Friday, September 30, 2016

CMS Posts Pricing Recommendations for CY2017 Lab Codes

On September 30, 2016, CMS posted the "crosswalk/gapfill" recommendations for NEW codes that will be used in January 2017 - as well as results of several appealed codes from last fall's pricing exercise.

The CMS homepage for the Clinical Lab Fee Schedule is here; the 8 page PDF for the new proposed prices for CY2017 is here.  You may want to view in tandem with the recommendations of the PAMA lab advisory panel, which CMS posted here.

The postings are "preliminary determinations" and comments are accepted and the final determinations may, in fact, change.  CMS states, "We  post preliminary determinations on our website in September...we accept additional public comments...through October of each year."

Note that this process is for brand-new 2017 codes.  Codes put in the gapfill process for this year (CY2016) had proposed MAC gapfill prices posted in the spring, but final MAC gapfill prices have not been posted yet (as of September 30, 2016).   That process is running late; CMS usually posts final gapfill prices by early September.  Details after the break.

AMA Loads Webpages for "PLA" Quarterly Lab Codes

PAMA, the laboratory pricing reform law, requires CMS to create rapid temporary codes (on external stakeholder request) for what PAMA defines as "advanced diagnostic laboratory tests," and also requires CMS to create "tracking codes" for FDA approved tests on request.

In June 2016 rulemaking, CMS announced it would accomplish both tasks by making quarterly "G" codes, unless AMA had already created a code.

For the past year, AMA has been discussing and refining how it could create quarterly lab test codes outside the regular CPT Category I system.   Now, CMS has posted webpages that describe the quarterly coding process for "PLA - Proprietary Laboratory Analyses."   PLA codes are deliberately easy to get - they are designed to be a "superset" of the codes CMS needs to implement for PAMA.

In brief, AMA will create the codes on a rapid quarterly basis, and CMS will have its own processes to determine what "is" an ADLT.

The AMA PLA Home Page is here.  See multiple links, such as application form and calendars.  Pay particular attention to the PLA FAQ here.

A 15 slide introductory deck on PAMA PLA is here.  The first deadline cycle will accept applications October 1-15, 2016, for a PLA committee meeting in mid November.


Wednesday, September 28, 2016

The Topsy Turvy World of Medicare Genetic Pricing

Currently, as the CY2016 gapfill year proceeds, Medicare's pricing for genetic testing contains some topsy-turvy extremes and marked regional variation in how CPT coding conventions are applied.

While several examples could be provided, the most eye popping variations occur in the field of BRCA testing and hereditary breast and ovarian cancer gene panel testing.

The original codes in this field are for BRCA1 & BRCA2 testing "including common dup/del variants," 81211, with a CLFS price of $2180.22; and "uncommon dup/del variants," 81213, with a CLFS price of $581.84 (together, $2762.06).

Last year's new code consolidated these two codes into one, 81162, BRCA1 & BRCA2 full sequence analysis with full dup/del analysis, priced at $2485.86.

This year's new code set is for a gene panel including BRCA1 & BRCA2 and several other genes contributory to hereditary breast cancer.  This is code 81432.   It has a paired code for dup/del analysis, 81433.   While Medicare won't finalize gapfill pricing until November 2016, the current public gapfill median prices are $622.53 and $159.48, respectively (together, $782.01).

Regarding the latter code, the MolDX program operates in some 25 states now, and according to the current MolDX website, 81433 is a nonpayable code (do not pass go, do not collect $159.48).

This is best displayed visually.   If you perform BRCA 1 and BRCA 2 testing AND MORE GENES, the price drops by 75%.   If you perform the HBOC panel testing on different days, or by stack coding, pricing could probably exceed levels of $3000 to $4000 at CLFS line item prices.   If you live in a MolDX state, perform one panel, and code per AMA and MolDX instructions...you get $622.  See chart, and remember the test panels on the right are more genes, more work, more reporting, and more clinical utility:

Click on image to enlarge.
Relief from the craziness may be in sight.

More and more frequently (based on public information from public companies), this gene panel testing is rapidly being consolidated into pan-cancer panels, e.g. the Myriad MyRisk test and others.  According to the company, which is the largest provider of hereditary risk testing at some $600M per year, "We completed the conversion to myRisk among our targeted physicians and have made gene panel standard of care within the marketplace" (August, 2016).

Checking on the public agenda for the September 28-29 AMA CPT meeting, a corresponding multi syndrome hereditary testing cancer code as been proposed (Tab 52).  Sounds like it is time.

MolDx's Two Guidances for Liquid Biopsy Tumor DNA

The clinical area of liquid biopsy for circulating solid tumor DNA is moving rapidly, and the Medicare MolDX program has two current guidance documents (as of 9/28/2016).

LBx Technical Performance Specs, Ver 2, Dated 5/24/2016
The first is Version 2 of its guidance document for analytical validity of circulating tumor DNA.  This is available here (M00135, V2, Analytical Performance Specifications for Qualitative Tumor-only Somatic Variant Detections Using Circulating Tumor DNA).   This is a detailed five page performance specifications document, released in May 2016 as Version 2.  As written, it requires both CLIA certification "and" NY State certification, "and" fulfillment of the extensive MolDX test performance standards provided.  However, the Q&A document with a later issue date (8/8/2016) states that the NYS requirement has been or will be rescinded.

LBx Q&A, Dated 8/8/2016
The second important guidance is a Q&A on MolDX's approach to Circulating Tumor DNA.  This is an online webpage, released in August 2016, available here.   This document notes that FDA approved tests (e.g. the Roche cobas EGFR ctDNA test) are expected to meet MolDX technical criteria.

In the versions available online as of 9/28/2016, both documents in a zip file in the cloud, here.

MolDx notes in the Q&A, that while it currently provides technical guidance, it has not yet issued an LCD (coverage criteria) for liquid biopsy tests in solid tumors.

Monday, September 26, 2016

The NBER Conference: Economics of Personalized Medicine (Sept 21-22, 2016)

On September 21/22, 2016, the National Bureau of Economic Research held an academic conference on "Economic Dimensions of Personalized and Precision Medicine."   The conference was supported by USC and Columbia University, and chaired by Ernst Bernt, Dana Goldman, and John Rowe.

For a note on the conference at the Healthcare Economist blog by Jason Shafrin, here.  For the conference website (including numerous downloadable papers and powerpoints), here.

I've also cut/pasted the conference agenda after the break.


Saturday, September 24, 2016

House Hearing on CMMI: Website, PDFs, and (Unique) Transcript

On September 7, 2016, the House Committee on Budget under Chairman Price held a nearly three hour hearing on the Center for Medicare and Medicaid Innovation.

The government's website is here.  The following speakers testified (PDFs online) and there was spirited debate.
  • Chairman Price
  • Mark Hadley, Deputy Director, OMB
  • Joseph Antos PhD, American Enterprise Institute
  • Ted Okon, Community Oncology Alliance
  • Mark Madden MD, OrthoVirginia
  • Topher Spiro, VP, Center for American Progress

Video streams online at the House website.  The House website provides no transcript, but I provide one for you on this blog: here.

For one zip file containing the various PDFs, some additional letters from stakeholders, and the transcript, click here.  (To download look for "down" arrow.)

Friday, September 23, 2016

Medicare's Use of MoPath CPT Codes in CY2014

Earlier this year, CMS released CY2014 data on the use of all CPT codes in Medicare Part B (here).  This data includes extensive provider look-up tables.   (The actual CPT code aggregated data is similar to that released in 11/2015 for CY2014, but the full data sets are more comprehensive by state, or by lab, or by physician, etc.   The full dataset is 1.9GB and needs to be handled by special database software, but the data is open access).

In an excel spreadsheet in the cloud, I've pulled the molecular pathology codes.  They are sorted three ways:  (1) by volume of services per code, (2) by dollars paid by Medicare per code, and (3) a separate table only for Tier 2 codes.   In the cloud, here.  (Download by clicking the small down arrow, upper right in most views).

For screen shots, see larger view by clicking on the images below.
  • By volume, the Tier 2 code 81401 leads, with 422,556 services, while seven codes had >200,000 services and then the usage dropped suddenly to <60,000.  80% of codes had less than 10,000 uses by CMS, half had less than 1000 uses by CMS.  One-third of the codes shown were paid by CMS at least once, but less than 100 times.
  • By dollars, in 2014, two Cyp genes led in Medicare payments, with $273M in total payments or about 50% of all CMS molecular payments.   75% of codes listed had 2% of CMS dollar payments.
  • Among Tier 2 codes, 81401/Level 2, dwarfs all other Tier 2 codes, with about 80% of Tier 2 utilization and $46M paid or about $110 per CMS claim.  Only 2 providers submitted any Level 3 codes, with a total of just 17 tests paid and grand total of $4,700.


(More after the break).

Wednesday, September 21, 2016

The Awesome Complexity of Billing US Payers for Genomics:

I'm giving two talks in Europe this fall on the complexities of the US policy frameworks for genomics laboratories, one issue being the complexities of billing US payers.

It's a commonplace that US administrative costs soar above the costs of other countries; see for example here and here and here.   This complexity may be at its worst, a perfect storm, for genomics laboratories.   For "efficiency," US healthcare ranks at the bottom of 11 developed nations.

While their goal is laudable - to help labs understand and cope with the US system as-is - a new article by Lennerz et al. of MGH shows how awful the system is in excruciating, academically documented detail.   See "Healthcare Infrastructure for Financially Sustainable Clinical Genomics," here (not open access).



It remains unfortunate that an otherwise meticulous AMP-funded documentation of NGS lab costs, published in May 2016, left out overhead and administration costs because they seemed too difficult or variable to calculate precisely (Sabatini et al., open access, here).   Medicare pegs gapfill genomics prices to the numbers they see ("$592.45"), and the colossal costs that tower over Lennerz' work are absent in the cost tabulation of Sabatini et al.

It's a terrible gap, because in general, Medicare does indeed pay for overhead costs, in hospital inpatient, outpatient, physician fee schedule, and other systems.  Even the most efficient large labs, like Quest and Labcorp, have overhead costs that are about equal dollar for dollar to "costs of goods sold," the costs documented by Sabatini et al.  It's probably worse than that for genomic tests, as presented but not dollarized by Lennerz et al.

Addendum (September 27): A new article in Clinical Chemistry also looks at lab costs for advanced genomics such as exomes and again underplays necessary overhead and management costs; van Nimwegen et al., here; Genomeweb commentary, here.

Are FDA, Medicare, and Moonshot Converging on Cancer Testing? ...Medicare?!

Putting together precision medicine policy milestones of the past year, it looks like Medicare is becoming closely aligned with goals of the FDA, the Precision Medicine Initiative, and Cancer Moonshot.

PMI/Moonshot
One of the cardinal goals of the Precision Medicine Initiative and especially the Cancer Moonshot headed by Joe Biden are to break down information silos and creative public databases on cancer genomics.
In June 2016, Foundation Medicine announced it was supporting Cancer Moonshot by "contributed 18,000 genomic profiles from our FoundationCORE knowledgebase to the NCI Genomic Data Commons Portal (GDC)" (here).  
FDA
The FDA is producing groundbreaking guidance documents about the FDA validation of genomic tests based on public curated databases.  A harbinger was the approval of a genomic cystic fibrosis test based on a public variant database.  This approach is full steam forward; see a recent guidance document from the FDA on the calibration and regulatory use of variant databases, here.

Medicare
Medicare has a roughly 25-state unified policy system called MolDX in which local coverage determinations most often originate in the "Palmetto" Medicare contractor jurisdiction and propagate to other multi state jurisdictions.  In September 2016, the Palmetto MAC proposed a new local coverage policy for genomic testing in lung cancer which mandates extensive public data deposition in elaborately defined public access variant databases.    The local decision specifically cites the goals of Cancer Moonshot as being concordant with Medicare's view of eligible open access public genomic databases.  Specifications of an eligible database are listed below the break.  For a deeper dive, see here.

Tuesday, September 20, 2016

Senate Posts Video, Testimony on Precision Medicine and FDA/LDT; With Transcript !!

On September 20, 2016, the Senate HELP committee held a hearing on precision medicine and regulation.  Topics included FDA regulation of LDTs.

For an unofficial transcript in the cloud, click HERE.  

Testimony was provided by David Klimstra, Dept. Pathology, Memorial Sloan Kettering; Brad Spring, BD Life Sciences; Jeff Allan, Friends of Cancer Research; and Karen Kaul, Pathology, University of Chicago.

See files and video online here.


Coverage at Genomeweb, here.

Magnum Opus on State of Precision Medicine (Ashley in Nature Rev Genet, 9/2016)

Euan Ashley of Stanford has produced a "magnum opus" on the state of precision medicine, published in Nature Reviews Genetics in September 2016.

The 16 page article has some 140 references.  For a 45-minute Youtube talk by the author, filmed earlier in 2016, see here.

Ashley, EA (2016).  Towards Precision Medicine.  Nature Reviews Genetics 17:507-22.  doi:10.1038/nrg.2016.86  


Monday, September 19, 2016

Health Affairs New Blog Series: Drugs and Medical Innovation

There is an ancient Greek saying, "Those whom the gods would destroy, they first [drive mad]."  My variant is, "Those whom the gods would destroy, they first make talk about value-based pricing."

A few months ago, I wrote about a particularly creative and multi dimensional blog published at Health Affairs by Dana Goldman and colleagues at Precision for Medicine (blog here; Goldman is also a professor at USC.)  

So I was happy to see Goldman and company feature additional work at Health Affairs and in the open access format.  Health Affairs will have a new blog series, "Drugs and Medical Innovation" (introduction essay here.)  It's supported by the "Innovation and Value Initiative," here, a pretty elaborate website itself.  (Initial funding of I.V.I. is from Precision Medicine Group.)

From the Drugs and Medical Innovation homepage at Health Affairs, here.   An introductory essay by Goldman et al. is "Rapid biomedical innovation calls for similar innovation in pricing and value measurement" - yes!   Nicholas Timmins responds that value assessment may not be that far off and in need of repair; here.  [Timmins just wrote a book about NICE; here.]


Although not squarely in the same series, within the week Health Affairs also published a blog by Berenson et al., "Refining the framework for payment reform," and one by Lee et al., "The politics of Medicare and drug-price negotiation."  



 

What Health Policy Can Learn from Public Transit

For some years I've made the observation - from my view as a health MBA rather than a health MPH - that most American health economics focuses on the big picture from a public health policy perspective ("We spend $3T on healthcare, but should spend $2T") and not the actual cash flows and economic strategies and as a result, policy responses often don't match problems.  The problem and the response sail past each other at a ninety degree angle, without touching.

Through a chain of coincidences, I ran across a fascinating book on public transit that I would daringly propose should be required reading in health programs.   The book is "Human Transit: How Clearer Thinking about Public Transit Can Enrich Our Communities and Our Lives" (2011; at Amazon; ebook, paperback, or hardcover.)   More on the chain of coincidences and the book's author, see footnote. [*]


Health Wonk Treat: History of NICE in the UK (open access; 200 pp)

For real health wonks who love to track the history and trends in policy assessment - see a nearly 200 page, open access book called, "A Terrible Beauty: A Short History of NICE," the National Institute for Health and Care Excellence in the U.K.   Get it as a PDF book, here.

For an essay at the UK philanthropy Kings Fund, on the book, see here.

The authors are Nicholas Timmins, Sir Michael Rawlins, and John Appleby.  Timmins writes and blogs at Health Affairs (here, here, here) and is an editor at Financial Times (here).  Rawlins, who I had the chance to share a panel with once, was the long time head of NICE and wrote an agile and entertaining book about health tech assessments, Therapeutics, Evidence, and Decision Making 2011, here.  See also Rawlins' deft analysis and prose in his 2008 Harvey Oration, 54pp, here.

    

NCCN to hold "Value Tools for Patients in Cancer Care" - December 9, 2016

NCCN has announced a national "Patient Advocacy Summit" entitled "Value Tools for Patients in Cancer Care."  The workshop, to be held at the National Press Club on December 9, 2016, has free registration.   A flyer for the meeting is here.


Register at Nccn.org/policy  

Additional Background

NCCN previously held a summit on "Value, Access, Cost of Cancer Care" in New York on September 11, 2015 - here.

Value frameworks are plentiful - from ICER in Boston; from Sloan-Kettering (Drug Abacus, here), from ASCO, and elsewhere.  See the ASCO Value Framework here.   See also the organization and trade journal, Association for Value Based Cancer Care, here.  For an article in The Oncologist, May 2016, see here.   For an article at AJMC, here; for a review at the ZS pharma consultancy, here; for an article in Nature Reviews Drug Discovery, here.  For an article by Jason Shafrin, here.

On September 15, Washington lawmakers introduced a bill "that would require drug makers to justify their pricing and provide a breakdown of their costs before raising prices...more than 10%;" here, here, here.


Addendum - November 16, 2016

Two other December 2016 Washington workshops of interest to oncology.

On December 12-13, 2016, the Institute of Medicine holds a workshop on "Drug Development Paradigm in Oncology."  Here.

On December 13-14, 2016, IOM holds a workshop on "Ensuring Patient Access to Affordable Drug Therapies."   Here.  A prior session on this topic was held in November 2016; here.  A post meeting report by Pink Sheet (subscription), here.

In November 2016, IOM released a 9 page brief on pain and opioid harms; here.