Sunday, January 31, 2021

Very Brief Blog: CMS Updates Webpage for MAC COVID Test Pricing

CMS has periodically published MAC prices for the rapidly appearing range of COVID lab test codes.  This will be equally important in 2021, because CMS bumped a number of the codes into the "gapfill" process rather than directly assigning national prices.

Good news for CMS watchers - CMS updated its webpage for MAC COVID prices on January 25, 2021. 

  • Find the current CMS price list here.
  • I've put a duplicate copy in the cloud here.

I've clipped the table below as well.  The MAC prices are uniform so you really only need the first 3 columns.

click to enlarge

Among the more common tests, the standard AMA CPT PCR test (not high throughput) is 87635 $51.  The antigen test 87426 is $35.   The single step antibody test is 86328 $45, the multi step (e.g. Elisa) is 86769 $42.  The "gold standard" neutralizing antibody tests are screening, 86408 $42, and titer, 86409 $80.  CMS bumps up to $142 for combination tests, e.g. COVID + FLU.  

CMS has fixed prices for U-series codes for high throughput PCR testing, $75, and CMS adds $25 via an add-on code if reported in two days. (Trade article here).  (See also, interview with ACLA, here.)

For an August 2020 blog on COVID test coding, Lennerz, Link In, here.


Very Brief Blog: COVID and "Number Needed to Vaccinate" NNV, per Death Avoided

In healthcare, we often talk about "number needed to treat," or NNT, per outcome obtained or event avoided.   (In diagnostics, the equivalent metric is "number needed to test," also NNT.

While I am sure experts vary in their calculations, see a tweet from former biopharma executive Dr. Thomas Wilckens (here), pointing to a new article by Prof. Hermann Brenner of Heidelberg on  number needed to vaccinate per death avoided in COVID - article here.  

He argues that NNV in COVID is as low as 8 in the institutionalized elderly, to 167, in relatively healthy 65-74 year olds, to 12,873 in the low risk population < 65.    He also calculates that 99% of deaths avoided are reached with 33% of population vaccinated (being older or higher risk).  

The paper is open access.

Friday, January 29, 2021

Very Brief Blog: Novitas MAC Posts New Half-Price Values for some Irhythm Codes; Shares drop $250 to $140 in an Hour

Top Line:

A MAC posted half-size 2021 prices for the new CPT codes for 7-15 day cardiac monitoring (e.g. iRhythm), and the company's share price fell from $250 to $140 in an hour.

Update - trade press at Healthcare Dive here.

Update - March 2021 trade press at MedTechDive here.


In mid-December, I had a multi-part blog about CMS changes and policy vacillations around digital health codes - here.

A large company in the field, with a market cap circa $7B, is iRhythm.  For many years, its service was coded by Category III codes that were locally priced by MACs.  

While its main office is in San Francisco, public CMS data shows it mostly billed via non-Noridian locations.   The average national price for the service in 2019 data was in the $300 range (see the prior link for tables).

The Novitas MAC has newly posted webpages for pricing of the new CPT codes.  

Basically, AMA CPT made sets of codes for the full service and its components, and made a duplicate set of codes, one for a 2-7 day service and one for a 8-15 day service.   As I noted in my December blog, CMS declined to provide pricing for the analysis service and for the full service (since the full service embeds the analysis service).   CMS did price the physician interpretation, for example, so that doesn't show up in the table of new local Novitas prices.

See Novitas here:

Basically, I would summarize the results like this in round numbers:

Old 2020 Codes and Observed Average National Pricing from Part B 2019 Data

  0295T Comprehensive $264

  0296T  Fitting patient $24

  0297T  Irhythm E-Service, Dx, $311

  0298T  MD interpretation, $27

Novitas Posted Prices from Link

  93241  ECG monitoring, 2d-7d, full service   $97

  93243  scanning analysis and Dx report   $51

  93245  ECG monitoring, 8-15d, full service   $97

  93247   Scanning analysis and Dx report  $51

For me, the number to watch is the drop from old locally priced code 0297T (diagnostic scanning) $311 to new locally priced code 93247 (7-15 day diagnostic scanning) $51.  

Share price fell from around $250 to around $140, or a drop in market cap from circa $7B to circa $4B.

Thereby Hangs A Tail

The health policy consultancy MCDA published a public article on December 30, 2020, about pricing for these services.  

See LINK for (1) a blog, (2) a new (12/30) report, and (3) finally a copy of the letter MCDA submitted to CMS back in the fall during the public comment period for pricing the new CPT codes in RVUs.

Notes - 

See some additional backstory here, here.

At the same time that CMS is back and forth on digital health reimbursement, GAO and National Academy of Medicine released a major report on AI in healthcare in January 2021, here.  

Similarly, FDA set up an Office of Digital Health and issued a white paper on rolling approvals of AI products (but see also topic #3 here).

CMS set up an office for new technologies pricing last fall, under Jason Bennet, here.

Advamed has a 50 page white paper, 2020, on CMS reimbursement of digital health, focused more on virtual digital health, here.

Thursday, January 28, 2021

Very Brief Blog: CMS Posts Gapfill and New Code Transmittals; Do MACs Gapfill All PLA Codes or Only Locally Relevant Ones?

Every year, CMS prices new AMA CPT lab codes either by the crosswalk process or the gapfill process, based on summer meetings and fall comment periods which prepare for each new January 1 calendar year.

There was a period in the "old days" - let's say, 2013, 2014, 2015 - when MACs were offered a list of gapfill codes to be priced in the first quarter of the new calendar year, and MACs priced them if they wanted to.  Some MACs priced few of them, for example, if there was no utilization.

Beginning several years ago - I'm guessing, maybe 2016 or 2017 - CMS began requiring that MACs price ALL codes in the gapfill process.  This has gotten increasingly complex as 30, 40, or more codes enter the first quarter gapfill process.

This year, CMS has released transmittals with new codes, gapfill notifications, etc.  Worth knowing about - January 20, 2021, MM12080 here, and CR12080 T10575, here.

At several points, this transmittal states that "MACs shall only price PLA codes for laboratories within their jurisdiction."

I couldn't tell for sure if this statement applies to each rolling batch of new quarterly PLA codes, or if this ALSO is meant to apply even to the annual list of required nationwide MAC Gapfill pricing decisions for the new year.   
For example, CMS might say, "Here are six new PLA codes for this quarter, only price them if they are used in your MAC," but in contrast say, "Here are 42 new codes to be gapfilled nationwide for CY2021, please price all of them."   

>> (Update).  A policy expert at CMS said this interpretation was correct - incidental PLA codes on a rolling basis don't have to be priced by MACs, but the annual national gapfill list is supposed to be filled out completely by all MACs. 

(Still, at least one real-world MAC was confused by the instructions.)

Additional rules are in the transmittal, such as changes in COVID PCR test pricing for CY2021 and implementation of an add-on payment for rapid testing.


Nerdy Details

There have been several nerdy changes to PAMA law, with the result that claims data from 1H2019 will be reported to CMS in January 2022, for a three year pricing period 2023, 2024, 2025.  Since the next new 3-year fee schedule will be CY2026, I believe the next data collection will be 1H2024, reported to CMS in 2025.   There are still some price reductions underway in a staged fashion from the 2018-2019-2020 fee schedule.  There are 0% changes 2020>2021, but there may be a 15% per year reduction 2022, 2023, 2024.   (Relatively few tests are still getting reductions, but some are.  Also, there were a few quirky PAMA results such as a rare $75 test with a new $1 price, so its phased reductions would go on for a long time.)

Due to some quirk in lab law, on January 1, 2021, there was a 0.2% update to the Clin Lab Fee Schedule which applies only to Pap Smear tests, and resets their price floor from $15.12 to $15.15, three cents.

CMS lists new codes coming into use from October 6 forward, in this transmittal, as well as the list of all new codes for 1/1/2022.   For 80,000-series codes (e.g. 87637) CMS states the codes are contractor priced where applicable "until they are nationally priced."   For PLA codes appearing on a rolling basis, CMS remarks they need only be priced by the MAC having that jurisdiction.   

In long tables at the back of CR12080, CMS lists new codes for 2021 as either crosswalked or "gapfilled" up to 0220U.   Higher codes appeared after the June 2020 "crosswalk/gapfill" meeting, and are described in a following table as "contractor priced" (not "gapfilled") until pricing is assigned at the June 2021 lab policy meeting.

Very Brief Blog: Modern Healthcare Lists Medicare Regulations in Limbo

In a recent Brief Blog, I provided some links and background about how the Biden administration can hold, or even nix, late-breaking regulations from the Trump administration.  Here.

In an open-access article, Modern Healthcare provides a listing of nearly a dozen recent regulations and their status.   Here.

Another handy link, track all CMS regulations, proposals, comment periods, at the Federal Register website for CMS - here.

Tuesday, January 26, 2021

Very Brief Blog: Talis Biomedical Files for IPO; 2nd Molecular Microbiology Startup in a Week

Last week, I had a Brief Blog flagging that LUCIRA had filed for a $115M IPO based in part on its EUA for an all-in-one 30-minute COVID molecular test - here.  (I included a link to the 285-page S-1 SEC document).

A few days later, here is another one.  TALIS Biomedical has also filed for an IPO [TBD insert valuation here].   

  • See subscription coverage at SF Business Journal here.
  • See open access coverage at Genomeweb here.
  • See their 275-page S-1 SEC IPO document here.

Per Genomeweb, the firm is among a group of six diagnostics companies together awarded $250M in 2020 related to the COVID pandemic. 

Talis Biomedical Platform and Cartridge for COVID

Monday, January 25, 2021

Trump-Era HHS Decisions Hit Three, Not One, FDA/CMS Positions. (1) LDTs, (2) CED, (3) Digital Health.

Executive Summary:  There's wide awareness of an August 2020 HHS ruling that FDA can't regulate LDTs.  But in the past couple weeks, add two more Trump-era HHS rulings to the list.  

One affects CMS use of "Coverage with Evidence Development (CED; see heading #2), one affects CMS rules that depend on "clearance or approval" of devices before Medicare policies kick in (see heading #3).



Everyone who follows policy at the FDA, and/or in diagnostics, recalls the week in August 2020 when HHS released a short paragraph on its website, announcing that FDA could not enforce controls on lab-developed tests, whether of the COVID type or other LDTs.   (Here).   

The decision in August 2020 built on a lengthy memo by General Counsel of HHS in June 2020, which basically accepted years of arguments from industry that FDA could not regulate LDTs, at least not without formal notice and comment regulations.  (Zip file here).  The June 22 memo, which includes a full exposition of FDA law for diagnostics, came from Robert Charrow, General Counsel (GC) of HHS under President Trump.

But Wait, There's More.

#2. HHS Nixes "CED"

See also HHS Advisory Opinion 21-03 that appears to "cancel" Coverage with Evidence Development, used in the National Coverage Decision process for years and (previously) enshrined in CMS policy documents and even discussed in Federal Register policymaking.  

The January 14, 2021 opinion is online at HHS here and I've put a cloud copy here.

Basically, Medicare law blogs Medicare from covering things that are less than "reasonable and necessary," and services under an NCD CED clinical trial are less than reasonable and necessary, hence, under CED.   CMS has stated its authority is a clause of statue allowing CMS to pay for services in support of AHRQ studies.   Therefore, every CED opinion (web page here) makes a nod to supporting AHRQ studies.   As signed by Robert Charrow, he acknowledges that while the statute does not define "AHRQ supported studies" the links between AHRQ and CED NCDs have been too thin to support a reasonable interpretation of "Supported by AHRQ."  

Do CMS Staff Tell Charrow, "Thanks for your input."?  

Note that in a decision posted January 19, after Charrow departed but before the Biden inaugural (head-spinning), CMS issued a new decision (on mitral valves) that includes CED, and this occurred despite the January 14 HHS memo.   I'm sure, thereby hangs a tale.   

CMS has a webpage for CED projects here.  Whatever the success or fizzle of CED in the past, potentially the future would be brighter with new capabilities in pragmatic trials, machine learning, real world big data, and so on.

#3.  FDA Posts Guidance on Digital Health & AI, 
Even While HHS Proposes to Nix FDA Review

Update March 24

See an update on January 22 that the rule was, in part, halted; Hogan Lovells tells the story at Lexology here.  This looks like it links through to a general announcement that unfinalized rules would be finalized at the discretion of the new administration, which is not surprising - here.  That announcement suggests adding a further 60 day delay when necessary to account for the new onboarding of new staff, which original timelines might not have allowed for.   "With respect to rules that have been published in the Federal Register, or rules that have been issued in any manner, but have not taken effect, consider postponing the rules’ effective dates for 60 days..."

On March 24, RAPS published an article reviewing the 50-some public comments, which closed about March 15.   It's at this link but not working for me currently; I saw it earlier today.

Comments page at here:

For this topic, which got submerged in the Capitol protests and election news, I'll defer to an excellent article at MedCityNews by Elise Reuter (here).  {And similarly the excellent Hogan Lovells article here.}

Basically, in the last year, FDA has created a new Digital Health Center of Excellence - here.  And FDA has just released a major guidance and goal document on regulating digital health and AI - here, dated January 2021.

But on January 15, HHS published in the Federal Register (86 FR 4088) a lengthy list of device categories, including many in digital health, that HHS proposed to withdraw from FDA regulation (e.g. move to Class I).   

See Federal Register here, comment open 60 days until circa March 14.

The main argument that HHS uses - and the rule is signed by the head of HHS, Alex Azar, not the head of FDA - is that the device categories in question (like AI-assisted radiology) have not had injury and flaw complaints in the FDA's MAUDE database of device malfunctions.  Dozens of categories are proposed for de-listing from FDA review.

OK.  I'm all in favor of deregulation, but a few thoughts.

  1. Were reviews really pointless?  The assertion is that the current reviews are regulating nothing, since there are no complaints.  Isn't this a little like saying this intersection, with a stoplight, hasn't had any accidents in 3 years, so we can remove the stoplight?
  2. Authorization regulates claims.  Regulated devices, both 510(k) and PMA, have restrictions on advertising and labeling claims.  Class I devices don't; nobody worries about the labeling claims of a tongue depressor.
  3. FDA-CMS Interactions.  CMS has been proposing rules that are predicated on FDA clearance or approval, like special coverage for breakthrough devices (acronym MCIT) or special pricing rules for Advanced Diagnostic Laboratory Tests that are "FDA cleared or approved."   
Pulling categories from review could effect these and other tangential policies.

Articles on Public Comments to the HHS FDA deregulation proposal


See a November 2020 GAO report (106pp) on the growing value of AI in healthcare - report here, JAMA note here.  The lengthy document has two separate parts, Part One jointly produced by GAO and National Academy of Medicine, Part Two (pp 38ff) produced by National Academy of Medicine.


See a pathology & AI alliance and their public website developing response to the FDA proposal here.  They refer to the FDA proposal as "86 FR 4088," appropriately enough.  

Very Brief Blog: Liz Richter Named Interim Head of CMS

After the Biden inaugural, it was news pretty much everywhere that long time FDA drug expert Janet Woodcock would be acting administrator of the FDA (e.g. here.)

Less visibility that they also named an acting administrator for CMS, as Seema Verma departed.  The acting administrator is Liz Richter, who has been deputy director for the Center for Medicare over a decade, since 2007.  She has served at CMS since 1990 in roles of progressive seniority.  

See an open access article at Healthcare Finance News here.  In the short term, there might be decisions as to whether to keep or deep-six some last-minute Trump era rules, before a permanent Biden administrator can be named.

I recall interviewing with Ms. Richter and the Chief Medical officer for the position of Head of the CMS Coverage Group around 2010.

Thursday, January 21, 2021

Very Brief Blog: Nullifying Recent CMS Policies, Congressional Review Act

One of the questions in many minds is which recent Trump administration health policies might be rapidly reversed, frozen, or nullified by the Biden administration.

My understanding of the laws here isn't complete, but I think (A) the administration can hold up things not yet published in the Federal Register, while (B) Congress has authority under the Congressional Review Act to hold things up with a 60-day lookback window.   See an excellent article on the Congressional Review  Act by Beckmann et al. at Faegre Drinker here, and what looks like an open access article at Bloomberg Law here.

Update Feb 5:  The original blog didn't have a link to the KLAIN MEMORANDUM, January 20, which provides rules for withdrawing notices not yet published in Federal Register, rules for opening a new comment period (which might lead to withdrawal), etc.  In addition, no rules which were in progress before Jan 20 can be published in Fed Reg without review by a new appointee coming in after January 20.  HERE.  

  • For example, in December, the Trump administration  finalized a remarkable rule that exploited its authority to do demo programs (under the Innovation Center, CMMI, aka "Section 1115A") to drastically change Part B drug pricing.  It's usually abbreviated as the MFN, or Most Favored Nation, rule, and pegs US Part B drug prices to European ones.
    • That's already been stayed by the courts due to some process irregularities, and biopharma would surely like the Biden administration to trash it.  On the other hand, it's a "costly drug price lowering measure," which may slow down the decision-making process.   
    • (For nerds, there's a long backstory here).  
    • (See MEDPAC's comment here.)
    • (See an excellent white paper from McDermott, here.)

    • Just days ago, the Trump administration finalized a rule that regulates the way prior authorizations are done (requiring online portals, uniformity, time limits. 
      • It doesn't really regulate the content and frequency of prior authorization).  
      • Payers have complained the P.A. rule was slapdash and slapped together in days; delays and fixes could be coming.

    For the  device community, one of the most important rules was the MCIT - the Medicare Coverage of Innovative Technology, which was released just over a week ago, and hasn't been published in the Federal Register yet. This would guarantee 4 years of Medicare coverage for FDA-authorized "breakthrough devices."  My instinct was that the MCIT was  not high enough to be on the White House radar, but we should probably assume that no absolutely-sure bets are possible (there were a few anti-MCIT voices, here.)   It was fully and finally published in Fed Reg on Jan 14 under Trump (here). So it's not one of the rules in limbo that was released by DJT in typescript form but not published in Fed Reg by January 19.

    Wednesday, January 20, 2021

    Very Brief Blog: LUCIRA Files for $115M IPO; has EUA for Home-Test Version for PCR COVID

     Update; Press on Feb 4 suggests the IPO is $150M.  Here.


    The COVID pandemic has seen enormous new investments in R&D, including for point of care tests.  For example, I saw an advertisement for the NIH RADx-funded PCR device from VISBY a few weeks ago (here).

    Here's a new one, where we have both some news reports and a full-length IPO document for LUCIRA, intended as a home-use POCT that uses LAMP amplification for very rapid COVID results.

    Genomeweb - here - writes,

    In November, the company received Emergency Use Authorization from the US Food and Drug Administration for the Lucira COVID-19 All-in-One Test Kit, a rapid, at-home, real-time loop-mediated isothermal amplification (LAMP) SARS-CoV-2 test available by prescription that runs on a handheld batter-powered device. An over-the-counter version of the test is expected to be submitted to the FDA later this year. 

    See an IPO press release here.  But of particular interest and detail, see the 287-page IPO filing here.



    On the same theme of POCT COVID: see a (subscription) deep dive article at Genomeweb by Kelsy Ketchum on January 21, on the startup STARTUP DETECT, formerly HOMODEUS.  Here.


    Update: A few days after LUCIRA, the molecular microbiology firm TALIS also filed for an IPO - here.

    Tuesday, January 19, 2021

    CMS Releases Final NCD For Liquid Biopsy Screening in Colorectal Cancer

    On January 19, 2021, CMS released a much-anticipated NCD which prospectively covers future tests for colorectal cancer screening when they have FDA approval and meet several pre-specified CMS criteria.  Find the full NCD here.

    The rules are slightly abbreviated here for easy reading:

    • Blood-based liquid biopsy CRC tests are covered once every 3 years
    • Patients must be:
      • 50-85 years old
      • Asymptomatic
      • At average risk (no history of polyps, colorectal cancer, family history of colorectal cancer, etc)
    • The test must be:
      • FDA authorized for CRC screening;
      • Sensitivity equal or greater than 74% and specificity equal or greater than 90% vis-a-vis colonoscopy, based on FDA pivotal studies.
    No current LBx test meets the criteria. For exact text see NCD link and see also the NCD discussion.

    See open access coverage at Healthcare Dive here.  At 360Dx here.

    The criteria mean that if you have cancer, which could be picked up on colonoscopy, the test will pick up 7 cases out of 10.   The 90% specificity basically equates to a 10% false positive rate (1 in 10 patients who will go to colonoscopy after the blood test, but will not have cancer). 

    CMS discussed variable 2-3 year intervals but uses 3; CMS will monitor future tests when they actually are approved and modify if needed.  CMS considered beginning at age 45 but will hold to age 50 for now.  

    CMS removed a proposal that the tests would need BOTH FDA approval AND guideline inclusion.  The word guideline appears 77 times in the NCD.

    While FDA could approve tests that do not meet the criteria, the criteria are at least close or "ballpark" to what FDA would likely require.  For example, FDA would not approve an LBx test that was 50% sensitive and 50% specific in the first place.  

    There was debate that CMS should consider, or favor, tests with better performance to detect precancerous adenomas.  In fact, the word "adenoma" appears 177 times in the NCD.  However, CMS rates tests as passing or failing based onlly the performance in so far as it detects colorectal cancer itself.


    In December, legislation was introduced in the House (H.R. 8845) that would allow CMS to cover future FDA-approved multi-cancer screening tests, which would include both blood-based tests and other (e.g. urine) based tests.  The NCD here is for blood-based liquid biopsy only.  See also S.5051.


    Monday, January 18, 2021

    Very Brief Blog: HHS Secretary Alex Azar's Resignation Letter

    In a previous blog, I linked to (1) CMS Administrator Seema Verma's 3-page resignation letter, as well as (2) a lengthy (5000-word) blog essay she posted at CMS.

    HHS Secretary Alex Azar posted his two-age resignation online as well, via Twitter here.   A PDF of the letter is in the cloud here.

    Like Verma, Azar thanks Trump for the opportunity to serve.   However, on page 2 he inserts a pointed paragraph that "actions and rhetoric following the election" (not [following January 6] ) threaten to tarnish the historic legacies of the administration.   

    For a review of CMS accomplishments under this administration, by Joshua Cohen at Forbes, here.  Includes Medicare Coverage for Innovative Technologies (MCIT).  

    Very Brief Blog: Open-Access Article on Risk Predictors for COVID Mortality (It's your AGE)

    In the journal Critical Care Explorations, Kattan et al. (Cleveland Clinic) publish a detailed model for risk factors for severe morbidity and death from COVID.  

    Find it here.  The authors argue that better risk projections will better allow resource allocations - e.g. vaccines.

    The paper builds data for a fairly complex nomogram (Figure 2).  Interestingly, risk by age rises steadily from age 20 to 55, at which point you have about 75% of the maximum age risk points.   They show readily modest additional risk from 65 to 70, from 70 to 75, from 75 to 80.  

    Another observation is that the risk points in aging from age 20 to 40 is about the same as the risk in going from a normal BMI to an extreme BMI of 50.

    See original PDF for details and an explanation of the key chart:

    The data was developed on 4500 patients (early 2020) and further validated on ad additional 3150 patients (mid 2020).   Changes in treatment in future quarters could shift the accuracy somewhat.

    Very Brief Blog: Govt Releases 84-page COVID Testing Report

    On the edge of the next administration's inaugural, an 84-page federal report on the Federal COVID testing undertaken over this past year.

    • See an open access article at 360Dx here.
    • See the home page for the report here.
    • See the actual 84 page PDF report here.

    360Dx summarizes that the report covers February through August, and testing directly performed for the federal government - e.g. for Department of Defense, VA, and so on.   This covers 11M tests or 13% of the US tests for the interval.  It includes testing that was directly federally-funded for Medicare Part B beneficiaries. 

    Friday, January 15, 2021

    Very Brief Blog: In Midst of Pandemic, Novitas MAC Tightens Rules for Respiratory Illness Testing

    MolDx and Viral Panel Codes

    On Monday, January 11, 2022, the MolDx MAC system held a contractor advisory meeting in which a half-dozen experts discussed uses of microbiology panel testing (respiratory, GI, meningitis, etc).  The discussion was somewhat extended and I don't have short bullet-point takeaways from it.   Panelists emphasized that different syndromes were different, different panels and settings were different, patients were individualized, etc.   At some point Noridian will post a transcript of the session. The MolDx system may be considering revising its policy (policies) for panel testing, which currently focus coverage on 5-pathogen-and-less panels.

    Novitas Launches Proposed LCD for Viral Panel Codes

    The Novitas MAC has released a new policy on respiratory pathogen molecular testing. with a public meeting to be held on January 29, and a comment period open until February 27.

    See the Novitas LCD here (DL38916) and the billing article here (DA58575).  

    LCD DL38916 Is Very Concise

    The coverage section is very concise.  

    • Respiratory panels of 5 and less are covered (1) when timely results can be delivered in an outpatient setting, and (2) clinical management can result in an improved health outcome.

    This coverage section has the pro's and con's of 21st Century Cures reforms for LCD structure and process.  The LCD coverage section is supposed state what is covered, why, and when, and not need updating very often.   An attached billing article gives details such as covered CPT code numbers.

    In this case, the coverage section is fairly ridiculous, not defining "timely result" and leaving to the reader to figure out when "clinical management results in an improved outcome" to allow even the 3-5 panel tests.

    The LCD goes on when an extensive literature review and discussion, including a summary of guidelines.

    Novitas held a contractor advisory committee public meeting on respiratory panels in June, 2019, which leaves an audio file and transcript - home page here.  In the LCD, they record CAC members were polled and responded the panels are accurate and may improve outcomes.  The advisory meeting was held long before the COVID pandemic.

    Billing Article DA58575

    Note that the coding section has covered codes - group 1 - and non covered codes - group 2.   Covered codes including 86731, respiratory pathogens, N=3-5.  2022 codes will be added, including 87428, 87636, 87637, 0240U, 0241U.

    The billing article lists a series of non-covered codes, including the standard codes for respiratory pathogens, 6-11 and 12-25 targets (87632, 87633) and a list of 7 non-covered PLA codes for large panels (larger than 5 targets, often around 20). 

    The article adds no more to the LCD's superficial rules that results must be timely and can improve patient care.

    Zip File

    I've put the LCD, article, and 2019 transcript in one cloud zip file here.

    You Tell Me: Trends in 87633

    87631, '32, and '33 are a triplet of codes for respiratory virus panels, 3-5, 6-11, and 12-25 pathogens.

    Interestingly, these codes drop in Medicare utilization from 2018 to 2019.

    • In 2017, national utilization of 87633 was $28M.  
    • In 2018, national utilization of 87633 was $42M.   
      • Remarkably, a great preponderance was in California, with $26M.
    • In 2019, national utilization of 87633 was only $31M.   
      • The delta might be accounted for by the drop of utilization in California, which fell from $26M in 2018 (part of $42M) to only $15M in 2019 (part of $31M).
      • Almost all the utilization in 87633 in 2019 was in So Cal ($15M).   

    The national drop from 2018 ($42M) to 2019 ($31M) was probably due to introduction of a MolDx/Noridian LCD, L36315, in mid-2019, which blocks payment to California labs for 87633.

    Who Were the Leading Providers of 87633?  Mostly So Cal

    Going back to CY2018, when there was $41M of spending on 87633 and $25M in California, the top providers (each with over $1M allowed) were mostly in Southern California.

    The top 11 providers (out of 230 providers) billing for 87633, provided $21M of 87633, or about half the national volume.

    click to enlarge - CY2018 providers of 87633 (national) - most in SoCal

    Very Brief Blog: CMS Leader Seema Verma Checks Out, Notes Many Agency Accomplishment, Minimizes Reference to "Trump"

    On January 15, 2021, CMS Administrator Seema Verma left a long essay on the CMS website, describing the numerous accomplishments and achievements of the agency under her tenure of the past four years.

    Notably, Verma makes NO mention of President Trump's name.  The essay is about 5000 words.

    Separately, Verma submitted her resignation letter to President Trump, dated January 14.  The three-page letter was also posted on her Twitter account - here:

    While the resignation letter necessarily is addressed to President Trump, and thanks him for the chance to lead CMS, I don't believe she mentions his name again. 

    I've put both the 13p essay and the 3p resignation letter as PDFs in one cloud zip file here.


    Yesterday's Blog Predicts This

    I had noted yesterday the abrupt disappearance of endless references to President Trump's leadership and President Trumps vision in CMS press releases and headlines (here).  

    A New CMS Press Release Today Also Omits Trump's Name

    Today's Verma resignation letter and public essay by Verma downplay Trump's name.  Similarly, a new press release today (on a prior authorization final policy) omits Trump's name entirely, although the original draft policy had been released "under President Trump's Leadership."   Here.)


    Note on tone.  In as much as the resignation letter is addressed to the President, the many uses of "we" might be taken to include him, and at the close, she does thank him for "your leadership."  However, the blog essay also uses "we" and "us" throughout, and never mentions the President directly.

    Very Brief Blog: PRIOR AUTH RULE; CMS Finalizes with Blazing Speed, Payers Rebel

    Update - I think Biden deep-sixed this rule. Here.

    Since they may now be collector's items, I put the press release and fact sheet and Prior Auth Final Rule in a cloud zip file - here.


    CMS released a proposed rule in December regarding EHR and other requirements for Prior Authorization, and conducted an abbreviated comment period that riled some healthcare providers.   

    Remarkably, on January 15, 2021, CMS released the final rule (in the inspection copy that precedes Federal Register publication).   This was lightning speed, usually several months (or more) follow after the close of a comment period (January 4).

    The rule doesn't so much change the existence of prior authorization, which many providers wish would happen, as change the format and channels for prior authorization.  More advanced methods of electronic communication are required, with visibility in uniform formats to both patients and providers. 

    See the CMS fact sheet here.   Press release here.  See the CMS inspection copy final rule here.

    The Payer industry disliked the initial rule proposal, and has already pretty harshly slammed the rapidly prepared final rule as half baked and slapdash.  Here.  See also Healthcare Finance here. Medical Economics here.


    I don't know if this rule will be delayed by the Biden administration or not.  Another rapidly appearing rule, appearing under the unusual mechanism of "interim final rule," on Part B drug pricing, has been under court injunctions to postpone implementation.  Here.  This is the "Most Favored Nation" (MFN) drug price rule that pegs US Medicare prices for drugs to European prices for drugs.

    Proposed rule press, December 10, here.  The proposed rule press release states:

    Today, under President Trump’s leadership, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would improve the electronic exchange of health care data among payers, providers, and patients, and streamline processes related to prior authorization to reduce burden on providers and patients.

    In contrast, the January 15 press release on THE SAME RULE, deletes any mention of President Trump entirely.

    Today, the Centers for Medicare & Medicaid Services (CMS) finalized a signature accomplishment of the new Office of Burden Reduction & Health Informatics (OBRHI). This final rule builds on the efforts to drive interoperability, empower patients, and reduce costs and burden in the healthcare market by promoting secure electronic access to health data in new and innovative ways. These significant changes include allowing certain payers, providers and patients to have electronic access to pending and active prior authorization decisions, which should result in fewer repeated requests for prior authorizations, reducing costs and onerous administrative burden to our frontline providers. This final rule will result in providers having more time to focus on their patients and provide higher quality care.


    See my earlier blog: "After January 6 Disorder, CMS Stops Referring to President Trump's Leadership."


    Interesting Update:

    In a JAMA article on excess administrative costs in healthcare, Feb 2, 2021, 325:427, by Robert Kocher of USC, there is a discussion of Affordable Care Act Section 1104, which had a three-phase plan to reduce US administrative health costs.  Kocher mentions that Part III involved streamlining prior auth processes, but was never implemented.   This new Prior Auth rule from CMS appears to pick up the ball and run with it, but doesn't mention Section 1104 anywhere.


    For a 2020 trade journal article on pro's and con's of prior auth, from a payer perspective, here.


    AMA comments on the prior auth rule - here.

    Thursday, January 14, 2021

    Very Brief Blog: AMA Asks for Comments on First-Quarter New PLA Applications

    AMA takes PLA code applications quarterly, and posts them for comment for several days.  

    See the PLA home page here.  The Agenda of PLA codes for the February 6 CPT Editorial meeting is up at the AMA website, pdf  here.  

    As per the Calendar, request permission to comment by January 21.

    It looks like there are about 14 code applications, including for the PGDx elio tissue complete test (a 510k-cleared distributed 505-gene tumor test).  Five tests or for MindX RNA tests for memory, pain, mood, stress, and longevity.  

    After January 6 Disorder, CMS Stops Referring to President Trump's Leadership

    During the Trump administration, routine press releases from CMS have headlined with, or opened with, a touting of President Trump's leadership.

    For example: in August, the Medicare Coverage for Innovative Technology (MCIT) policy was proposed "under President Trump's leadership" (here).   The leadership quote was raised from the lead, to the headline, when CMS wrote on the same topic in September (here).  

    Policies ensuring "swift" vaccination under a "comprehensive plan" were released "under President Trump's leadership" in November (here).  Changes in renal dialysis payment rules that week also came about "under President Trump's leadership" (here).  And so on.

    The phrases "under President Trump's leadership" and "President Trump's vision" seem to have vanished now, after the Capitol riots on January 6.   For example, in the press release that finalizes the same MCIT rule which was headlined under President Trump's leadership just this fall, now there is no mention of the word Trump at all - here.

    In remarks this week to ABC, HHS Secretary Alex Azar distanced himself by pointedly framing January 6 as, "The rhetoric last week was completely unacceptable."

    Tuesday, January 12, 2021

    Big News: CMS Releases Final Rule on Special Coverage for Innovative Technologies (MCIT)

    Last fall, CMS proposed a special coverage rule that would provide automatic, four-year coverage for Breakthrough Devices after FDA approval or clearance.  On January 12, 2021, after market close, CMS released a fact sheet and the final rule, largely as proposed.  It's called Medicare Coverage for Innovative Technologies - MCIT.  The rule also includes a section where they codify in regulation some generic, longstanding Medicare policies about defining "reasonable and necessary," e.g. "meets the patient's need" and "provided by appropriate personnel."

    Some facts to know - 

    Diagnostics are in.

    CMS continued to be a little confusing about diagnostics, but they're eligible.  CMS notes in discussion that it had asked the public whether coverage should apply only to "breakthrough devices" or whether they should "also include diagnostics and drugs."  (Diagnostics are DEFINITELY devices for the FDA, and many have had breakthrough status already).   After repeating that view, CMS states clearly on page 38 of the early release version that any medical device so classified by FDA and reviewed as breakthrough, is covered under MCIT, "including in vitro diagnostics."  Whew.  

    Preventive devices are out.

    Devices are only covered under MCIT automated coverage if they are otherwise  eligible for coverage.  For example, eyeglass and dental devices wouldn't be covered even if they were MCIT, because they are excluded by statute.  Regular Medicare-covered devices are "reasonable and necessary to treat illness," not primarily "preventive."  It's not clear many preventive devices would be breakthrough status anyway, since BT status includes being intended to treat or diagnose a serious or fatal illness.

    Normal Payment Rules Apply.

    Normal payment rules apply, so if a product is bundled in a fixed price under a certain setting, the MCIT rule won't have any effect.  

    Normal illogical fee schedules and cumbersome coding delays also apply.  CMS makes several remarks that MCIT is only one of their many initiatives to reduce burdens and delays.   Note, too, that CMS opened an office for Technology Payment Policy last November (here).

    You Have to Apply

    If you went through FDA breakthrough review status, you have to apply for the CMS coverage.  Details will follow.   CMS writes, "Manufacturers simply need to notify CMS of their interest in MCIT for their breakthrough device via an email box and specify the desired start date for coverage.  CMS will coordinate with FDA and the manufacturer to ensure a smooth start to coverage once the breakthrough device is FDA market authorized."  The covered devices under MCIT will have their own CMS webpage.  It looks like your start date can be delayed if you can't ramp up and commercialize as fast as your FDA approval.  

    Commercial Payers - attention will be paid.

    One notable rule was reference to "commercial payers" as a major determinant of coverage, outside the breakthrough device part of the policy.  CMS is not using this as a hard-and-fast criteria, but rather includes text that between now and 2022, CMS will develop a process through which it might cover something covered by commercial insurers if it does not meet particular Medicare rules provided in the regulation.  

    It seems to me that few things covered by most commercial insurers would literally fail to meet Medicare's pretty bland and generic rules (such as "furnished by qualified personnel" and "meets patient's medical need.")  CMS is likely to include a discussion of commercial insurers' positions as part of NCDs and LCDs at some future point, for example.

    Implementing Coverage for "Indication for Use."

    The Breakthrough coverage is based on "indication for use."  I submitted a comment that sometimes FDA itself vacillates in its approval documents for a device between "intended use" and "indication for sue," but CMS left the final text pointing only to "indication for use."   

    Like USPSTF recommendations, FDA "indications for use" aren't always easy to translate into coverage rules (e.g. an MRI scanner might be approved to "image the human body" which isn't a medical necessity scenario for coverage.)   So we'll see how the policymaking over interpreting "indication" text in the labeling plays out.  

    Two Year Lookback

    CMS offers 4 years of coverage from the time of FDA approval, but will implement MCIT on a rolling basis if devices still have half the time (2 years) left to run.  So 2019, 2020 Breakthrough approvals can apply for coverage.  As CMS states, "Breakthrough devices market authorized within 2 years prior to the date the final MCIT rule became effective will be eligible for coverage."

    Volume of Cases?  2 to 4?  Really?

    CMS estimates that each MCIT application will require 15 minutes, that there will be 2 the first year, and 3, 4, 5 submitters in each subsequent year (after which applications will "level off.")   

    In part, this depends on CMS being aware of only several BT products so far.  See, however, an article in Nature Biotechnology by Johnston et al. (38:933, here), finding there have been 222 products in the BT pathway by January 2020, and the number was rising rapidly.   

    In addition, multiple products can enter the BT pathway because there is no approved product (say, 4); and after one of those 4 is approved, the other three remain in the BT pathway.  (4 products might eventually be approved because they entered at timepoints when no product of the type was yet approved).  

    Cocktail Party Question: How Far Back Does  This Idea Go?

    The idea of giving special coverage status to BT devices goes back at least to 2016; see my history article here (original from August 2019 and survey back to 2016).

    CMS Acknowledges BT Devices Might Fail LCDs, Without This Regulation

    In the regulatory cost section, at the end of the rulemaking, CMS notes it is aware of at least 2 recent medical devices that were rated substantial advances for new technology add on payments by CMS leadership, but failed to get LCD coverage (that is, had explicit LCD non coverage).  This can't happen again, for BT devices at least, under the rule.

    Other Notes


    Original version was also posted to Linked In here.


    FDA Home Page

    See the FDA homepage for the Breakthrough Device program here.  It's a review program - products are admitted in this "review pathway" because they are likely to meet breakthrough criteria and have promising features.  It's not based on the final results of clinical trials and final review.  

    Device is expected to provide more effective treatment, or diagnosis, for a life threatening or irreversible condition.   The device must meet ONE of the following;  (1) breakthrough technology per se, (2) no  approved alternatives [LDTs don't count against this, they're not "approved"), (3) significant advantages over approved alternatives, (4) availability is "in the best interest of patients."

    MCIT & Opposition

    The approved policy for MCIT overcomes objections of some academics that CMS should conduct its own review and not be handcuffed to accepted a prior FDA decision -  Neumann & Chambers, here.  

    AHIP, the insurance plan group, had opposition to the MCIT proposal (comment here.)  AAMC had concerns that some products might be arbitrarily excluded because of differing interpretations of the amount of Medicare-age patient data (here).

    Financial Spin

    While the market (DJIA) was unchanged on the next day, Renalytix and Exact Sciences were both up about 4%.  Here.   Press release from Renalytix praising CMS for the ruling, here.  For Exact, with a market cap around $25B, a 4% boost is worth about $1B.

    Wording of Device Indications

    I mentioned that device indications are sometimes pretty open-ended at FDA.  

    For example, the Lilly Alzheimer PET scan (Amyvid) is indicated "to estimate beta-amyloid density in adult patients who have cognitive impairment who are being evaluated for causes of cognitive decline."  Which patients?  When?  Everybody?   Always?
    Siemens PET/CT K113448 has a section, "Indications for Use" that simply defines the product as a PET/CT system (not an "indication") then states "the systems are intended to be used by appropriately trained health care professionals to aid in detecting, localizing, diagnosing, staging, lesions, tumors, disease, and organ function for the evaluation of diseases and disorders such as, but not limited to, cardiovascular and neurological disorders and cancer.  The images can also be used to aid radiotherapy planning."   Pretty hard to convert that into a LCD for which PET scans are medically necessary and which aren't.  


    References to the White House 

    In the CMS "Fact Sheet," CMS quotes President Trump's October 2019 Executive Order on CMS reform.  "[President Trump's Executive Order 13890 focused, in part, on CMS streamlining coverage, coding, and payment for innovative technology, including breakthrough medical devices.  This final rule delivers on President Trump’s order by creating an unfettered path to coverage beginning as soon as the same day as FDA market authorization for breakthrough devices."   

    While the policy highlights Trump's E.O., it avoids language sometimes used previously in press releases and fact sheets, which went to lengths to specially laud his vision and leadership several times while announcing a regulation.  "Thanks to President Trump's leadership....Thanks to President Trump's vision for America's seniors..."   These latter types of rhetoric are missing today.

    The CMS "Press Release" for MCIT has paragraphs of quotes from Seema Verma, but does not mention President 

    Contrast this to the December press release on prior authorization policy, writing, "Today, under President Trump’s leadership, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would improve the electronic exchange of health care data among payers, providers, and patients."


    The federal commission, MEDPAC, opposed the MCIT rule in its October 30, 2020, comment letter to CMS - here.   AMP comments here.

    Wednesday, January 6, 2021

    Very Brief Blog: CDC Belatedly Supports Major COVID Sequence Surveillance

    Update: Link to new, NYT story at bottom.


    Last spring, I assumed that NGS sequencing of COVID could help fill in gaps in our public health knowledge (for example, using big data to track the movements and patterns of 200 strains of COVID in a city, when we lacked people and case workers to do so).   Plus, obviously, tracking in real time the appearance of novel virus strain behavior like fatality or contagiousness.   Not so; we've read that the US is something like 30th or 60th in its rate of sequencing COVID in its population.

    Timely to see a news wire on January 5, 2021, that CDC is now investing in much larger scale U.S. sequencing studies through HELIX.   

    Quote: “Having a robust surveillance effort in place is critical to understanding how the SARS-CoV-2 virus is evolving, and how our public health response needs to adapt,” said Dr. James Lu, M.D., Ph.D., co-founder and President of Helix. “By bringing together the strengths of Helix, Illumina, and the CDC, we were able to quickly evaluate the prevalence of this new variant and take learnings from this effort to better and more proactively characterize future strains that will emerge.”

    Find the press release here:

    Coverage at CNN here.

    At 1 pm eastern, 10 pacific, January 6, NY Times posted a lengthy story [1900 words] on the need for more use of COVID-SEQ in the U.S.

    Tuesday, January 5, 2021

    Very Brief Blog: Final NCD for Colorectal Screening Liquid Biopsy: January 14, 2021?

    A quick note to remind us that last fall, CMS announced a proposed national coverage decision on colorectal cancer screening tests.  In the proposed decision - CAG-00454N - CMS will cover blood-based biomarker tests for colorectal cancer if they are FDA-approved and have performance of 74% sensitivity (picking up 3/4 of actual cancers) and specificity of 90% (1 in 10 results are a false positive).   See the proposal here.

    According to CMS regulations and proposal tracking sheet, the final decision is slated to appear on January 14, 2020.  Historically, CMS nearly always nailed these due-dates, although in the last couple years, several of them have lagged by several months (e.g. the CAR-T decision).   

    There are a number of ins-and-outs to the proposal, for example, annual and biannual test intervals can interact with the sensitivity/specificity statistics, and some tests might be better at picking up advanced adenomas, which don't seem to be counted as the NCD defines tests in terms of cancer metrics.   Nonetheless, if the final decision is more or less in the format of the proposal, it will provide clear measures and accelerated coverage to the multiple colorectal blood tests that are in, or will soon enter, FDA pipelines.   


    Generally, CMS only adopts new preventive benefits if they are authorized as line items by Congress or if they are adopted via NCDs after they are endorsed by the US Preventive Services Task Force.   Due to nuances of Medicare law, CMS has authority to create new preventive benefits in two areas, colorectal cancer and prostate cancer, based on its direct and de novo assessment of the preventive test technology.  It's unlikely, though, it would review a preventive test prior to FDA approval, and the proposal currently in play is designed to be triggered only after FDA approval.


    Epigenomics, the named test in the proposed NCD, issued a Euro5M convertible bond in January (here).