CMS has issued the Clinical Laboratory Fee Scheduel for CY2025 (First Quarter).
This consolidates all existing codes, all new codes for January 2025, and the results of all the appeals and gapfill processes that were running last summer. It gives final pricing for the rather massive list of tumor genomic sequencing procedures created by AMA over the last several years.
This latter PDF gives all the crosswalks assigned newly for 2025. If you had the equivalent table for 2019, 2020, 2021, 2022, 2023, you could recreate all the codes on the fee schedule that are based on underlying crosswalk calculatiosn rather than direct prices.
The CLFS has about 2,080 codes. About 35 have a "zero" price meaning they are in the 2025 gapfill process.
Six Codes over $7000
Six tests have fee schedule prices higher than $7000. These are
81529, cutaneous melanoma, $7193
0094U, rapid whole genome $7582
0211U, oncology, pan tumor (Caris) $8455
0315U, cutaneous squamous carcinoma, $8500
84116, exome, comparator, $12000
The last code, 84116, I believe to be an anomaly from PAMA pricing in 2017. An exome is about $4000, and some infants may require a "comparator genome" of each parent. 84116 was probably miscoded by someone as an exome triplet (baby, mother, father) for $12000. But read correclty, the code would be for 1 parent exome ("each"), which shouldn't cost more than 1 baby exome. Also called a "rank order anomaly" in the fee schedule world.
AMA updates this PDF on a rolling basis - when the new annual book is issued, it drops the last four quarters of PLA updates (since they are now annually published).
For January 1, 2025, there are 21 new codes, five updated codes, and I tally five deleted codes.
The FDA-approved Illumina TRUSIGHT code (a 517-gene tumor panel) is effective April 1, 2025, code 0543U.
The Guardant Shield test, blood-based screening for colorectal cancer, is effective April 1, 2025, code 0537U.
Like Rady Children's in San Diego, UCSF gets a rapid whole-genome code, 0532U, April 1, 2025.
Quest's plasma Alzheimer test is deleted (0346U), but there are several other new Alzheimer PLA codes from other sources, including Quanterix (0551U, P217 tau). Fujirebio gets codes for plasma GFAP and plasma neurofilament (0548U, 0547U).
It was big news on November 5, 2024, that the CARIS MI test, a tumor gene panel test, was approved by FDA as a PMA companion diagnostic. Now, the FDA approval documents are online.
See the Approval order (5pp), the Summary of Safety and Effectiveness (85pp), and the Labeling [instructions for use] (68pp).
The labeling is for single variants or small indels in 228 genes, MSI, TMB, and copy number amplification (certified in 1 gene). TMB is based on a whole exome with "a custom bait to measure all coding regions of the exome."
FDA LDT Law. The labeling and documentation sets a current FDA review standard for tumor genomic tests, and is therefore relevant to labs planning to submit PMA tumor applications to the FDA under the new FDA LDT law.
Find the documentation all on the PMA home page for P240010, here:
Caris MI is a sole-location FDA PMA test (240010). For a similar but kitted test, see webpage and documents for the Illumina CDx FDA PMA "TSO" test here. {P230011.)
Whereras the Caris S&E was 85 pp, the Illumina S&E was 175 pp.
AI Corner
Chat GPT 4o reviews the several PDF documents from FDA.
###
AI Overview
The FDA's recent approval of the Caris "MI Cancer Seek" genomic test reveals critical insights for molecular lab directors appraising standards for next-generation sequencing (NGS) technologies. Here are key aspects to consider based on the FDA approval documents:
1. Regulatory Pathway and Intended Use
The MI Cancer Seek test is approved under the Premarket Approval (PMA) process, indicating a stringent review aligned with its status as a Class III medical device【8†source】【11†source】.
It serves as a companion diagnostic for several therapies and provides tumor mutational profiling for oncology patients, covering 228 genes, microsatellite instability (MSI), tumor mutational burden (TMB), and a single copy number amplification (CNA) biomarker for breast cancer【8†source】【10†source】.
2. Key Approval Standards
a. Analytical Validation
The FDA mandated extensive validation studies, including:
Interfering substances analysis: Evaluating the effects of necrotic tissue, melanin, and fatty acids on assay performance.
Stability studies: Assessing DNA quality and variant calling reliability over time using aged FFPE samples【8†source】【10†source】.
b. Run and Sample Validity Criteria
Sequencing runs must meet strict metrics, such as >16 billion reads passing filters and Q30 quality scores【10†source】.
Sample validity criteria include read depths >100x for key genes and minimum RNA/DNA concentrations【10†source】.
c. Quality Control Measures
Comprehensive QC steps are required at every assay stage, from nucleic acid extraction to data analysis, ensuring high reproducibility and minimal errors【10†source】.
3. Laboratory Workflow and Constraints
The test is a single-site assay performed exclusively at Caris Life Sciences' laboratory, emphasizing centralized control【9†source】【10†source】.
Instruments used, such as the Illumina NovaSeq 6000, and the use of proprietary kits (e.g., extraction, library prep, and sequencing kits), highlight the technical sophistication required【10†source】.
4. Post-Approval Obligations
Caris must provide annual reports detailing the number of tests conducted and adverse event data.
Additional follow-up studies to confirm long-term assay reliability and explore potential extensions in validity claims are mandated【8†source】.
5. Practical Considerations for Molecular Lab Directors
Lab directors looking to implement or evaluate similar technologies should focus on:
Alignment with FDA standards: Ensure compliance with FDA-mandated analytical and clinical validation protocols.
Infrastructure readiness: Assess laboratory capabilities, including equipment, personnel training, and adherence to QC protocols.
Integration of bioinformatics: Evaluate whether your lab's computational infrastructure supports high-throughput data analysis akin to the MI Cancer Seek’s pipeline.
6. Strategic Implications
The Caris MI Cancer Seek approval underscores the FDA’s evolving expectations for NGS-based tests. For molecular labs, the focus should be on robust validation, tailored workflows, and meeting companion diagnostic requirements. Laboratories aiming for FDA approval must be prepared for significant upfront investment in validation studies and quality systems to align with such high regulatory standards.
Would you like a more technical breakdown of any specific aspect, such as bioinformatics workflows or detailed biomarker inclusion criteria?
###
Tell me more about the bioinformatics workflow and the biomarker validation/inclusion requirements.
###
Here’s a detailed breakdown of the bioinformatics workflows and biomarker inclusion criteria for the Caris MI Cancer Seek genomic test, emphasizing technical precision:
1. Bioinformatics Workflow
The bioinformatics pipeline for MI Cancer Seek is a critical component of the assay, ensuring the generation of actionable data from sequencing output.
a. Data Processing Steps
Sequencing Output
Sequencing is performed on the Illumina NovaSeq 6000 platform using a custom whole exome sequencing (WES) panel.
Output: Base Call (BCL) files, which are automatically transferred to a high-performance computing (HPC) server.
Data Conversion
BCL files are converted into FASTQ files using a custom version of bcl2fastq, adapted with FPGA for rapid demultiplexing.
RNA and DNA sequences are differentiated using synthetic labels added during cDNA synthesis.
Alignment
DNA data: Aligned to the hg38 (GRCh38) reference genome using Sentieon BWA.
RNA data: Processed through a whole transcriptome sequencing (WTS) workflow (though RNA results are not reported under this approval).
Variant Calling
Single Nucleotide Variants (SNVs) and Insertions/Deletions (Indels):
Variants are detected using a multi-step pipeline, including indel realignment and filtering.
Variants are annotated for clinical relevance using databases like gnomAD and COSMIC.
Copy Number Amplification (CNA):
CNA detection uses a segmentation algorithm to infer discrete amplification states.
Microsatellite Instability (MSI):
Determined by assessing >5,000 loci for frameshift mutations.
Tumor Mutational Burden (TMB):
Quantified as mutations per megabase, filtered to exclude non-coding, synonymous, and germline variants.
QC Criteria
Stringent thresholds for depth of coverage, read quality (Q30), and control sample performance are applied at each step to ensure run validity.
Any deviations result in re-analysis or re-sequencing【10†source】.
2. Biomarker Inclusion Criteria
The MI Cancer Seek panel includes biomarkers that meet rigorous analytical validation and clinical utility standards.
a. Analytical Validation
Inclusion Criteria:
Biomarkers were selected for their actionability in approved companion diagnostics or for tumor profiling aligned with professional guidelines.
Validation includes:
Detection sensitivity: Ability to identify SNVs and indels with high precision, even at low variant allele frequencies (e.g., <5%).
Reproducibility: Demonstrated across replicates and across a range of tumor types.
Cross-reactivity assessment: Ensuring no false positives due to interfering substances (e.g., melanin, necrotic tissue).
Biomarkers included must have proven clinical significance, categorized into three levels:
Level 1: Approved as a companion diagnostic for specific therapies (e.g., EGFR exon 19 deletions for EGFR inhibitors in NSCLC).
Level 2: Evidence of association with treatment response but not tied to FDA-approved therapies.
Level 3: Emerging biomarkers with potential clinical utility.
c. Exclusion Criteria
Biomarkers were excluded if:
Analytical performance (e.g., depth, sensitivity) was unreliable.
Clinical evidence was weak or not reproducible.
d. Example Biomarkers
EGFR Mutations in NSCLC:
Specific exon 19 deletions and exon 21 L858R mutations included based on FDA-approved EGFR inhibitors.
PIK3CA Mutations in Breast Cancer:
Mutations like E545K and H1047R validated for use with alpelisib (PIQRAY®).
MSI-H Status:
≥39 frameshift mutations across a defined panel are required to classify a tumor as MSI-high, enabling eligibility for immunotherapies like pembrolizumab (KEYTRUDA®).
Key Insights for Molecular Lab Directors
Integration with Lab Infrastructure:
Robust bioinformatics systems with high processing power are essential to handle the complex multi-step pipeline.
Continuous software updates are needed to ensure alignment with evolving clinical evidence for biomarkers.
Validation Challenges:
Replicating the level of analytical rigor required for biomarker inclusion (e.g., variant detection thresholds and QC metrics) necessitates substantial investment in validation studies and quality systems.
Clinical Utility Focus:
Ensure biomarkers have actionable implications, such as eligibility for specific therapies, to maximize clinical adoption.
Would you like a detailed comparison of this workflow with those for similar FDA-approved NGS panels?
###
As lab director, how do I present the scope and costs to my CEO? (The FDA-LDT pending law being one factor).
###
Presenting the need, investment, and timetable for validating your gene panel Laboratory Developed Test (LDT) at the level of the Caris PMA test requires a strategic and business-oriented approach. Here’s a structured plan for your presentation to the CEO:
1. Establish the Business Case
A. Highlight the Opportunity
Market Expansion: Position your test as a potential market leader. PMA validation ensures broader credibility, making your test eligible for FDA-approved status and companion diagnostic (CDx) partnerships with pharmaceutical companies.
Reimbursement Advantage: PMA-approved tests qualify for Medicare coverage under NCD 90.2 and often command higher reimbursement rates compared to LDTs.
B. Competitive Pressure
Use examples like Caris MI Cancer Seek or FoundationOne CDx to emphasize the growing dominance of PMA-approved tests in the oncology market.
Risk of Obsolescence: Stress how regulatory trends (e.g., FDA’s push to eliminate the LDT loophole) may limit the market viability of LDTs in the near future.
C. Patient and Provider Value
PMA validation ensures standardization, quality assurance, and compliance with rigorous FDA standards, increasing confidence among clinicians and patients.
2. Detail the Scope of Investment
Break the investment into phases and emphasize that each phase builds toward long-term business benefits.
A. Costs
Infrastructure and Equipment:
Upgrades to meet FDA standards for analytical and clinical validation.
Investment in automated workflows (e.g., liquid handlers, sequencers like NovaSeq).
Human Resources:
Hiring or training bioinformatics and quality assurance staff to develop robust validation pipelines.
Validation Studies:
Analytical Validation: Sensitivity, specificity, reproducibility, interfering substances, etc.
Clinical Validation: Retrospective and prospective studies to demonstrate clinical utility.
Regulatory Filing:
PMA preparation, submission, and ongoing post-approval reporting.
B. Timetable
Phase 1: Feasibility and Gap Analysis (6-9 months):
Assess your lab’s readiness compared to FDA standards.
Develop a roadmap for analytical and clinical validation.
Phase 2: Analytical Validation (12-18 months):
Validate sensitivity, specificity, reproducibility, and interference studies.
Phase 3: Clinical Validation (12-24 months):
Conduct clinical utility studies in line with FDA’s evidence requirements.
Phase 4: Submission and Approval (12 months):
Prepare PMA submission, respond to FDA queries, and finalize approval.
Total Timetable: ~3-5 years from initiation to FDA approval.
3. Quantify the ROI
A. Revenue Potential
Increased Reimbursement: PMA tests can achieve 50-200% higher reimbursement rates compared to LDTs.
Expanded Partnerships: Attract pharmaceutical collaborations for companion diagnostic indications.
Market Differentiation: Gain a competitive edge in the oncology diagnostics space.
B. Cost Savings
Avoid potential regulatory hurdles or forced migration if LDT exemptions are eliminated.
C. Intangible Value
Build the company’s reputation as an innovator and leader in precision oncology diagnostics.
4. Mitigate Concerns
A. Address High Costs
Emphasize phasing: Each step (e.g., analytical validation) delivers incremental benefits.
Explore potential grant funding or pharmaceutical sponsorships for companion diagnostic development.
B. Competitive Timeline
Stress that proactive investment positions the company ahead of regulatory changes and competitors.
C. Risk Management
Highlight how aligning with FDA standards mitigates compliance risk and increases confidence among payors and stakeholders.
5. Deliver a Clear Ask
End with a clear proposal that aligns with business goals:
Approval to Proceed: Request a green light to begin Phase 1 (Feasibility Study).
Initial Budget Allocation: Estimate the cost for the first 6-12 months (e.g., gap analysis and initial validation studies).
Strategic Commitment: Emphasize that PMA approval is a strategic imperative for long-term growth.
Presentation Outline
The Opportunity: Aligning with Caris-level PMA validation secures long-term competitiveness.
The Plan: A phased approach to validation ensures cost control and ROI.
The ROI: Higher reimbursement, market expansion, and regulatory compliance.
The Ask: Approval for the feasibility study and initial funding.
Would you like specific slides or additional details to support this proposal?
###
Chat GPT also offered to provide, then provided, a comparison of the new CARIS FDA test to other FDA tests like Foundation One.
I have no idea how accurate its tables are, and I've put this at a side bar with a warning that it's not validated - here.
####
Why is the ILMN S&E 175pp and hte Caris S&E only 85pp?
###
The significant length difference between the Illumina TSO and Caris MI Safety and Effectiveness (S&E) documents arises from several factors based on the detailed content of both documents:
Gene Panel Size:
The Illumina TSO test analyzes 517 genes compared to the 228 genes in the Caris MI test. This broader scope requires additional documentation for describing the expanded panel of genes, their clinical significance, and the validation studies.
Companion Diagnostic and Tumor Profiling:
The Illumina TSO test includes more complex companion diagnostic and tumor profiling capabilities, such as splice variant detection and fusion genes for RNA, which are not as extensive in the Caris MI test.
Comprehensive Validation Data:
Illumina provides exhaustive validation data, including studies on accuracy, reproducibility, and specificity for a broader range of biomarkers and across multiple cancer types. This is likely to involve more test conditions and data presentation.
Regulatory Designation and Additional Content:
The Illumina TSO test received Breakthrough Device designation, which often requires the inclusion of detailed supportive data and studies that meet stringent FDA requirements. This designation can lead to more detailed reporting in the S&E document.
Documentation Depth and Complexity:
The Illumina S&E document details additional processes like tertiary analysis, quality control metrics, and software integration that are more elaborate than what is described in the Caris document. Illumina also includes extensive descriptions of controls, secondary and tertiary analysis, and interpretation processes.
Market Strategy and Labeling:
The broader scope of the Illumina TSO assay, such as its use for both companion diagnostics and general tumor profiling, likely adds content to explain the integration of different biomarkers and the complexity of the workflow compared to the Caris MI test.
In summary, the increased gene panel size, the depth of validation studies, the broader application of the assay, and the regulatory designation contribute to the greater length of Illumina's S&E document.
Over the holiday, I took transcripts from a podcast called ALL-IN using its recent interviews with DJT (2024-06-20) and RFK JR (2024-08-30).
First, I asked it to extract key points referring to health policy from each of the long interview transcripts (sources at bottom).
Then, I asked Chat GPT 4o to compare overlaps and differences between each politician's healthcare remarks.
Finally, I asked, how can precision oncology advocacy best maneuver in this ecosystem?
###
Prompt
Compare a DJT interview on the podcast ALL-IN, 6-20-2024, with an RFK interview on ALL-IN, 8-30-2024.
The comparison is based on AI essays which extracted and summarized each person's healthcare policies.
###
Comparison of DJT's and RFK Jr.'s Podcast Views on Health Policy:
Overlap
Critique of Public Health Institutions: Both DJT and RFK Jr. criticize public health institutions for inefficiencies and undue influence.
DJT focuses on organizations like the WHO, emphasizing financial waste and influence by foreign powers (e.g., China), while...
RFK Jr. accuses domestic agencies like the FDA, USDA, and CDC of regulatory capture and prioritizing corporate profits over public health.
Pandemic Management and Preparedness: Both express dissatisfaction with aspects of the U.S. pandemic response. DJT highlights economic consequences and management issues, while RFK Jr. focuses on systemic corruption in regulatory practices and the health industry's profit motives.
Economic Ties to Healthcare: Both link economic policies to healthcare, albeit with different emphases. DJT discusses spending inefficiencies and innovation as drivers for improved outcomes, while RFK Jr. highlights the economic incentives of chronic disease management as a barrier to wellness.
Similarities
Systemic Reform: Both advocate for systemic changes, albeit with contrasting approaches. DJT emphasizes cutting bureaucracy and decentralizing policies, as seen in his support for state-level abortion decisions. RFK Jr. proposes restructuring subsidies and regulatory frameworks to prioritize public health and reduce corporate influence.
Skepticism Toward Pharmaceuticals: RFK Jr. is critical of pharmaceutical reliance (e.g., obesity drugs), promoting diet and exercise instead. DJT, while less focused on this topic, highlights inefficiencies in spending, which could be interpreted as an indirect critique of healthcare's cost structure, including pharmaceuticals.
Differences
Focus on Food Systems (RFK Jr.) vs. Broader Policy Critiques (DJT): RFK Jr. delves deeply into the impact of food systems on health, emphasizing reforms in agriculture, nutrition, and chronic disease prevention. DJT, by contrast, takes a more generalized approach, focusing on economic and political themes without detailed health-specific policy recommendations.
Tone and Expertise: DJT presents health policy from a managerial and political perspective, prioritizing bold decisions and framing issues in simple terms. RFK Jr., in contrast, offers a detailed, technical critique grounded in public health and regulatory dynamics, demonstrating a more policy-oriented approach.
Target of Criticism: DJT often frames problems as stemming from external entities (e.g., China or the WHO), while RFK Jr. emphasizes domestic corruption and corporate influence within U.S. systems.
Proposed Solutions: DJT's solutions focus on leadership-style actions like withdrawing from agreements or decentralizing decisions. RFK Jr. calls for comprehensive systemic overhauls, such as changing agricultural subsidies and rethinking food policy to address root causes of health issues.
Conclusion
DJT’s health policy perspectives are broad, political, and focused on leadership and economic framing, appealing to general audiences with straightforward messaging. RFK Jr., on the other hand, provides a deeply critical and specific view, emphasizing systemic reform and public health equity. While both highlight institutional inefficiencies and advocate for change, RFK Jr. demonstrates a more detailed and transformative vision, particularly regarding chronic disease and food policy, whereas DJT prioritizes economic arguments and decision-making efficiency.
### Precision Medicine Perspecitve ###
How should stakeholders in the genomics and biopharma industries best position their precision oncology products to look like winners in the new policy ecosystem in DC in 2025?
To engage with a new HHS and CMS leadership influenced by DJT or RFK Jr.'s perspectives, your approach should balance policy alignment with industry-specific benefits, while addressing their critiques of industry influence and regulatory inefficiencies. Here's a strategic framework tailored to their priorities:
1. Frame Cancer Genomic Testing as a Public Health Breakthrough
Leverage RFK Jr.'s Focus on Chronic Disease and Prevention:
Highlight how genomic testing represents precision medicine—a proactive approach that improves outcomes and reduces the trial-and-error use of ineffective therapies, thereby aligning with RFK Jr.’s desire to prevent chronic suffering and healthcare system inefficiencies.
Showcase case studies where genomic testing reduced the burden of unnecessary treatments, especially in underserved populations (a key RFK Jr. concern).
Tie to DJT’s Leadership Narrative:
Emphasize the leadership role of the U.S. in healthcare innovation, portraying cancer genomic testing as a way to maintain global medical and economic leadership.
Link genomic testing to economic efficiency by explaining how targeted therapies reduce healthcare costs by avoiding unnecessary treatments and hospitalizations.
2. Address Critiques of Industry Influence
Transparency in Data and Outcomes:
Create a public-facing repository of evidence showing the cost-effectiveness and clinical benefits of cancer genomic testing, positioning it as an objective, evidence-based solution, rather than a profit-driven product.
Emphasize partnerships with academic institutions and non-profit organizations to counteract the perception of “agency capture” by corporate interests.
Shared Decision-Making Models:
Highlight how genomic testing supports patient empowerment by enabling tailored treatment choices, aligning with themes of decentralization and individual agency favored by DJT.
Regulatory Independence:
Stress your support for rigorous and transparent regulatory oversight, addressing RFK Jr.’s concerns about corruption and inefficiency within agencies like the FDA and CMS.
3. Emphasize Economic and Equity Benefits
Cost-Savings Narrative:
Quantify how genomic testing reduces downstream costs (e.g., fewer side effects, shorter hospital stays, and more effective drug utilization), aligning with DJT’s emphasis on fiscal efficiency.
Highlight how the precision medicine approach strengthens the economic productivity of patients by enabling faster recovery and return to work.
Equity-Focused Messaging:
Stress that genomic testing reduces disparities in healthcare by enabling equitable access to cutting-edge therapies, aligning with RFK Jr.'s emphasis on public health equity.
Partner with community health centers or organizations to demonstrate commitment to underserved populations.
4. Position as a Driver of Innovation and National Leadership
DJT’s Focus on U.S. Leadership and Sovereignty:
Position cancer genomic testing as a way to reclaim America’s leadership in healthcare innovation, reducing dependence on foreign pharmaceutical technologies.
Tie genomic advancements to broader themes like AI in healthcare and national competitiveness.
RFK Jr.’s Environmental Concerns:
Highlight the use of sustainable manufacturing practices in your testing kits and therapies, connecting to RFK Jr.'s advocacy for environmental health.
5. Tailor Communications to Their Leadership Styles
For DJT:
Use bold, straightforward messaging that emphasizes “winning” in healthcare innovation and global leadership.
Provide concise, outcome-focused arguments showcasing economic and political benefits.
For RFK Jr.:
Provide detailed, transparent scientific evidence demonstrating how genomic testing addresses systemic healthcare inefficiencies.
Engage in discussions on reforming subsidies or regulations to incentivize broader access to genomic testing.
6. Build Broader Alliances and Advocacy Networks
Create coalitions with patient advocacy groups, oncology societies, and bipartisan policymakers to present a unified case for genomic testing’s value.
Use third-party endorsements from respected researchers or institutions to bolster credibility and counter skepticism about corporate motives.
Conclusion
To succeed with DJT- or RFK Jr.-influenced leadership, your messaging must:
Address their critiques of inefficiency, inequity, and regulatory capture.
Showcase the tangible benefits of genomic testing for patients, the economy, and healthcare systems.
Align with their broader ideological frameworks while steering the conversation toward actionable, evidence-based solutions.
This dual approach—anchoring arguments in health equity and cost efficiency while framing them within broader leadership goals—positions your innovation as essential and aligned with their priorities.
Growth of Signatera tests has been rapid. And note that Natera's one-year stock performance, during CY2024, has been up from $62 to $162, with a current market cap of $21B. (That's almost exactly the market cap today of ILMN). Here's the sales-of-Natera chart from the webinar:
click to enlarge
Reflecting the growth in covered applications. At Medicare Moldx, each minimal residual disease (Signatera) application is reviewed separately, requires its own publications, and goes through its own guantlet of tech assessment Q&A.
click to enlarge
Clinical utility includes, we expect, being able to spare some postsurgical CRC patients from unnecessary additional adjuvant (post op) chemotherapy. When recurrences occur, the webinar states, Signatera picks up the signal "8 months" before imaging.
click to enlarge
Advances in NIPT, Natera's original focus, were also discussed, including microdeletions, accuracy in the face of twins, and fetal RhD NIPT.
##
Have you see the abbreviation, TLDR? Too Long Didn't Read? Here's how Chat GPT 4o summarizes the Natera video.
##
AI Corner - Chat GPT 4o
##
Webinar Summary: Innovations in Cell-Free DNA Technology
Overview: This webinar focused on Natera's advancements in cell-free DNA (cfDNA) technology across oncology, prenatal genetics, and organ health. Key highlights included applications of cfDNA for early cancer detection, monitoring cancer recurrence, and prenatal genetic screening. Speakers emphasized the potential to revolutionize patient care by integrating cfDNA innovations into clinical practice.
Key Points:
1. Introduction to Natera and cfDNA Applications
Speakers: Sheetal Parmar, Steve Chapman, and Dr. Amber Shamberger.
Natera leads in non-invasive prenatal testing (NIPT), oncology, and organ health with over 250 peer-reviewed publications.
Applications span prenatal diagnostics, oncology (circulating tumor DNA or ctDNA), and transplant rejection monitoring (donor-derived cfDNA).
2. Oncology Innovations
Circulating Tumor DNA (ctDNA):
Used for molecular residual disease (MRD) detection post-surgery.
Tailored tests sequence tumor DNA to monitor recurrence, evaluate treatment response, and avoid unnecessary therapies.
Example: The Signatera test is widely adopted, with >1 million tests processed, aiding 40% of U.S. oncologists.
Early Cancer Detection:
Ongoing PROCEED trial for colorectal cancer screening via ctDNA (results expected 2025).
Plans to expand into multi-cancer early detection with blood-based testing.
The ACLA and AMP filed their closing arguments in the FDA-LDT litigation on November 25, 2024. The government has filed its final argument on December 23, 2024. Find them in one cloud zip file here.
Working primarily from these documents, I asked Chat GPT 4o to review and summarize. It predicts a win for ACLA/AMP, or otherwise, a substantial narrowing of the FDA's authority. I show the prompt and the AI response below.
At bottom, a separate and similar conclusion was reached by AI at Google Notebook LM.
I would note, both Chat GPT and Google Notebook LM were impressed on the "major questions doctrine." DOJ said this was entirely irrelevant in its closing brief. However, DOJ spent much of its time saying so (pages 10-19 (10pp) of its argument overall (10-35, 26pp).
Sidebar 1: Fictional Mockup Ruling
Chat GPT also provided a fictional mockup of the Judge's ruling (which will not occur until Spring 2025). Here.
Sidebar 2: AI Personas
Several characters, including includig Columbo, re-write the judge's ruling. Here. More Here.
### Prompt, Chat GPT 4o
For this project, focus on the three legal documents attached. They pertain to an FDA recent regulation claiming authority to regulate all US Lab developed tests. The Association for Molecular Pathology (AMP) and the American Clinical Lab Association (ACLA) filed their closing briefs, in Texas federal court, on 11/25/2024. The government (DOJ representing FDA and HHS) filed their closing brief on 12/23/2024.
Please review all three PDFs. Briefly summarize key arguments in each. Then, taking the role of a law school professor who is expert in FDA law and healthcare law, predict and explain the most likely outcome(s).
You may consider that the Texas federal courts, and the Fifth Circuit more generally, are often skeptical of government agency overreach and over interpretation. However, that posture should be only one of the inputs you consider.
###
Summary of Key Arguments from the Closing Briefs
1. Department of Justice (DOJ) and FDA Closing Brief (December 23, 2024):
FDA's Authority: The FDA argues that laboratory-developed tests (LDTs) fall within its jurisdiction under the Federal Food, Drug, and Cosmetic Act (FDCA) because they meet the statutory definition of "devices" as "apparatus" or "contrivances" intended for diagnostic purposes.
Major Questions Doctrine: The FDA asserts that this case does not trigger the major questions doctrine because Congress clearly authorized its regulation of LDTs, making the FDA’s actions consistent with statutory authority.
Alignment with CLIA: The FDA contends that its regulation of LDTs complements, rather than conflicts with, the Clinical Laboratory Improvement Amendments (CLIA), emphasizing that CLIA focuses on laboratory proficiency, while the FDA ensures clinical validity and reliability of diagnostic devices.
Rule of Lenity: The FDA dismisses the plaintiffs’ invocation of the rule of lenity, arguing that the FDCA's provisions are unambiguous and do not warrant such interpretation.
Defense Against Arbitrary Action Claims: The FDA defends the Final Rule as reasoned and responsive to public health needs, balancing regulatory burdens with public safety.
2. American Clinical Laboratory Association (ACLA) Closing Brief (November 25, 2024):
Overreach of Authority: ACLA argues that the FDA exceeds its statutory authority by treating LDTs as "manufactured devices," asserting that the FDCA was intended to regulate tangible medical products, not laboratory services.
Conflict with CLIA: ACLA emphasizes that Congress specifically tasked CLIA with regulating laboratory services, creating a distinct regulatory framework that does not overlap with FDA jurisdiction.
Major Questions Doctrine: The brief frames the Final Rule as a "major question" requiring clear Congressional authorization, arguing that the FDA’s actions impose significant economic and operational burdens on the clinical laboratory sector.
Arbitrariness: ACLA criticizes the FDA's ad hoc enforcement policies, highlighting that the lack of clarity undermines compliance and imposes unjustified risks to laboratories.
Request for Vacatur: ACLA advocates for complete vacatur of the Final Rule, citing its foundational legal deficiencies.
3. Association for Molecular Pathology (AMP) Closing Brief (November 25, 2024):
Major Questions Doctrine: AMP argues that the Final Rule represents an unprecedented assertion of authority over LDTs, requiring explicit Congressional approval under the major questions doctrine. They highlight that Congress has repeatedly declined to give the FDA authority over LDTs.
FDCA Interpretation: AMP disputes the FDA’s interpretation of the FDCA, asserting that LDTs do not qualify as "devices" due to the lack of commercial distribution and their exemption under the "practice of medicine" provisions.
Conflict with CLIA: Like ACLA, AMP underscores that CLIA already regulates the safety and reliability of laboratory tests, arguing that the FDA’s actions create regulatory duplication.
Arbitrary and Capricious Rulemaking: AMP alleges that the FDA failed to adequately consider the economic and practical impacts of the Final Rule, making its enforcement irrational and harmful to patient access.
Expert Prediction and Likely Outcomes
As a law school professor specializing in FDA and healthcare law, I predict that the court is likely to vacate or significantly narrow the FDA's Final Rule for the following reasons:
Judicial Skepticism of Agency Overreach:
The Fifth Circuit has consistently been skeptical of perceived government overreach. The FDA's expansive interpretation of "device" to include LDTs may be viewed as an overextension of its authority, especially given the established regulatory role of CLIA.
Major Questions Doctrine:
Both ACLA and AMP make compelling arguments under the major questions doctrine. The court is likely to agree that such a sweeping regulatory change demands explicit Congressional approval, which is absent here.
Conflict with Congressional Intent:
The existence of CLIA as a separate regulatory framework undermines the FDA’s assertion of authority. The court may find that Congress’s deliberate establishment of CLIA implies that the FDA’s jurisdiction over LDTs is limited.
[BQ: IVDs can be modified to LDTs with variations, under CLIA regulations.
This regulatory area is absurd if the activity is always a priori illegal under prior FDA law.]
Arbitrary and Capricious Standard:
The FDA’s reliance on enforcement discretion and the alleged lack of comprehensive consideration of economic impacts may persuade the court that the rulemaking process was flawed.
[DOJ argues that the benefits are not easily quantified, and so, FDA didn't. However, it leaves open the threshhold question of whether benefits exceed risks and costs.]
Remedies:
The court may opt for a full vacatur of the Final Rule, as requested by ACLA and AMP, aligning with Fifth Circuit precedent that vacatur is the standard remedy for unlawful agency actions.
In sum, the court is likely to rule in favor of ACLA and AMP, emphasizing statutory limits on FDA authority and the need for clear Congressional directives when expanding regulatory jurisdiction.
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BONUS - GOOGLE NOTEBOOK LM
Given the same input, Google Notebook LM came to a similar conclusion. It was unaware of the Chat GPT work.
Analysis and Prediction of Outcome
Based on the arguments presented and the general skepticism of Texas federal courts towards agency overreach, it is likely that the court will, at minimum, significantly narrow the scope of the FDA's final rule. Here's why:
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The court is likely to find that the FDA’s interpretation of "device" is overly broad. The FDCA's text focuses on tangible objects designed for diagnosis, and while an LDT involves such objects, it is ultimately a service performed by healthcare professionals using their skill and judgment.
The court is likely to be swayed by the absurdity of potentially criminalizing common medical procedures, as pointed out by the AMP, if the FDA's broad interpretation is accepted.
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The court is also likely to be persuaded by the existence of CLIA and its comprehensive regulatory framework for LDTs. This suggests Congressional intent to place these tests under a different regulatory scheme, one focused on laboratory practices rather than device manufacturing.
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The "major questions" doctrine is a significant hurdle for the FDA. Given the enormous economic impact and the criminal penalties involved, the court is likely to demand a clearer statement from Congress authorizing such a sweeping expansion of FDA's regulatory authority.
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While the Texas federal court may not entirely invalidate the rule, it is likely to find that it requires substantial revisions to align with the FDCA and to respect the existing regulatory framework under CLIA. This could involve narrowing the definition of LDTs subject to regulation or carving out exemptions for certain types of tests.
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It is possible that the court, instead of attempting to rewrite the rule, could simply vacate it in its entirety and remand it back to the FDA for further consideration. This would allow the agency to craft a new rule that more clearly articulates its authority and addresses the concerns raised by the ACLA and AMP.
Overall, the case highlights the tension between an agency's desire to regulate in the interest of public health and the limits imposed by statutory language and Congressional intent. The outcome of this case will have significant implications for the future of LDT regulation and the balance of power between agencies and the courts.
This year, 360Dx had an excellent review of the year in CMS policy-making, by journalist Kelsy Ketchum (here). One topic I had not clearly recalled: an April 2024 OIG report on how CMS may have mishandled its pricing of COVID testing.
The April OIG report is here, with coverage at the time in 360Dx here, and I also wrote a blog that flagged the OIG report, here.
The report values open communications and refers to a federal management handbook, the Green Book. Some of the points may be applicable to other situations such as communications between stakeholders and MACs and CMS on LCDs.
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AI Corner
Here's a Chat GPT review of the 27-page April report.
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Summary of the OIG Report on CMS Rate Setting for Molecular Testing in Public Health Emergencies
Key Findings:
The Office of Inspector General (OIG) report identified several shortcomings in CMS’s procedures for setting payment rates for clinical diagnostic laboratory tests (CDLTs) under the Clinical Laboratory Fee Schedule (CLFS) during public health emergencies (PHEs), particularly during the COVID-19 pandemic. These included:
Under-communication:
CMS did not engage effectively with Medicare Administrative Contractors (MACs) or laboratory associations during rate-setting for COVID-19 tests.
Laboratory associations and pricing coordinators reported insufficient communication from CMS, leading to missed opportunities for critical input.
Mistakes in Rate Setting:
Initial rates set at $51 for COVID-19 viral tests were insufficient to cover costs for all laboratories.
Adjustments to $100 and later $75 highlighted inconsistencies and inefficiencies in the process.
Potential Underpricing of Molecular Tests:
The use of outdated methodologies, such as crosswalking (comparing tests to older, unrelated tests like Zika), resulted in rates that did not reflect the true costs of high-throughput COVID-19 testing.
Recommendations:
Improve Stakeholder Communication:
Establish clearer and more inclusive communication channels between CMS, MACs, and laboratory stakeholders during PHEs.
Enhance Flexibility in Rate-Setting Procedures:
Provide MACs greater flexibility to adjust rates during emergencies to better reflect laboratory costs and incentivize the adoption of necessary technologies.
Legislative and Procedural Reforms:
CMS may need legislative authority to streamline rate-setting and improve responsiveness in future PHEs.
Industry Concerns:
The reliance on interim rate-setting policies without robust stakeholder engagement led to delays and inefficiencies.
Laboratory representatives emphasized the need for funding mechanisms to support investments in high-cost equipment and for localized solutions in rural areas.
Implications for the Laboratory Industry:
Molecular Testing Underpriced: The initial rates failed to account for increased costs associated with high-throughput technologies and emergency testing demands.
Missed Opportunities for Collaboration: Better communication could have expedited the adjustment of rates and enhanced nationwide testing capacity.
Need for Process Reform: As molecular diagnostics become more integral to public health responses, CMS must address these procedural gaps to ensure accurate pricing and broader access.
This report underscores the critical need for CMS to revise its processes to better serve laboratories and patients during emergencies, while ensuring adequate compensation for cutting-edge molecular diagnostics.
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In its review and research, can you clarify more why the OIG authors concluded that CMS had mis- or under-communicated with MACs?
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The Office of Inspector General (OIG) report concluded that CMS under-communicated with Medicare Administrative Contractors (MACs) during the public health emergency (PHE) based on several findings drawn from interviews and process reviews:
Lack of Proactive Engagement:
The OIG found that CMS did not adequately involve MACs’ pricing coordinators before issuing critical rulings to adjust payment rates for COVID-19 tests.
For example, MAC pricing coordinators were not consulted before CMS issued its April 2020 ruling, which increased the payment rate for high-throughput COVID-19 testing to $100.
A pricing coordinator stated that they learned about the ruling only after it was implemented through a Technical Direction Letter (TDL), bypassing their opportunity to provide input on cost structures or implementation issues.
Missed Opportunities for Input:
MAC pricing coordinators expressed a desire to provide feedback on the rates CMS set, particularly given the variability in laboratory costs for conducting tests.
CMS rulings were issued independently, without a process for MACs to share concerns or provide alternative pricing methodologies.
Reactive vs. Proactive Communication:
Laboratory associations reported that they often had to initiate contact with CMS to obtain updates or clarify rate-setting decisions, indicating a reactive approach to communication.
CMS did not engage in systematic dialogue with MACs or laboratory stakeholders to gather detailed cost data or understand operational challenges during the rate-setting process.
Quality of Communication:
Stakeholders reported that the lack of communication resulted in a one-size-fits-all pricing decision. For instance:
The initial $51 rate was set using crosswalking to the Zika test, despite significant cost differences between Zika and COVID-19 testing.
The subsequent $100 rate was adequate for all labs but did not account for variances, such as efficiencies some labs had achieved that allowed them to perform testing at lower costs.
Guidance Gaps:
The OIG noted that CMS provided insufficient guidance to MACs on adapting rate-setting policies to the emergency context. This left MACs constrained by standard methodologies (e.g., crosswalking or gapfilling) and unable to use alternative methods to better reflect the costs and incentives needed during a PHE.
Green Book Principles:
The OIG cited principles from the Standards for Internal Control in the Federal Government (the "Green Book"), highlighting that effective communication is essential for achieving objectives. The lack of relevant and timely information exchange between CMS, MACs, and stakeholders hindered CMS’s ability to set adequate rates.
The OIG concluded that CMS under-communicated because it failed to proactively seek input from MAC pricing coordinators and laboratories during rate-setting and relied on a top-down approach that bypassed established channels for feedback. This approach resulted in delays, inefficiencies, and underpricing of critical testing during the COVID-19 PHE.
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Appendix - Green Book ?
The Green Book refers to the "Standards for Internal Control in the Federal Government," published by the Government Accountability Office (GAO). It provides a comprehensive framework for designing, implementing, and evaluating effective internal control systems within federal entities. Key highlights include:
Purpose:
Ensures federal agencies operate efficiently, achieve objectives, comply with laws, and provide reliable reporting.
Acts as a critical tool for improving accountability and governance.
Framework Structure:
Organized around five major components of internal control:
Control Environment: Establishes the foundation for the internal control system with ethical values, integrity, and oversight responsibility.
Risk Assessment: Identifies, analyzes, and responds to risks affecting objectives.
Control Activities: Implements specific policies and procedures to achieve objectives.
Information and Communication: Ensures timely and quality communication for informed decision-making.
Monitoring: Assesses the performance of the internal control system and remediates deficiencies.
Principles:
Each component is supported by 17 detailed principles, which are further broken down into attributes for specific actions and expectations.
Applications:
Federal agencies are required to implement these standards under the Federal Managers’ Financial Integrity Act (FMFIA) and Office of Management and Budget (OMB) Circular A-123.
Can be adapted by non-federal entities, including state and local governments, as well as nonprofits.
Documentation:
Management is required to document internal control responsibilities, system designs, and assessments to ensure transparency and accountability.
Evaluation and Deficiencies:
Agencies must evaluate the design, implementation, and operating effectiveness of controls. Identified deficiencies are to be assessed for significance and corrected promptly.
In the context of your inquiry, the Green Book serves as a benchmark for assessing CMS’s internal control failings, such as under-communication and errors in rate-setting during public health emergencies. The identified gaps, like insufficient stakeholder engagement or lack of documented processes, would likely contravene the principles of Information and Communication or Monitoring outlined in the Green Book.
