It's a case study based on an active area of innovation, antibiotic sensitivity testing. However, I'd emphasize the the scope and logic of the thinking applies to other kinds of diagnostics (or even other kinds of medical innovation) as well.
Wednesday, October 31, 2018
Consortium Paper Sets High Water Mark for a Diagnostics Strategic Landscape (Case Study: AST)
A new paper in Nature Reviews Microbiology sets a high standard for thinking about the dynamics and strategies of commercialization of a class of novel diagnostics.
It's a case study based on an active area of innovation, antibiotic sensitivity testing. However, I'd emphasize the the scope and logic of the thinking applies to other kinds of diagnostics (or even other kinds of medical innovation) as well.
It's a case study based on an active area of innovation, antibiotic sensitivity testing. However, I'd emphasize the the scope and logic of the thinking applies to other kinds of diagnostics (or even other kinds of medical innovation) as well.
Tuesday, October 30, 2018
Very Brief Blog: Bay Area "Business of Personalized Medicine Summit" - December 6, 2018
Thursday, December 6, 2018, is the 15th Annual Business of Personalized Medicine Summit, to be held at the SFO Westin.
Sponsors include Foley Lardner, Personalized Medicine Coalition, Analysis Group, Deloitte, BIO, and Slone Partners.
See the home page here and the agenda page here. (I'm speaking on a panel in the afternoon).
Highlights include:
Register here.
Sponsors include Foley Lardner, Personalized Medicine Coalition, Analysis Group, Deloitte, BIO, and Slone Partners.
See the home page here and the agenda page here. (I'm speaking on a panel in the afternoon).
Highlights include:
- Keynote by Helmy Eltoukhy, Co-Founder, Guardant Health
- Investments and Exits, Jonathan Norris, Silicon Valley Bank
- Finance and VC Panel
- Big Data Panel
- Disruptive Innovation Panel
- FDA & Regulatory Panel
- Payment and Reimbursement Panel
- Clinical Integration Panel
- Closing Keynote: Harry Glorikian
Register here.
Very Brief Blog: CAP Today Highlights Revenue Cycle Management
With the excitement of the World Series behind us, we can turn attention to the excitement of revenue cycle management.
One of the most remarkable statements I've seen in 2018 was a quote in the Foundation Medicine final investor report before it was wholly absorbed into Roche:
Addressing rationale responses to the bizarre world of laboratory economics and claims processing, see a detailed article in CAP TODAY for October 2018 - "Revenue Cycle Services," here.
The article focuses on one industry player, Telcor, but the pains are industry wide. Good article.
___
Parts of the article reminded me of Jonathan Bush's 2014 book, "Where Does It Hurt," about founding the large company Athena Health based on building up software and rulebooks that understood the bizarre world of payer claims processing. In October 2018, Athena's market cap was about $5B, revenue $1.2B.
One of the most remarkable statements I've seen in 2018 was a quote in the Foundation Medicine final investor report before it was wholly absorbed into Roche:
"Most of the commercial third party payors that reimburse us do so based upon CPT codes, or based on other methods such as percentages of charges or other formulas that, to our knowledge, are not specific to us and not made known to us."Pretty amazing financial facts for a company being bought for $2.4B !
Addressing rationale responses to the bizarre world of laboratory economics and claims processing, see a detailed article in CAP TODAY for October 2018 - "Revenue Cycle Services," here.
The article focuses on one industry player, Telcor, but the pains are industry wide. Good article.
___
Parts of the article reminded me of Jonathan Bush's 2014 book, "Where Does It Hurt," about founding the large company Athena Health based on building up software and rulebooks that understood the bizarre world of payer claims processing. In October 2018, Athena's market cap was about $5B, revenue $1.2B.
ISPOR Value in Health Journal: Six Article Set on NGS and Value
Value in Health is the official journal of ISPOR, the international society for pharmacoeconomics and outcomes research. (See their international conference in Barcelona November 10-14, 2018).
The September 2018 issue has a special six-article set on next generation sequencing and clinical value. (Subscription required). See the home page for Value in Health, September 2018, here.
The September 2018 issue has a special six-article set on next generation sequencing and clinical value. (Subscription required). See the home page for Value in Health, September 2018, here.
The articles are headlined by an op ed by Kathryn Phillips PhD, head of the TRANSPERS NIH-funded program at UCSF for translational genomics.
For more on precision medicine in health policy, see also the special issue of Health Affairs, which appeared May 2018.I'll be highlighting some of these publications in a webinar on value in genomics, November 27, here.
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| click to enlarge |
Very Brief Blog: DHealth Conference for SoCalBio - November 9, 2018
SoCal Bio, an LA-focused biotech and medical device association, holds its second annual Digital Health conference on November 9, 2018, in Long Beach. (Last year's first annual conference, held at USC, was outstanding). The theme is medical grade wearables.
The conference website is here and the extensive online agenda is worth checking out.
The conference website is here and the extensive online agenda is worth checking out.
Very Brief Blog: California Clinical Lab Association Meeting; MolDx Speakers
The California Clinical Lab Association annual conference will be November 7-9, 2018, in Costa Mesa, California [Orange County]. See the conference website here. Download the agenda here.
The October-30-version agenda is below; check for updates. Both of the new MolDx medical directors, Dr. Bien-Willner and Dr. Gerrard, are on the agenda for Thursday November 8. They are also speaking the prior day, November 7, in San Diego at the AdvaMed Dx West Coast Summit (here).
On a separate note, November 9 is the SoCalBio digital health 2nd annual conference, to be held in Long Beach; last year's first annual DHealth conference was excellent.
The October-30-version agenda is below; check for updates. Both of the new MolDx medical directors, Dr. Bien-Willner and Dr. Gerrard, are on the agenda for Thursday November 8. They are also speaking the prior day, November 7, in San Diego at the AdvaMed Dx West Coast Summit (here).
On a separate note, November 9 is the SoCalBio digital health 2nd annual conference, to be held in Long Beach; last year's first annual DHealth conference was excellent.
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| October 30 Version (click to enlarge) |
Thursday, October 25, 2018
Very Brief Blog: MolDx Posts Job Opening for Another Medical Director
The MolDx program recently brought on MD-PhD molecular pathologist Gabriel Bien-Willner as medical director (here). As circulated within AMP and elsewhere, MolDx (part of South Carolina BCBS) has posted a position for another medical director who is a pathologist.
BCBS job posting here. I've clipped text below the break.
BCBS job posting here. I've clipped text below the break.
Trump, Azar Propose Lower Drug Payments in US Medicare - Original Documents
In an October 25, 2018, press briefing, President Trump and Secretary of Health Alex Azar proposed for public comment several new programs to lower drug payments in Medicare, such as simply and directly benchmarking Part B prices to an international drug price index.
The CMMI program would initiate new federal contractors who would be paid a fixed (e.g. European) price to acquire drugs in the US and provide them to doctors for Medicare patients. It appears that sales from biopharma to these contract venders at low Euro benchmark prices would be voluntary. (However, biopharma might actually be incented to undershoot the federal price to give the venders margin and drive utilization....) Doctors would be required to collect copays from patients (based on the Euro benchmark price times 20%) and return the copays to the venders. The pilot program would be regionalized, raising the possibility that large health systems might get full prices on one side of a zip code or county line and much lower prices on the other side.
The proposal notes that it builds on prior public comment on the May 2016 Drug Pricing Blueprint and the July 2018 Outpatient Proposed Rule CY2019, which requested input on drug pricing models. E.g. see the Pew Foundation response supporting CAP and other approaches to cutting Medicare prices, as telegraphed in summer rulemaking.
- See New York Times here. Business Insider here. The Hill here. Axios here. MedCity here. Fiscal Times here. "Who Loses Most," at BioPharmaDive, here. Late follow up at Stat, 12/10/18, here.
- See CMS quite detailed press release here.
- See 12-page Federal Register PDF of "advance notice of rulemaking" here.
- This federal document specifically introduces the program as fulling President Donald Trump's vision.
- Public comment will be taken for 60 days.
- Document CMS-5528-ANPRM, RIN 0938-AT91, 83 Fed Reg 54546-61.
- See also the 19-page HHS ASPE report on international drug prices, vis a vis US prices, here and here.
- Update: For a May 2019 Health Affairs article on bringing international prices to Medicare, Yang et al., here.
- Trump speech on Youtube at this link, here [13 min].
- Transcript here.
One feature of the programs will be to create a reference price list, the International Pricing Index Model, IPI, based on a range of other countries. This is not proposed rulemaking; it is a generalistic description of a model that will be posted soon for official comment, and might, at the earliest, lead to CY2020 implementation. Actual rulemaking would likely be extremely complex.
The program will be enacted through the wide-ranging authority of the Center for Innovation (CMMI) to conduct demonstration programs that waive existing Medicare law.* The Obama administration proposed less sweeping changes to drug pricing, via CMMI, which were canceled weeks after the Trump election, though before the inaugural.
For the Drug Pricing on TV regulation, here.
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In his 13-minute comments, Trump thanks Secretary Azar, and called out attendees Seema Verma and Scott Gottlieb. He noted that it "had been decades" since a President came to HHS and noted that Obama never gave a speech there. He referred to the May 2018 Drug Pricing Blueprint and noted the accelerated approvals of more generics at FDA. He also referred to the new Know the Lowest Price act. He noted that Americans are benefiting from the new drugs but other countries have them too at far lower prices. (He did not mention that American companies might choose not to release the drugs elsewhere at too-low prices.)
He noted that for "an eye drug that prevents blindness" Medicare pays $1B but at international rates would pay $187M. He referred to "a cancer drugs that is seven times more expensive" in the US. He noted another part of the new system will be paying doctors a flat rate when delivering expensive drugs (not a price-based supplement). He noted that Part D and Part C/Medicare Advantage premiums are going downward and "this is a word you haven't ever heard" in healthcare. He decried a socialistic health plan in the House and by Dems that would destroy Medicare and Medicare Advantage (presumably the Medicare for All ideas.)
On a separate note, he dropped a comment "we will always protect pre-existing conditions." He summarized by characterizing the work of HHS staff as "brilliant and complex."
For the Drug Pricing on TV regulation, here.
____
In his 13-minute comments, Trump thanks Secretary Azar, and called out attendees Seema Verma and Scott Gottlieb. He noted that it "had been decades" since a President came to HHS and noted that Obama never gave a speech there. He referred to the May 2018 Drug Pricing Blueprint and noted the accelerated approvals of more generics at FDA. He also referred to the new Know the Lowest Price act. He noted that Americans are benefiting from the new drugs but other countries have them too at far lower prices. (He did not mention that American companies might choose not to release the drugs elsewhere at too-low prices.)
He noted that for "an eye drug that prevents blindness" Medicare pays $1B but at international rates would pay $187M. He referred to "a cancer drugs that is seven times more expensive" in the US. He noted another part of the new system will be paying doctors a flat rate when delivering expensive drugs (not a price-based supplement). He noted that Part D and Part C/Medicare Advantage premiums are going downward and "this is a word you haven't ever heard" in healthcare. He decried a socialistic health plan in the House and by Dems that would destroy Medicare and Medicare Advantage (presumably the Medicare for All ideas.)
On a separate note, he dropped a comment "we will always protect pre-existing conditions." He summarized by characterizing the work of HHS staff as "brilliant and complex."
- Senator Kefauver in the 1950s began Senate drug industry hearings because he was appalled at the high and uniform prices charged in his local pharmacy for antibiotics (about $5); these hearings later morphed into the FDA Act of 1963.
The CMMI program would initiate new federal contractors who would be paid a fixed (e.g. European) price to acquire drugs in the US and provide them to doctors for Medicare patients. It appears that sales from biopharma to these contract venders at low Euro benchmark prices would be voluntary. (However, biopharma might actually be incented to undershoot the federal price to give the venders margin and drive utilization....) Doctors would be required to collect copays from patients (based on the Euro benchmark price times 20%) and return the copays to the venders. The pilot program would be regionalized, raising the possibility that large health systems might get full prices on one side of a zip code or county line and much lower prices on the other side.
The proposal notes that it builds on prior public comment on the May 2016 Drug Pricing Blueprint and the July 2018 Outpatient Proposed Rule CY2019, which requested input on drug pricing models. E.g. see the Pew Foundation response supporting CAP and other approaches to cutting Medicare prices, as telegraphed in summer rulemaking.
____
In a separate scenario, earlier this week FDA admnistrator Scott Gottlieb spoke at a Washington symposium and expressed concern over CMS policies that pay only a fraction of the cost of CART drug payments. He noted this could stifle new entrants and leave CMS and the US, ironically, with only monopoly pharma providers.
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ASPE Screen Shot - and Azar tweet -
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| tweet |
The logo for the presentation was "American Patients First."
___
Of related interest, the WSJ recently covered the Arnold Foundation's high multi million dollar investment in various entities and NFP's which aim to reduce high drug prices - here.
For an essay, "Why Does Humira Cost Less in Europe?," here.
For an Endpoints blog about US biosimilars and drug pricing, here.
For a November 2018 update on US 340B policy changes, here.
___
Later, around November 26, CMS posted new proposed rules allowing plans more leverage in Part D pricing management, trade press here. CMS announcement here.
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* Recall that in 2016, Hill Republicans were asserting that CMMI's authorities exceeded the constitution and ought to be canned. Times change. Here.
Wednesday, October 24, 2018
National Webinar November 27: "Genomics Beyond The Hype"
I'm please to be invited to be a co-presenter on November 27 (1 ET, 10 PT) for a webinar, Beyond the Hype: Where Genomics is Having an Impact on Outcomes.
It's cosponsored by Quest. Speakers include Drs. Patrick James and Felicitas Lacbawan of Quest, and myself. The full website and registration enrollment are online here.
It's cosponsored by Quest. Speakers include Drs. Patrick James and Felicitas Lacbawan of Quest, and myself. The full website and registration enrollment are online here.
Monday, October 22, 2018
Very Brief Blog: MolDx Deletes Its "Excluded Test" Spreadsheet (M00047)
The MolDx program has special webpages for "covered tests" and "excluded tests," in addition to those coverage decisions memorialized as LCDs.
For several years, at least, through October 2017, MolDx had an online Excel spreadsheet listing hundreds of "excluded tests." This was their document M00047. The most recently download I have is from October 2017; I wrote about the Excluded Tests policies in detail in January 2015 (my article here, cloud spreadsheet here.)
As of October 2018, MolDx does still have a webpage for an online collection of articles about "excluded tests." Here. However, this page no longer appears to display the excel spreadsheet M00047, which was many of hundreds of entries long.
All of the articles about excluded tests on today's MolDx website refer to articles in the CMS MAC article database, with CMS document numbers (such as "A53457.") No spreadsheets.
The last version of the former spreadsheet that I have on file - 10/2017, "M00047, V15" - has some 1,200 entries naming excluded tests. Some 600 were named examples of Tier 2 codes (within 81400-81408) that were non covered.
For several years, at least, through October 2017, MolDx had an online Excel spreadsheet listing hundreds of "excluded tests." This was their document M00047. The most recently download I have is from October 2017; I wrote about the Excluded Tests policies in detail in January 2015 (my article here, cloud spreadsheet here.)
As of October 2018, MolDx does still have a webpage for an online collection of articles about "excluded tests." Here. However, this page no longer appears to display the excel spreadsheet M00047, which was many of hundreds of entries long.
All of the articles about excluded tests on today's MolDx website refer to articles in the CMS MAC article database, with CMS document numbers (such as "A53457.") No spreadsheets.
The last version of the former spreadsheet that I have on file - 10/2017, "M00047, V15" - has some 1,200 entries naming excluded tests. Some 600 were named examples of Tier 2 codes (within 81400-81408) that were non covered.
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| JPEG of October 2017 file copy of M00047 - no longer displayed by MolDx |
Saturday, October 20, 2018
Very Brief Blog: New Report that Medicare's New Diabetes Prevention Counseling is Underfunded
Last year, CMS finalized rulemaking to create a novel national benefit for diabetes prevention counseling classes for qualified and at-risk patients (e.g. borderline blood sugar or obesity). This is one of the first projects completed by the Medicare Center for Innovation, and although the idea is simple enough, executing it took literally hundreds of pages of rulemaking spread over two years. Enrollment (for a novel class of pre-diabetes education providers) began in April 2018.
A new report suggests the program may be so underfunded as to be hard for the service to actually be delivered.
See a trade journal report at Health Payer Intelligence here, and a peer-reviewed, open-access economics article here. The authors delivered a real-world diabetes prevention program to underserved beneficiaries from 2013 to 2017; real costs averaged $800 per participant, but the current funding level and rules would net a provider only $138 per participant.
Since this is a 2018 program, following the agency's routine data practices, Medicare might not have to release annual national Part B utilization data for the new DPP codes until November 2019, or release provider-specific code use until May 2020.
Virtual DPP?
Medicare declined to allow CDC-accredited DPP providers who use virtual classes and materials to participate in its program.
Likely, that technology may be more cost-effective than the brick and mortar classes described by Ritchie et al. See an article on Virtual DPP here. (Disclosure: I've worked as a consultant for Omada, which probably has the best-validated virtual program in the Medicare-age population.)
This isn't the first negative spin on the program. Early press in Spring 2018 carried headlines like "Diabetes Program Stumbles at Roll-out," here, here.
A new report suggests the program may be so underfunded as to be hard for the service to actually be delivered.
See a trade journal report at Health Payer Intelligence here, and a peer-reviewed, open-access economics article here. The authors delivered a real-world diabetes prevention program to underserved beneficiaries from 2013 to 2017; real costs averaged $800 per participant, but the current funding level and rules would net a provider only $138 per participant.
Since this is a 2018 program, following the agency's routine data practices, Medicare might not have to release annual national Part B utilization data for the new DPP codes until November 2019, or release provider-specific code use until May 2020.
Virtual DPP?
Medicare declined to allow CDC-accredited DPP providers who use virtual classes and materials to participate in its program.
Likely, that technology may be more cost-effective than the brick and mortar classes described by Ritchie et al. See an article on Virtual DPP here. (Disclosure: I've worked as a consultant for Omada, which probably has the best-validated virtual program in the Medicare-age population.)
This isn't the first negative spin on the program. Early press in Spring 2018 carried headlines like "Diabetes Program Stumbles at Roll-out," here, here.
Friday, October 19, 2018
CMS Posts Final Gapfill Codes for CY2019: Whole Genome Raised from $349 to $5031
On Friday evening, October 19, 2018, CMS published the final contractor gapfill pricing, which are effective 1/1/2019. (Proposed prices had been released in early June with comments due in early August).
The 18 codes were placed into the gapfill process last fall; some were codes with no pricing through PAMA and a few were new codes that couldn't be assigned a fall 2017 crosswalk.
Most of the codes being gapfilled were either "PLA" (new rapid) codes, ending in "U" such as 0001U, or administrative MAAA codes (ending in M, such as 0001M). See table below.
Whole Genome Analysis
The biggest price change was for whole genome analysis (81425), sibling/family member analysis (81426), and reanalysis (81427). These rose from a uniform first recommended price of $349 (?!) to $5031, $2709, and $2337, respectively. (Over 20 comments letters were submitted to CMS, if I can summarize, generally portraying the $349 price as ridiculous.)
The whole genome price of $5031 is a little higher than the whole exome price of $4780, as set by market rates under PAMA. Use of these tests is likely to be rare in the Medicare population but a growing literature has documented the usefulness of whole genome in special cases including gravely ill newborns.
How the different MACs priced WGS-related codes is shown in the next table. By my count, 32 MolDx-related CLFS zones proposed $5031 for 81425. Novitas and FCSO had 14 zones, at $4780. NGS MAC had 12 zones at $349. See table:
These are "final gapfill prices" but CMS is "accepting comments" until November 19 at CLFS_Annual_Public_Meeting@cms.hhs.gov . Elsewhere CMS refers to this as an (ill defined) chance to "appeal" the gapfill final amounts. If CMS takes any action on such "appeals" there is not much outside evidence of it other than the final prices on the 2019 CLFS in November would be different than those shown here in the "final gapfill" values. (And note that the November 19 deadline for comment means it is very close to the lockdown of 2019 fee schedules anyway). This is in contrast to an appeal of a final crosswalk value, which kicks the whole code back into the next summer public meeting again.
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Disclosure: I served as a consultant this summer to several entities working to raise the median price from the initial $349 to $5000 or better.
__
See the original CMS spreadsheet at the link early in the blog. I've put a slightly tricked-out Excel with highlighted tabs for short summary views and comments views in the cloud, here.
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MAC rationales for 81425, 81426 were stated to be:
Some contractors based initial recommendations on laboratories with similar test with charges of $349.00. Upon further review, however, several contractors revised their recommendations. Some contractors looked to similar tests on the CLFS, specifically 81415, a Whole Exome Sequencing code, and adjusted the payment rate based on input from several laboratories. Other contractors simply followed public recommendations to use CPT 81415 as a similar test on the CLFS to recommend a payment rate.
MAC rationales for 81427 were stated to be:
Initially, several contractors felt this code represented interpretation only and thus averaged two comparable codes (G0452-26 and 88291). Upon further review, some contractors followed public recommendations to use CPT 81417 as a similar test on the CLFS. Others did not recommend this similar payment rate and instead estimated a professional labor rates for the code.
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The average price of clinical grade WGS was $5225, almost the CMS price for 81425, in a 2018 Harvard study (here).
___
DTC testing on Amazon - for you and maybe your dachshund too...
The 18 codes were placed into the gapfill process last fall; some were codes with no pricing through PAMA and a few were new codes that couldn't be assigned a fall 2017 crosswalk.
- On the CMS CLFS webpage here, see the final "2018 Final Gapfill Determinations."
Most of the codes being gapfilled were either "PLA" (new rapid) codes, ending in "U" such as 0001U, or administrative MAAA codes (ending in M, such as 0001M). See table below.
Whole Genome Analysis
The biggest price change was for whole genome analysis (81425), sibling/family member analysis (81426), and reanalysis (81427). These rose from a uniform first recommended price of $349 (?!) to $5031, $2709, and $2337, respectively. (Over 20 comments letters were submitted to CMS, if I can summarize, generally portraying the $349 price as ridiculous.)
The whole genome price of $5031 is a little higher than the whole exome price of $4780, as set by market rates under PAMA. Use of these tests is likely to be rare in the Medicare population but a growing literature has documented the usefulness of whole genome in special cases including gravely ill newborns.
How the different MACs priced WGS-related codes is shown in the next table. By my count, 32 MolDx-related CLFS zones proposed $5031 for 81425. Novitas and FCSO had 14 zones, at $4780. NGS MAC had 12 zones at $349. See table:
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| click to enlarge |
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Disclosure: I served as a consultant this summer to several entities working to raise the median price from the initial $349 to $5000 or better.
See the original CMS spreadsheet at the link early in the blog. I've put a slightly tricked-out Excel with highlighted tabs for short summary views and comments views in the cloud, here.
__
MAC rationales for 81425, 81426 were stated to be:
Some contractors based initial recommendations on laboratories with similar test with charges of $349.00. Upon further review, however, several contractors revised their recommendations. Some contractors looked to similar tests on the CLFS, specifically 81415, a Whole Exome Sequencing code, and adjusted the payment rate based on input from several laboratories. Other contractors simply followed public recommendations to use CPT 81415 as a similar test on the CLFS to recommend a payment rate.
Initially, several contractors felt this code represented interpretation only and thus averaged two comparable codes (G0452-26 and 88291). Upon further review, some contractors followed public recommendations to use CPT 81417 as a similar test on the CLFS. Others did not recommend this similar payment rate and instead estimated a professional labor rates for the code.
The average price of clinical grade WGS was $5225, almost the CMS price for 81425, in a 2018 Harvard study (here).
___
DTC testing on Amazon - for you and maybe your dachshund too...
Very Very Brief Blog: The Rise and Fall of a Valuation Bubble for Q-IHC, FISH
This blog, posted on October 19, 2018, reflected data in Summer 2018 CMS proposed rulemaking, as well as data collated and posted by CAP. The data proposed a marked increase in some CPT codes such as 88360, 88365 and others. This was due to a Medicare-proposed spike in supply payments.
In the final rulemaking, November 1, it looks like most of the "bubble" has been unwound. I haven't done a full analysis, but one screen shot from CMS final rule carries most of the message. For example, SL493 Estrogen Receptor Cocktail, spiked from $14 to $322 and then final downward to $16. Another reagent, SL497, DNA Probe Cocktail, spiked from $8 to $420 and back to $8. CMS table here:
The original October 19 blog is left as-is below, describing what CMS proposed before we knew what CMS would finalize.
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##
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ORIGINAL BLOG - OCTOBER 19
This past summer, CMS announced a massive revamping of capital equipment and supply inputs used to value Part B services in relative value units (RVUs). This follows 2018 law in PAMA Part 218, allowing CMS to commission or require a wide range of information resources to value capital equipment and supplies. The massive new pricing system was announced fairly briefly in July 2018 proposed rulemaking, but engendered comments by many groups.
College of American Pathologists published a chart showing that some selected ISH and FISH codes are proposed to rise sharply in price between CY2018 and CY2019:
For example, the payment for 88360 rises from $136 to $289 (+112%) and the technical component of ISH, 88365, rises from $137 to $304.
Why?
RVU prices are based on incredibly complex "bottom up pricing" that includes line items for minutes of physician time, minutes of staff time, minutes of use of capital equipment, and all supplies large and small (e.g. a surgical tool one time use supply might be $800 while an alcohol swab might be one-half penny).
While it's not elegant Excel, below I show a snippet of the supply inputs for 88360. This previously used 2 units of estrogen receptor monoclonal antibody SL493 at about 2x14 ($28.94), and now uses two units at a new unit price of $91.45, or $192.41. Just a few of the supplies used to total $49.91, but now total $206.33, or about +$156.
(Note that there is some significant price compression before these item prices are converted to CMS payment RVUs. Through complex math and rules, the prices are stored in dollars, converted to RVUs, and then multiplied by about $30 per RVU to convert back into dollars).
For 88365, similarly, EBER DNA Cocktail Probe rises from $13.71 to $178.31, along with some other increases.
In 2017 data, code 88360 had about 110,000 uses, so at +$150 per payment, total payments would rise by about $16M.
With apologies they are very simplistic, I store the Excel worksheets I used in the cloud here.
In the final rulemaking, November 1, it looks like most of the "bubble" has been unwound. I haven't done a full analysis, but one screen shot from CMS final rule carries most of the message. For example, SL493 Estrogen Receptor Cocktail, spiked from $14 to $322 and then final downward to $16. Another reagent, SL497, DNA Probe Cocktail, spiked from $8 to $420 and back to $8. CMS table here:
The original October 19 blog is left as-is below, describing what CMS proposed before we knew what CMS would finalize.
##
##
##
ORIGINAL BLOG - OCTOBER 19
This past summer, CMS announced a massive revamping of capital equipment and supply inputs used to value Part B services in relative value units (RVUs). This follows 2018 law in PAMA Part 218, allowing CMS to commission or require a wide range of information resources to value capital equipment and supplies. The massive new pricing system was announced fairly briefly in July 2018 proposed rulemaking, but engendered comments by many groups.
College of American Pathologists published a chart showing that some selected ISH and FISH codes are proposed to rise sharply in price between CY2018 and CY2019:
For example, the payment for 88360 rises from $136 to $289 (+112%) and the technical component of ISH, 88365, rises from $137 to $304.
Why?
RVU prices are based on incredibly complex "bottom up pricing" that includes line items for minutes of physician time, minutes of staff time, minutes of use of capital equipment, and all supplies large and small (e.g. a surgical tool one time use supply might be $800 while an alcohol swab might be one-half penny).
While it's not elegant Excel, below I show a snippet of the supply inputs for 88360. This previously used 2 units of estrogen receptor monoclonal antibody SL493 at about 2x14 ($28.94), and now uses two units at a new unit price of $91.45, or $192.41. Just a few of the supplies used to total $49.91, but now total $206.33, or about +$156.
(Note that there is some significant price compression before these item prices are converted to CMS payment RVUs. Through complex math and rules, the prices are stored in dollars, converted to RVUs, and then multiplied by about $30 per RVU to convert back into dollars).
For 88365, similarly, EBER DNA Cocktail Probe rises from $13.71 to $178.31, along with some other increases.
In 2017 data, code 88360 had about 110,000 uses, so at +$150 per payment, total payments would rise by about $16M.
With apologies they are very simplistic, I store the Excel worksheets I used in the cloud here.
Very Brief Blog: New Medical Director at MolDx Program, Dr. Bien-Willner
This past summer, MolDx positioned a new medical director, Dr. Paul Gerrard (blog here). Dr. Gerrard continues to work on MolDx issues, and MolDx has added a full time medical director, a molecular pathologist, Dr. Gabriel Bien-Willner.
Dr. Bien-Willner's Linked In page is here. He started as MolDx medical director in September, 2018. He became chairman of the molecular pathology practice, Bien Willner Physician Group (BWPG), in 2015. He served as Executive Medical Director for Molecular Health GmBH from June 2014-May 2018.
Bien-Willner holds an MD-PhD from Baylor and completed his residency and molecular genetic pathology fellowship at Washington University.
See an interesting ten-page interview with Dr. Bien-Willner, conducted in November 2016, at American Journal of Managed Care, here.
Dr. Bien-Willner's Linked In page is here. He started as MolDx medical director in September, 2018. He became chairman of the molecular pathology practice, Bien Willner Physician Group (BWPG), in 2015. He served as Executive Medical Director for Molecular Health GmBH from June 2014-May 2018.
Bien-Willner holds an MD-PhD from Baylor and completed his residency and molecular genetic pathology fellowship at Washington University.
See an interesting ten-page interview with Dr. Bien-Willner, conducted in November 2016, at American Journal of Managed Care, here.
Very Brief Blog: MolDx Retires LCD for LDT Lung Cancer Tests; "Obviated by NCD"
On September 24, 2018, MolDx posted a notice that it was retiring its LCD for gene panel testing in non small cell lung cancer, effective 10/1/2018. A link to the retired LCD is here. Several key screen shots are listed below.
In March 2018, CMS released an NCD covering FDA-approved gene panel tests (NGS tests) in advanced cancer. However, MACs are allowed to write their own LCDs for LDT-type tests that are not FDA approved, if they choose to.
Based on publicly available announcements, Foundation Medicine's Foundation One LDT test was covered under this Palmetto LCD when the LDT test was run at Foundation's North Carolina center. The non-FDA FMI LDT test was discontinued on September 28, 2018, according to an FMI announcement.
See screen shots below.
In March 2018, CMS released an NCD covering FDA-approved gene panel tests (NGS tests) in advanced cancer. However, MACs are allowed to write their own LCDs for LDT-type tests that are not FDA approved, if they choose to.
Based on publicly available announcements, Foundation Medicine's Foundation One LDT test was covered under this Palmetto LCD when the LDT test was run at Foundation's North Carolina center. The non-FDA FMI LDT test was discontinued on September 28, 2018, according to an FMI announcement.
See screen shots below.
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| Rationale: Need for LCD obviated by NCD. |
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