Tuesday, December 13, 2022

MolDx Publishes Article Briefly Describing "Equitable Pricing Model" EPM

For pricing new tests, MolDx requires each lab to fill out a standard spreadsheet of financial information in multiple cost domains, and including information such as sales volume projections (to assist in capital investment amortization).  The spreadsheet is online on the same web page as other technology assessment guidelines, typically as Excel frameworks.

There is also an article on how the spreadsheet information will be used by MolDx, which depends on an internal (unpublished) framework called Equitable Pricing Model EPM.   In October 2022, MolDx provided a short article noting that it uses an internal reference rule-set called EPM.

The EPM is especially important in the national annual MAC gapfill pricing process, as MolDx MACs have more than half the states and therefore control the median price reported by all the MACs.  That is, the MolDx MAC price will be the de facto permanent median price for the new code.



Equitable Pricing Model

Published 10/26/2022

The Equitable Pricing Model (EPM) is a proprietary algorithm developed and used by Palmetto GBA® and other contractors affiliated with the MolDX® program to establish Gapfill pay rates.  Its purpose is to determine an accurate price for a molecular pathology service that is fair and equitable (as much as is possible) using available data in accordance with CMS instruction. 

Test price accuracy in the scope of this model is defined as:

  • a price that does not inhibit a provider from performing a reasonable and necessary service, while at the same time, 
  • preventing excessive or exorbitant reimbursement which is not consistent with our fiduciary responsibility to the Medicare trust fund or preclude accurate pricing of other, subsequent tests.  

This EPM model seeks to minimize arbitrary pricing and improve price reproducibility by establishing a framework around established pricing guidelines/consideration requirements defined in 42 CFR 414 subsection G: 

(A) Charges for the test and routine discounts to charges;

(B) Resources required to perform the test;

(C) Payment amounts determined by other payors;

(D) Charges, payment amounts, and resources required for other tests that may be comparable or otherwise relevant; and 

(E) Other criteria CMS determines appropriate.