus be performed in parallel with driver oncogene testing for therapy selection. 

HBOC Syndrome

The second is a paper in Annals of Surgical Oncology by Yang et al. which in its title directly addresses Medicare policy criteria (see article here.)    A relevant policy is the MolDx hereditary breast and ovarian cancer LCD (HBOC; e.g. here.)    Medicare requires that a patient already have a personal history of breast cancer, unlike USPSTF guidelines for BRCA testing.   However, even leaving that in place, the authors note that among 4196 Medicare patients, the rate of BRCA positivity was about 9-10%, within and without Medicare's additional criteria.   This "suggests the need for significant expansion and simplification of Medicare criteria." 

Under the suggestion, Medicare patients would still have the entry criteria of personal history of breast cancer.   However, that would become the main requirement.  (For a biomarker test, in a breast cancer patient, does Medicare "have to" require an additional family history besides the cancer itself? No, it doesn't in the case of Lynch syndrome biomarkers in colon cancer nor in the case of e.g. Her2 biomarkers in breast cancer, to give two examples.)  

Levels of Evidence?

The levels of evidence in the articles above would argue to fairly simple standards for policy change.

Genomic Lynch testing overlaps with targeted therapy oncogene drivers (e.g. in a panel test), and simply has superior sensitivity (fewer false negatives).   The current HBOC criteria seem to serve no purpose (segregating patients with 9% vs 10% risk) and are therefore not objectively justified. 


Under recent law for Medicare creation of preventive services, the agency could open an NCD to determine that the USPTF benefit for BRCA testing in women without a personal history of breast cancer should be applied to Medicare patients as well.   Medicare has never opened this particular NCD topic.

Saturday, August 18, 2018

Two Precision Medicine-Related Conferences in Nashvillle, September/October 2018

Two precision medicine related conferences in Nashville in September and October 2018.

The first is sponsored by the "Precision Medicine Institute" and focused toward hospital CEO's.   See:

Nashville, September 12/13, 2018, "Breakthroughs with Genetic and Precision Medicine: What All Health Network CEOs Need to Know."  Conference website here.  Anchor sponsors are Illumina and Roche.  (Note that Roche now includes FMI and Flatiron.)  Many speakers from Vanderbilt (Center for Precision Medicine here.)

A few weeks later, see the "Second Annual Genetic Health Information Network Summit," Nashville, October 1-3, 2018.   Conference website here.

In other news, the American Society of Human Genetics (ASHG) will be October 16-20, 2018, in San Diego (here).     Association for Molecular Pathology (AMP), November 1-3, 2018, San Antonio, here.  And the 14th Annual PMC Conference at Harvard, November 14-15,2018, here

There's also a Health 2.0 "Digital Health" conference in Santa Clara, September 16-18, 2018, here.


For some sidebar comments on the term Precision Medicine Institute, here.

Foundation Medicine's Final SEC Report: Medicare Policy as a Chutes and Ladders Game

On August 9, 2018, Foundation Medicine (FMI) filed its SEC 10-Q [MAY NOT WORK; SEE CLOUD COPY INFRA] for the quarter ending June 30. And on August 10, it filed its 15-12B: its termination of SEC registration and filing duties.

So, with FMI's acquisition into Roche, the August SEC document is the last view into its legacy of New England MAC policies, North Carolina/Palmetto policies, and journey through an NCD to ADLT status. 

I've stored a cloud copy of the 99-page 10-Q document here, with some highlighting.  Below, I use paginated page numbers rather than PDF page numbers (which are 1 higher).

What follows is my bullet-point notes harvested from the long document.  Some tidbits of policy you may need to know as background are at bottom [*].   For a Genomeweb discussion of recent conference presentations by CMS, FMI, Sloan-Kettering and others, August 24, see here.

  • Most reimbursement pages are at page 29 or pages 44-46.
  • Page 8 notes that Roche acquired FMI shares at $137.  
    • Historic share price was $36 on 8/14/2017, $65 on January 1, and about $100 on May 30.  
    • Accumulated losses circa $550M.  Market cap at the end was circa $5B.
    • Revenue for the quarter ending 6/30/2018 was $57M, costs were ($89M), loss was ($33M).
  • Page 2-3 enumerate about 30 bullet-points of the risks regarding forward-looking statements being made by a genomics company:
    • [Risks include] The evolving treatment of cancer...any perceived advantage of our services...sustainability of our competitive advantages...outcomes of clinical trials...
  • Page 6: R&D for the final quarter was $25M or $100M for the year.  
    • For comparison, GHDX and INVITAE had about $50M each in research in the past year; Myriad around $75M.
  • Page 12 notes, "Historically for certain clinical customers, the company deferred revenue recognition until cash receipt..," but current accounting rules lead to estimations for such customers (e.g. BCBS and other payers).
    • Page 11 notes "Due to our out-of-network status with the majority of payors, estimation of transaction price represents variable consideration...estimate [with] a portfolio approach." [**]
  • I believe that page 14 ff [Section 3] describes transactions or projects that overlap specifically with Roche.   
    • These include an earlier $250M investment by Roche; a $150M payment over five years for "access to its molecular information platform;" and enumerated special projects. The latter include cancer immunotherapy and signatures, an immunotherapy testing platform, liquid-biopsy-based TMB, and a ctDNA project.  
    • At page 17,  FMI notes that it will have access to potential developments of F1 or other test properties as Roche Diagnostics IVDs.
  • Several current litigations noted at page 25.
  • Page 27-28 describes major business events such as: the F1 CDx NCD in March 2018, the FDA granting "Breakthrough Device" for FoundationACT (LBx), planned to have 70 genes, TMB, MSI.  Also discussion of a 3-party collaboration with Roche, FMI, and Dian Diagnostics Group for China.
  • One page 29-30, noted that "most of the commercial third party payors that reimburse us do so based upon CPT codes, or based on other methods such as percentages of charges or other formulas that, to our knowledge, are not specific to us and not made known to us."   
    • Read that again!  A huge, powerful, globally-known services company is paid based on methods and rules "that are not known to us."
    • Some claims are processed via third-party (not the primary issurer) entities. (Believe this refers in part to the laboratory benefit management (LBM) industry.
  • As of June 30, not a participant in any Medicaid programs (page. 30).
  • Regarding the local MAC in New England, FMI reminds us that they deferred submitting claims until November 2013.  
    • An LCD at the NGS MAC in New England provides hotspot coverage for 5-50 genes in lung cancer, but "we do not believe this LCD reflects coverage for our services, which include comprehensive analysis of >50 genes and all classes of alterations."  [***] 
    • Adding, NGS MAC "has either denied the F1 or F1 Heme claims we have submitted using stacked codes, or not processed and reimbursed us" in a manner we believe is consistent with applicable processing guidelines.  
    • However, "In August 2016, we began submitting claims for FoundationACT" from Cambridge to NGS MAC with stacked CPT codes, and we have recognized revenue from many of these claims."
  • In January 2017, FMI began submitting claims for advanced lung cancer to Palmetto [MolDx] MAC from lab in Research Triangle Park, paying $3416 per test.  
    • LCDs for other cancers (melanoma, colon, ovarian" have been pending since 12/2016 and not finaled.
  • There is "a current lack of broad coverage decisions among commercial third party payers."
  • The document returns to reimbursement issues beginning on page 44.
    • General remark: Commercial third-party payors and government payors are increasingly attempting to contain healthcare costs by lowering reimbursement rates, limiting coverage of diagnostic services, and creating conditions of reimbursement, such as requiring participation in clinical evidence development involving research studies and the collection of physician decision impact and patient outcomes data.
    • Information on revenue per clinical test circa page 36.  In this quarter, 22,991 tests "reported to clinicians" for $23.8M clinical revenue.  That's about $1000 per test (but allow that tests are current quarter and revenue reflects tests billed in past quarters).  The prior year, there were 15,924 tests reported to clinicians for $12.9M revenue, or $806 per test.  Test revenue on average was growing only very slowly toward the list price and Medicare price of circa $3000.  
    • And more importantly, to interpret the $1000 number, a large part of their volume WAS Medicare, and WAS paying $3000, so the average from commercial payers had to be much less than $800 or $3000.
  • On page 45, note specifically that F1 CDx has two intended uses, one as a CDx (for a number of genes and drugs) and also, one as providing "tumor mutation profiling" [not specifically or only TMB] for professionals to use with cancer patients.  This is important because the CMS covers NGS tests "for intended uses" (with various other requirements). 
  • From March 16-June 30, 2018, FoundationOne CDx [the FDA-approved version highlighted by the NCD in March 2018] was run and billed from Cambridge MA and paid by NGS MAC at $2919.  
    • As of July 1, the F1 CDx will be an ADLT and therefore paid more, at $3500, the current "list charge."
  • The next paragraph is a little convoluted but states it applies "to NGS tests other than those that have been approved or cleared by the FDA."   
    • F1 [non FDA version without the acryonym CDx] will continue to be provided and paid by MolDx/North Carolina, consistent with an NSCLC LCD.   
  • On page 46, they state, "Although we are performing components of our test service for FoundationOneHeme in our North Carolina facility, Palmetto has provided guidance that [CGP] not covered by an LCD is explicitly non covered including FoundationOneHeme."  
    • Adding, "We are still in the process of determining what types of services we may conduct at this {NC} facility. "  
  • Continuing:  "In parallel, we have been engaged in conversations with Palmetto regarding the potential for coverage of FoundationOne claims ...for tumor types other than NSCLC."  
  • A discussion of 14 day rule and changes on page 48.


From page 52 forward, the SEC report has a very long presentation regarding FMI's supplies & service agreement with Illumina.

   It appears that FMI bills its FMI F1 CDx test from its Cambridge, MA [New England] lab, to one MAC, and its F1 non FDA tests via its North Carolina lab to another MAC.
   The MolDx MAC has a longstanding LCD covering comprehensive genomic profiling (CGP; the F1 test) for lung cancer.  For over 18 months, proposed policies for coverage in ovarian, melanoma, colon, have existed but are not finalized.
   The March 2018 NCD for NGS testing in advanced cancer covers NGS tests if they are FDA approved, if they have at least one combination diagnostic, and if they have an indication in the specific patient's cancer.   To my reading, this covers the F1 CDx test in lung cancer, because there is an on-label indication in lung cancer (ALK testing in lung cancer).  But the NCD text also covers F1 CDx test in any solid cancer, because the FDA provided an additional, more generic FDA indication for use as "genomic profiling" for use by physicians in solid tumors.

The discussion of an estimated portfolio of value in payer invoices submitted sounds like tranches of commercial debt; some AAA bonds, some junk bonds.
Codes 81445 and 81455 differ in number of genes (being 5-50, and 51+), but are identical in other respects (e.g. classes of deletions).


While we don't know the distribution of price points paid by those cryptic payers to FMI, we do not the price point distribution for codes 81445 and 81455 in CY2016, from primary PAMA data.  The prices are highly non Guassian.  Bar height shows the "N" of payments to US labs for these codes at various price points from $100 or less, to >$5000.  Data is from 1H2016.

Friday, August 17, 2018

Brief Blog: CAP Keeps Legislative LCD Reform Alive

In its July 31, 2018, open access government affairs bulletin STATLINE, College of American Pathologists notes that its legislation to improve LCD processes is still active.   Statline here, and relevant paragraph clipped at bottom of this blog.

21st Century Cures and LCDs

The 21st Century Cures Act contained a section impacting the writing of LCDs, which I discussed in October 2017 here.  Final LCDs are required to be posted in advance of effective date (that's not new), and are also required to be posted along with a summary of public comments, a response to each comment from the MAC, and a hotlink to the original draft LCD.   In addition, LCDs are required to provide a "summary of the evidence reviewed" and "rationale" for the decision.   Technically, these were already requested of MACs by the Medicare program instructions, but 21CC gave them the force of law and higher visibility. 

There is still much left to local discretion; summaries and rationales can still be variably detailed, "rational," or cryptic.   MolDx LCDs contain an additional heading, "Level of Evidence," divided into a rating of "1) quality," "2) strength," and "3) weight" of evidence (limited, moderate, high), but I've complained that even as an expert I'm not sure exactly how either the 3 categories (or the 3 ratings) are defined.  (What would be evidence with high strength but low weight?  They may know the answer; why not tell us?)

CAP's Legislative Effort Adds to What 21CC Started

CAP and others are pursuing a broader impact than obtained by 21CC, as the "LCD Clarification Act."   They update a map with their Senate and House sponsors, currently 97 (here).  They have an 8 page issue brief online here.  They also have a spiffy infographic here.  I include a clipping from the infographic below (click to enlarge).

Read the full legislation here, H.R. 3635.   MACs must post draft LCDs, hold public meetings, post minutes of meetings, follow these processes in every MAC jurisdiction, and provide rationales for LCDs.  There is also a detailed reconsideration and "reconsideration appeal" process. 

Most of these requirements still require cooperation of CMS or MACs.  For example, rationales or meeting minutes could be cryptically brief despite the statute.   I've seen clients submit 6-page reconsideration request with 5 new article attachments, and the response from the MAC is "Data is not sufficient" which is technically "a rationale," I suppose, but not much of one.

CAP's LCD Infographic

click to enlarge

Medicare humor - We're hearing that CMS is in the process of "revising the LCD manual."  (The LCD manual still doesn't reflect the 21st Century Cures Act of 2016, and we're heading into the fourth quarter of 2018.)   But I also recall that when I joined Medicare in 2004 as a medical director, they were already "in the process of revising the LCD manual" then,  fully14 years ago and counting.  CMS proposed some revisions to LCD processes in rulemaking several years ago, but didn't finalize them.  [For an entry point into 2014 discussions of the LCD process and MACs, see 81 FR 41088ff].


Statline, CAP, 7/31/2018

Pathologists Gain Congressional Support for Medicare LCD Reform

More senators and representatives signed on as co-sponsors to the Local Coverage Determination (LCD) Clarification Act after CAP members lobbied their elected officials to support the legislation that increases transparency and accountability in the LCD process. The LCD bill has support from 97 MEMBERS OF THE HOUSE AND SENATE, with 76 members in the House and 21 Senators. The recent Senate co-sponsors include Sens. Catherine Cortez Masto (D-NV), Doug Jones (D-AL), and Rand Paul, MD (R-KY).
Recently, CAP members flew to Washington, DC, and helped secure support from Rep. Bill Huizenga (R-MI). In addition to Rep. Huizenga from the House, the CAP added Reps. Will Hurd (R-TX), Eric Crawford (R-AR), Adrian Smith (R-NE), Bennie Thompson (D-MS), Bruce Westerman (R-AR), Debbie Lesko (R-AZ), Bradely Byrne (R-AL), Eddie Bernice Johnson (D-TX), and John Duncan Jr. (R-TN) as co-sponsors of the LCD bill.
If enacted the legislation would pave the way for much-NEEDED LCD REFORM. For example, the legislation includes improvements to the LCD process that ensure that medical evidence is not used selectively to deny appropriate coverage to Medicare beneficiaries.
STATLINE will continue to report on LCD updates in the future.

Thursday, August 16, 2018

FDALawBlog posts FDA's 59-page Diagnostics Legislation for Reform of Itself

Update 2019/07.   This blog leads to the 59 page FDA comments on DAIA in 8/2018.  See a July 2019 blog that leads to 18 page HHS comments on VALID in 4/2019.  Here.

Original Blog 2018/08:

Attorney Jeff Gibbs of Hyman Phelps has posted an article at FDA Law Blog where he both discusses the FDA documents in more detail, and posts a public link to them.  
  • Blog here.  
  • FDA two-pager here
  • FDA 59 page legislative document here.
click to enlarge
In addition to Gibbs' blog, see an August 21, 2018, long article at MedTechDive, here.

Brief Background
The lab community has been talking about different versions of the Diagnostics Accuracy and Innovation Act (DAIA) for several years.  A high point was the release of a long Hill draft bill in 2017, which elicited numerous rounds of comments, both at the time and recently.  (Just google the terms DAIA and diagnostics, here).

On August 14, 2018, at FDA Law Blog, attorney Jeff Gibbs both discusses the FDA's legislative document(s) and provides the reader with links to the documents.   Initial trade press did not hotlink the actual FDA documents.

My earlier August 9 blog on the topic still here.

Clip from Jeff Gibbs' August 14 Blog:
     ....FDA’s TA document is not tinkering with the regulatory regime for IVDs. It is a revamp of how all IVDs should be regulated, LDTs and distributed diagnostic products alike.     ....FDA was asked to provide Technical Assistance (TA) regarding legislation, the Diagnostic Accuracy and Innovation Act (DAIA), that is designed to accomplish these and other goals.
     In response, FDA went much further than providing technical comments on the legislation.  FDA has instead advanced a different framework, with different statutory language, which would substantially change the regulatory regime for in vitro diagnostics (IVDs).   As FDA said in accompanying comments, the agency is “taking a fresh look at how the Agency is encouraging the development of innovative tests and continuous improvements to diagnostics already on the market.”  Underscoring that the TA is not just tweaking existing mechanisms, FDA says it “believes it is necessary to create pathways” (emphasis added).
While promising an even more detailed review to come, Gibbs notes:  "Rewriting the laws for IVDs is a complicated business, and every word needs to be scrutinized, both for what is intended and for potential unintended consequences.  There are multiple pieces to the new jigsaw puzzle FDA has proposed."  

Wednesday, August 15, 2018

Very Brief Blog: Legislation Would Cover Know-Error DNA Biopsy Provenance Test; Not Covered by MACs

In a brief tidbit, the MolDx program does not cover the Know Error Test, a DNA test that confirms the provenance (origin) of biopsy specimens.   One focus of test use has been in prostate cancer biopsies.    See the MolDx noncoverage article A55274 here.  For a 2014 article on the product's "Medicare reimbursement snags" see here.

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I ran across a November 2017 article on MedScape (email registration may be required) that legislation to cover the test had been proposed.   For the article, here.  To read the full text of the bill, H.R. 2557, here.

The bill would add this language to SSA 1862(a)(1) at new entry "Q":
^  " in the case of a DNA Specimen Provenance Assay clinical diagnostic laboratory test (DSPA test) furnished on or after the date specified in section 1834A(j)(4), unless the DSPA test is furnished to an individual enrolled under part B who has had a prostate cancer biopsy the results of which are positive, the DSPA test is furnished with respect to such biopsy, and the DSPA test is ordered by the physician who furnished the prostate cancer biopsy that obtained the specimen tested;”
Payment from the bill's (possible) passage, until the year 2028, would be fixed at $200.


The 2014 article ("snags") cites a $30M investment from Nantworks; see 2012 press release here.

President's 2019 Budget Proposes Cutting USPSTF Budget

I ran across the President's 2019 Proposed Budget for AHRQ, which includes a discussion of the sub-budget for U.S. Preventive Services Task Force.  See online here.

A paragraph on page 7 proposes reducing USPSTF budget by -$4.2M to $7.4M.  Stating this will reduce recommendations per year from 12 to 6.   Here.  (For more discussion see PDF pages 27-28).

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Note that many factors go into the final budget from Congress.   The executive branch can propose a large expansion or cut in budget that is unlikely to actually occur in the Congressional budget.  However, the executive branch requests do reflect the positioning of its priorities and messaging.

The budget per review appears to be almost exactly $1M.  Reviews are prepared through exhaustive internal staff research and approved and endorsed by a public board of experts.

The discussion of  "number of evaluations per year" would include new topics as well as revisions of the existing USPSTF library.  A revision requires a very long review and article, just like a new topic. 

The timelines for work products are pretty long.  For example, USPTF announced its was starting a new BRCA policy review in March 2017 and even the draft version isn't out by August 2018.   (There will be another 6 months or more between draft and final.) 

The Affordable Care Act requires US insurers to cover USPSTF-endorsed services, and to cover them  without a copay.  Medicare legislation allows CMS to "import" USPSTF-endorsed services into the Medicare program, after an NCD review that finds the preventive service is applicable to Medicare patients. 


I don't know what the right budget for USPSTF is.   But a simplistic back-of-envelope projection from halving the bandwidth of outputs could be, for example, stopping the opening of new-area topics and doing updates at half the frequency (e.g. from every 4-5 years to every 8-10 years).

MolDx Program Drops "Coverage with Data Development" From Its Handbook

National CED

Coverage with Evidence Development (CED) is a form of gated entry for new technologies into the healthcare payment system.*   The program is most commonly associated with Medicare and, at least until recently, has been uncommon with commercial payers.   Medicare has formal rules for this process and grants national CED through the NCD process.   See the CMS home page for the process here, which lists subpages for 23 topics in CED.

MolDx CDD Rises 

Since early in its program, MolDx has offered "Coverage with Data Development" or CDD.   For a period, all LCDs that included this feature had the term in their titles.  See a 2015 slide describing four prostate test CDD programs here.

For a more recent example, see the Fall 2017 LCD for the Allosure transplant donor DNA test, which lists expected ongoing evidence rules, and these foot closely to a registry.**

CDD Totters

However, over the last several years, CMS central has taken the position that "MACs can't do CED, it can only be done via an NCD,"*** and the differences between CED and CDD were sometimes subtle.

In the past year, we sometimes heard the MolDx term "COA," an LCD with coverage granted on the condition of specified ongoing evidence generation and assessment - coverage with ongoing assessment. 

CDD Falls

MolDx Publication M00106 is its "MolDx Coverage, Coding, and Pricing Standards and Requirements," currently a 15-page PDF  Version 24, July 27, removed the term "CDD" from the possible outcomes of its LCD review process (other outcomes are coverage, non-coverage).

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Scope of CED/CDD

The scope of programs can be large.   The AlloSure kidney rejection CDD study, if it's all Medicare patients, is online at for 300 patients getting (7 first year and 4 second year) tests, or 300X11 or 3,300 tests; ad 700 patients getting (7 first year, 4 second year, 4 third year) tests, or 700X15, or 10,500 tests, or 13,800 tests.  At circa $2500 that is $33.7M (I don't know if all tests would meet LCD criteria).   About 1/3 of that $33M would presumably be paid by Medicare Advantage plans which have to provide coverage matched to the LCD.

Last fall, CMS proposed CED with monthly RECIST imaging scans for PFS in a large number (>100,000) Medicare oncology patients getting gene panel testing.  At $3,500 per test, that would be $350M per year in test costs, and at $1000/RECIST scan x 10 months, $1B in imaging costs. 

The Third Door:  National Investigational Device Studies with CMS Coverage

One often thinks of coverage with evidence development as either the NCD route (as shown above) or the MolDx CDD route (no longer exists).   However, a third path is having an Investigational Device Exemption from FDA for the diagnostic test, using it in a clinical trial that meets Category B Clinical Trial criteria.  CMS reviews the protocol nationally and then grants coverage for devices (tests) used in the trial.   CMS IDE page here.

I don't think the IDE/Cat B/Diagnostic testing route to test payment has been used much, but it has been used (here).


*  I've assembled some articles suggesting that the first equivalent of staged entry and CED was actual 1980 rulemaking for heart transplants; here.

** Current Allosure LCD here.   COA or CDD section of that LCD (as of 8/2018) also archived here. here.

*** The origin of CED is 1862(a)(1)(E) which provides CMS the authority to fund research necessary for the purposes of AHRQ (e.g. for the purpose of improving healthcare in the U.S.).  I am not an attorney, but from the relevant CED Medicare statute 1862(a), I can't tell why CED would necessarily be restricted only to CMS central office and not to LCDs.  Many adjacent bulleted items here in this area of statute, before and after (1)(E), are defined in whole or in part by MACs.  

CDD still appears as of August 15, 2018, in the MolDx webpage M00104 V2, here (archive here).

Thursday, August 9, 2018

California MD-PhD Becomes Head of Diagnostics at FDA: Tim Stenzel

Amidst a significant reorganization of the Center for Devices and Radiologic Health (CDRH), Tim Stenzel MD PhD becomes head of the Office of In Vitro Diagnostics and Radiological Health (OIR).

See an August 6, 2018, article at NAMSA (here) and an August 9, 2018, article at MedTech Insight (subscription; here.) 

The position had an acting director since Alberto Gutierrez PhD stepped down in Summer 2017.   Both Gutierrez and his predecessor, Dr. Steve Gutman, had been long time FDA employees and thus internal promotions to director.

Stenzel is a graduate of Duke's MD/PhD, pathology residency, and molecular genetics fellowship.  He worked successively at Abbott, Asuragen, Quidel, and InvivoScribe where he was Chief Operating Officer 2014-2018.

For a full description of the CDRH reorganization, including OIR, see NAMSA here.  See also a 21-page FDA deck on the re-org, archived at Advamed, here.

Stenzel gives a 12 minute presentation, in his prior role at Invivoscribe, at the Personalized Medicine World Conference in January 2018, here (minutes 1-13).

In other FDA diagnostics news, the FDA recently provided the Hill with what is being described as nearly an FDA plan for legislative reform of diagnostics at FDA; for more see here.

Steve Gutman was director 1993-2009; Alberto Gutierrez 2009-2018.  Stenzel is only the 3rd director in the division's 25-year history.

Brief Blog: FDA Provides Deep Technical Assistance on Lab Reform Bill

Update:  Attorney Jeff Gibbs of Hyman Phelps has posted an article at FDA Law Blog where he both discusses the FDA documents in more detail, and posts a link to them.   Blog here.  FDA two-pager here, FDA 59 page legislative document here.


Original August 9 Blog:

While FDA lab test reform has been kicking around Washington for several years, a new landmark has happened.

FDA has provided detailed technical advice on the Hill legislative draft, according to   Advamed applauds the FDA's effort. 

See the trade journal article here, email registration may be required.   The FDA's information could support another round of hearings on the Hill, one step in the advance of any piece of legislation.  See also Genomeweb coverage, August 8, here.

The top line message:
Washington, D.C. – AdvaMedDx applauds Capitol Hill's release of technical assistance (TA) developed by the Food and Drug Administration (FDA) to draft legislation authored by Representatives Larry Bucshon (R-IN) and Diana DeGette (D-CO) as a significant, positive step toward enacting legislation modernizing regulation of all diagnostics, including Laboratory Developed Tests (LDTs). 
My understanding is that FDA provided higher level (or shorter) info to Congress in May 2018, as reported by Genomeweb (here).   This would be a longer, deeper-dive form of FDA feedback now.

On August 8, Advamed urged Congress to keep the legislative ball moving forward on diagnostics reform, here.  While in late June, Genomeweb reported that a lot of other stakeholders did not want that ball to move at all, here.

Genomeweb adds:
On Aug. 3, the FDA provided Bucshon and DeGette more detailed recommendations for how they might address regulation of so-called in vitro clinical tests via legislation. The FDA's version includes provisions related to premarket approval, provisional approval, and a precertification program, and makes explicit its authority to revoke approval, request raw data, and take corrective action against test developers in order to protect the public health. 
The FDA's response to the Hill was 59 pages, 23,000 words of legislative-format text; whereas the 2017 draft bill circulated by the Hill for comment was 215 pages and 43,000 words. 

The JAMA/Flatiron Study of Cancer Gene Panels: Why It Couldn't Have Worked

On August 7, 2018, JAMA published a large retrospective observational study of the relative impact of large gene panel testing in stage III/IV lung cancer in a community population (Presley et al.) along with a detailed Op Ed by Bunn et al.   See also coverage and interviews on August 8 at Genomeweb (here).

From a Flatiron Heath database of some 5700 patients in 191 practices, the authors identified about 875 received panel testing (>30 genes) and 4800 received "routine" testing such as EGFR gene and ALK gene alone.  In propensity-matched analysis, there was no increase in 12-month survival in the gene panel group: survival was about 43% at one year in either group.

The study authors, and the Op Ed authors, note various caveats and limitations.  Stil, the study authors conclude with concerns there is limited validation here for the wide use of costly gene panel testing in lung cancer patients.    The Op Ed authors note that the number of testable genes and paired drugs is rapidly increasing, even since an area that spanned 2011-2016. so that results of panel testing in one several-year-period may not apply to the next period.

What's Wrong

The biggest issue for me is that an RCT which is pivoted on the diagnostic test can be a hopeless trial design in some situations, and this is probably one of them.

Surely if you take 200 advanced lung cancer patients, and pivot the design to test only for ALK in one half of them, it's unlikely to show a population wide survival benefit, since the ALK fusion will appear in only a few percent of patients in the second arm, and even then, a good drug may work only half or 2/3 the time. 

Case Study with a Diagnostic for Herceptin

It's like playing a movie backwards: this is exactly why the classical pivotal trial for Herceptin was run in Her2-positive women and not in all women

Let's pretend for the sake of real simple math that 30% of women are Her-2 positive, and that in advanced breast cancer it doubles your survival from one year to two years half the time, with half the patients being responders. 
So in a control arm of 100 patients (no Her2 testing), all will get chemo and all survive one year.    
In the Her2 test arm, 100 patients get Her 2 testing.   30 are positive, and 15 respond to drug and live 2 years; the other 85 in Arm Two live one year.    
Result:  In the Her2 test arm, the average survival of the 100 patients getting Her2 testing is 1.15 years, very unlikely to be different than 1 year, when you add in all the diverse noise of surival data in cancer patients.   Yet, you also already KNOW that if you treat the Her2 positive women with Herceptin, the responders will have double survival (2 years) and half of them are responders.
OK.  In the JAMA report this week, we've just run the vision of precision medicine backwards by pivoting the study on the diagnostic test.   You know some patients will do better in the gene panel test population, but they will be washed out in most situations in a randomized control trial pivoted on the precision medicine diagnostic test in the whole population.   This is the whole rationale for setting up precision medicine trials on the positive and negative populations, not the whole population, in the first place.

N.B.:  Authors Found Amazing Lack of Prescription Follow-Through

Another key result of the real world database study was that only about half of patients with a pivotal mutation (like EGFR or ALK) got the corresponding targeted therapy, in data running almost up to the present, to 2016. 

That's an issue that should be getting red-light attention and plans for an intervention.


Interesting citation.   From just a few weeks ago, June 29, the Op Ed authors cite Sharma et al in J Precis Oncol (here).  This is: Eye-Tracking Study to Enhance Usability of Molecular Diagnostics Reports in Cancer Precision Medicine.  It's a cognitive psychology study that concludes:  "Focused usability studies can help drive our understanding of the clinical workflow for use of molecular diagnostic tests in cancer care. This in turn can have major effects on quality of care, outcomes, costs, and patient satisfaction. This study demonstrates the use of specific usability techniques (eye tracking and think-aloud protocols) to help clinical laboratories improve MDX report design in a precision oncology treatment setting."


See a March 2018 study by Flatiron on real-world use of immunotherapy in lung cancer (pembrolizumab); Khozin et al., here.


See an August 2018 study by Marquart, Chen, Prasad, estimating that "7% of patients can benefit from genome driven oncology."  While this is arguably a low number, it also makes the point if you randomize cancer patients into two arms, treating one arm with "genome driven oncology," you won't see a population-average benefit.  Jama Oncol 4:1093.

Note in the figure the tiny % at the top of each paired left bar is exploded into the paired right bar.

Tuesday, August 7, 2018

New Rules, Medicare Advantage, Drug Step Therapy: What Really Happened?

On August 7, 2018, there was a rapid flurry of news articles which followed a CMS press release that it was loosening burdensome regulations on Medicare Advantage plans and allowing them to use Step Therapy.   CMS framed this as an important advance for controlling drug costs in the Medicare program, and that this rollback of excess regulation was consistent with ongoing HHS themes.
  • See news at PatientEngagementHIT here, at Endpoints here, at CNBC here, at Healthcare Finance News here, at Forbes here.   ASCO press release here and article here; Oncology Practice here.  Commmunity Oncology Alliance (COA) called the policy "a nightmare," here.  Specialty Pharma Times here; MedPageToday here.  For a September 2018 update at MedCityNews, here.  

  • More broadly, see articles on the Trump agenda to reduce drug prices (Forbes here, Politico here, 44-page HHS blueprint, here.)   For a 2018 law journal article on step therapy, here.

  • For the CMS August 7, 2018, press release, here.  For the actual memo, here.
What Really Happened?

For years, CMS has had policy that Medicare Advantage plans must provide the same benefits as Part B (or Part A) Medicare. 

For example, let's say that a Part B MAC has a policy to pay for any of drugs A, B, C, D.   A Medicare Advantage plan can't say they only pay for Drug A, or only pay for Drug B and C if drug A fails, and never Drug D.   This wouldn't be "the same coverage for the patient as Part B." 

The 2012 Memo.  A 2012 CMS memo made clarified this.   Exclusion of Medicare Advantag step-therapy was laid out by HHS attorney Danielle Moon in a two-page memo to plans on the simple basis that it conflicted with the concept of matching Part B coverage under LCDs.  (She appears to be at Deloitte now.)   Find this 2012 document and the new 2018 document together in a cloud zip file here.

The 2018 Memo.  The new document is a 4 page memo signed by Administrator Verma (zip file here).  It "rescinds" the 2012 memo.   It states that Medicare Advantage plans can use prior authorization methods, and that step therapy is only a form of prior authorization.  (I guess it is prior authorization where the question is, "Did you try and fail Drug A first?")   Net net, the press release is pretty broad and bold, while the underlying 4 page administrative memo is pretty nerdy, and couched in cautionary language about beneficiary access protections.

Potential Link to Diagnostics

Within a few days, ASCO had already met with HHS Secretary Azar about the stepped therapy policy.   Regarding oncology, there is a potential tie-in to diagnostics.  We frequently hear that some large percentage of cancer patients don't get the correct precision medicine diagnostics, OR, that they get the drugs surprisingly often without the diagnostics.   If plans institute tight policy review for stepped therapy, it would almost certainly include requirements that on-label CDx are obtained before the drugs are covered.  (This could be done in M.A. even if not done in any corresponding MAC LCD.)

Bonus Trick Question

Why are the 2012 memo and 2018 revision concerned only with step therapy in Part B drugs under Medicare Advantage plans?  Because if the drugs were Part D oral drugs, there wouldn't be any fee for service LCD (neither Part A or B) that the Medicare Advantage plan would have to provide the-same-coverage-as. 

Implications of Step Therapy for Part B Drugs

The biggest bang-for-buck is usually substituting generic for branded drugs.   Another example might be putting Avastin for macular degeneration as Step 1 therapy and other drugs (Lucentis, Eyelea) as Step 2 drugs if Avastin fails.   Another would be the creation of step therapy in response to pharma discount offerings.  (Our drug is $2000 and their drug is $2000.  We'll give you our drug for $1500, if you make it Step 1 and the other guy Step 2.)

August 7, 2018 Memo Has Apparent Error

Based on the memo still online on August 16, dated August 7, here, there is apparently an error in page 3.  It says any value rewards to encouragement participation should be MORE THAN HALF the value saved by the process or service.   I believe this should be LESS THAN HALF.  Nerdy discussion here.

AMA Letter on HHS Drug Policy; Manatt Article on Innovation

Researching this, I ran across a new July 16, 2018, twenty-page letter from the AMA to HHS on drug policy.  Here.    I also ran across a nice paper by Annemarie Wouters of Manatt, on the topic of US health insurance and innovation, which I hadn't seen before - here.  Both are in my airplane reading folder for today.

Monday, August 6, 2018

Very Brief Blog: AMA Posts Quarterly New PLA Code Agenda for August 2018

AMA CPT runs a quarterly process for creation of new Proprietary Laboratory Analysis codes or PLA codes.

Like other AMA CPT meetings, the meeting is publicly accessible.  However, this meeting is held by webinar only.   Sign up by August 6 for the August 9 meeting at 6 pm Central time.

Webpage including sign-up links, here.  Upcoming agenda as a PDF here.  I count 14 codes on the agenda.