Brief Blog: S. 794: Legislation for LCD Process Clarity

LCD Legislation Re-Introduced in New Congress

"Local Coverage Determinations Clarity Act of 2017"

In both 2016 and 2017, legislation supported by AdvaMed has been introduced which would improve the clarity and independence of MAC LCD policymaking.

For the text of 2017's S.794 bill, see here.  For a 2017 press release, here.  For 2016 trade press, here.

Introduction was by Sen. Isakson of Georgia.  Full text of the legislation is also cut/pasted below the break.  The bill would largely implement in statute guidelines that are already on the CMS website, but would carry "force of law."  There are currently 8 MAC companies making policies for 12 different CMS Medicare geographies or jurisdictions (here).

S. 794 requires:

• Publish LCD proposal, PLUS a written rational and description of all evidence relied upon.
• Within 60 days, convene a public meeting, receive public comments, and use an expert panel (as now exists; the "CAC" panel).
• Post a record of meeting minutes within 14 days.
• Provide for written comment as well.
• Provide a response to all issues raised and finalize the LCD, adding descriptions of any additional qualifying evidence.
• Effective date "not less than" 30 days.
• A MAC may not finalize an LCD that applies outside its geographic area, and if importing an LCD, the new MAC must independently "evaluate and consider the qualifying evidence."
• A specific CMS ombudsman for LCD disputes is to be appointed.

The bill also makes some small modifications to the existing LCD definition and reconsideration process.  For example, during reconsideration, the MAC must consider if it "did not apply or inaccurately applied" the relevant evidence.

After the break, I walk through the bullet points with comments in regard to current policy, and then provide a cut/paste of the legislation.

Note that the changes in S.794 are much larger than a few sentences about LCD process clarity that have already appeared as Section 4010 of the 21st Century Cures Act.   

Those sections are effective as law in June 2017, and required that:  (1) Final LCDs be posted at least 45 days prior to the effective date, (2) Trackback to the proposal LCD date and original proposed text, (3) Provide discussion of all comments received and (4) rationale for LCD decision.  See pp. 408-409 of 21CC in the cloud, here.

Brief Blog: CMS MACs by Jurisdiction and by Contractor

CMS provides a website with detailed information on its Medicare Administrative Contractors (MACs) for traditional fee for service Parts A and B.   The website is here.

I recently needed to consolidate the information for a project, and provide the Excel spreadsheet in the cloud, here.  Dates and figures are current as of April 2017.

A snapshot summary is below - click to enlarge.   There are four numbered MACs (the old system), and eight lettered MACs, so there are twelve contracts.  However, four MACs (Novitas, NGS, Noridian, WPS) hold two contracts, so there are only eight MAC companies.

While I do not understand the full corporate structures, I believe that two pairs of MACs have some type of higher level joint ownership or umbrella corporation (Palmetto, CGS; and Novitas, FCSO).*  This would leave six MACs or sets of MACs that are unrelated.

Together, four multi-jurisdiction MACs, Novitas (24%), NGS (20%), Noridian (15%) and WPS (11%) have about 65% of Medicare beneficiaries.  A CMS MAC Map is here.

LCD Legislation Re-Introduced in New Congress

In both 2016 and 2017, legislation supported by AdvaMed has been introduced which would improve the clarity and independence of MAC LCD policymaking.  For the text of 2017's S.794 bill, see here.  For a 2017 press release, here.  For 2016 trade press, here.  For more detail, my blog here.

MolDX States & MACs

MolDX is a multi-MAC policy system for genomic test LCDs and pricing.   There are six MolDX jurisdictions (JE, JF, J5, J8, JM, J15) under four different MACs (Noridian, WPS, Palmetto, CGS.)   Therefore, MolDX spans 24 states and 41% of US claims (16.4M of 37M Medicare beneficiaries).  (Click to enlarge).

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*  E.g. Celerian Group "is a consortium of companies" including MAC CGS and MAC Palmetto GBA, here.  Similarly, in a 2012 press release, "Diversified Service Options, a wholly owned subsidiary of Florida BCBS, acquired MAC [Novitas Solutions] from its parent company..." - here.

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For economics nerds, the MACs have a Herfindahl or oligopoly index of 0.15.  The Herfindahl  index varies from 0 to 1, with 1 representing monopoly.  It is mostly driven by at least one company having a very large share (e.g. 1 company has 70% or 80%).  (Calculated by summing the squares of each participant's market share.)    Wikipedia.

Brief Blog: Gene Test Management for Payers and Others: ECRI-GENE

I recently gave a talk in Berlin and talked about US payer reactions over the last four years to what they perceived, fairly or not, as a "Versicherungsblitzkrieg" (Insurance Blitzkrieg) coming from rapidly growing pharmacogenetic and cardiac testing labs.   (Several such labs fell equally rapidly into bankruptcy amidst commerical payer, DOJ, or CMS actions).

Companies developing to help payers manage genomic test policies include BeaconLBS (covered frequently by Dark Report); the former NextGxDx, now Concert Genetics; and eviCore, which developed for other types of benefit management, like imaging.  To my knowledge, BCBS Evidence Street is another major HTA, but focuses on providing the evidence assessments* rather than outsourceable payer claims handling functions.

Add a specialized service at nonprofit HTA firm, ECRI, called ECRIgene.  Website here.  It's not brand new; see a July 2016 press release, here.

Their homepage states:

Think of ECRIgene as your genetic test control center with experts constantly monitoring activities in this rapidly evolving universe. Our  analysts, nurses, clinicians, and medical librarians research, analyze, and synthesize the key features and evidence on each relevant test using the GRADE-based evidence-rating system. These experts are dedicated to researching your custom requests and answering your specific questions. 

We can imagine sales reps from large and small labs lined up to talk to a clinician; and sales reps from Beacon, Concert, eviCore, and ECRIGene lined up to talk to the patient's health plan. (For a few years, I've used a slide that refers to the growing HTA medical-industrial complex.)

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It's been reported that at some point in 2017, BCBS Evidence Street and MolDX will use a common portal, here.

Foundation Publishes 100,000 Patient Study on "Total Mutational Burden" (TMB)

Very early on, before sequencing 200 or more genes in tumors was really commercialized, it occurred to me that from a business strategy perspective you would need to come up with a clinical reason for assessing 200+ genes.   Even today there are a very finite number of effective drugs for targeted mutations (EGFR, ALK, BRAF, etc), not anywhere near 200-500.   Adding referral to clinical trials will have limited impact; although tallies count "hundreds, or even thousands" of oncology clinical trials, they are likely counting things like phase I drug dosing arms.

Two approaches to making use of all 500 genes are being discussed.

• One use would be to make very complex in silico models of tumor cell biology.  Companies like Cellworks and Darwin Health are exploring this.  I think of this as a growing industry for "digital genomics."  
• Another use is finding something about those 500 sequenced genes that can be assessed and applied clinically -- but requiring the exponential jump in gene data and unrelated to the small number of approved drug-gene pairings.  
• An approach here is Total Mutational Burden (TMB), and Foundation Medicine has just published a large new study.

Note that while either or both of these areas may prove to be clinically effective and important, you would come across these kinds of ideas, just by working backwards, Sherlock Holmes-style, from assuming you already have built the 500- or 1000-gene test and want to reverse-engineer applications for it.  As an if-then statement;  if one of these ideas proves important, then the market for 500 gene tests would rise while not depending on the trickle of a few new individual FDA-approved gene-drug pairs.

Total mutational burden is being cited as a potential biomarker for the effectiveness of immuno-oncology checkpoint drugs.   Chalmers et al. report the results from 100,000 patient studies conducted in a wide range of tumors from the FMI archives (Genome Medicine, Open Access, here.) FMI finds that:

• They confirmed the previous understanding that lung cancer and melanoma are most likely to have rampant mutations, but found that rampant mutations also occurred at lower rates in many cancers.
• You get most of the information for 0.5MB DNA; an exome confirms the high or low mutation burden you already low, whereas accurate assessment falls off below 0.5MB.
• PMS2 mutations tend to be associated with rampant mutations, as is aging.

One proposed use of this type of data is predicting immunotherapy outcomes with a biomarker (TMB) orthogonal to markers like PDL1.   Last December, MolDX providing coverage of comprehensive genomic profiling in several additional cancer types (colon, melanoma, ovarian) based in part on the contributory value of TMB to therapy choices.

The authors also used Cancer Genome Atlas (TCGA) data.  Coverage at Genomeweb, here.

Update May 9:  FMI emphasized the growing role and value of TMB in its May 9 investor call, here.
Update October 6:   For a UCSD paper on TMB clinical impact (Khagi et al.) here.
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For AACR news with a re-analysis of Opdivo data using TMB, BiopharmaDive, here.

For an earlier FMI paper on 63,220 tumors, see Hartmaier et al., Genome Med 9:16, February 2017, here.

Brief Blog: DC Conference on Tumor Heterogeneity, May 11-13, 2017

The classic paper in the US literature on tumor heterogeneity remains Gerlinger et al, in NEJM 2012 (here.)   On May 11-13, there will be a (free) international conference in Washington DC on the topic.  The conference is sponsored by the Menarini Foundation, the University of Hamburg, and MD Anderson.

See the website here and here the PDF brochure here.  It's at the "Congress Center of the Old Post Office Building," which I believe is now Trump International Hotel.

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New papers appear regulary across a range of cancers, e.g. new work by Morissy on medulloblastoma heterogeneity in Nature Genetics, April 2017, here.

Brief Blog: CMS Publishes CY2018 Inpatient Rulemaking; Six New Technologies Seek Add On Payments

CMS has released its Inpatient Proposed Rule for FY2018.

The typescript version is online here (1832 pp).
On April 28, the typeset Federal Register version will appear here.
The CMS press release is here.

Update: Final Rule appears in Federal Register, April 14, 2017, here.

New Technology in Brief Review

In addition to the annual rejuggling of some DRG codes, an area of recurring interest is the "new" New Technology applications - beginning on page 349 of the current public review version.  CMS received 9 applications, of which 3 were withdrawn before publication.   The remaining six new technologies for add-on payments are:

1. ZINPLAVA (bezlotoxumab)
2. Edwards INTUITY ELITE Valve and Liva Nova PERCEVAL Valve
3. STELARA (ustekinumab)
4. KTE-C19 / Axicabtagene ciloleucel
5. VYXEOS (cytarabine/daunorubicin liposomes)
6. GammaTile

Drugs must be costly enough to substantially exceed the inpatient DRG for the conditions where they will be used, the same standard as for devices.   The products must be "literally new" (meeting carefully defined dates and rules) as well as technologically new, and must have have clinically impactful new benefits, and it must also fail to be "substantially similar" to existing therapies.  

Qualifying new technologies earn hospitals a bonus to each DRG for which the product qualifies, for 2-3 years.

Brief summaries of each product below the break.

ACLA Generally Supportive of Statutory FDA Reform for CLIA Labs and IVDs

On March 21, Dr. Larry Bucshon (R-IN) and Diana DeGette (D-CO) released a discussion draft of the Diagnostic Accuracy and Innovation Act (DAIA), along with summary documents.  In general, this is built on the Diagnostic Test Working Group (DTWG) approach circulated in the previous session of Congress.  ACLA has come out as generally supportive.  Details follow.

Hill Lab Proposal Released in Late March

An initial press release for the legislation is here, with a 2-page summary here, a 5-page summary here. and the whole 215-page statutory proposal here.

ACLA Generally Supportive in Early April

On April 7, ACLA issued a generally favorable press release in support, here, also releasing ACLA's detailed letter to the Hill, here (should open in window) or here (should open in Google docs) or here.

Get all six documents in one cloud zip file here.

In March, ADVAMED initially released a rapid, generally favorable short press release, here.  Similarly, Labcorp, here.  For an initial summary at RAPS, here, and for early coverage at Genomeweb, here.   For the AMP 5-page letter on DAIA, here.

Scott Gottlieb Senate Testimony; Unique Transcript HERE

On Wednesday, April 5, Scott Gottlieb testified before the Senate HELP committee for two and a half hours.

For a unique unofficial transcript of the hearing: click HERE. 

The Senate website is here.   (Click on "Open in New Window" for video).

Gottlieb's 5-page prepared statement is here.

Video also archived at CSPAN, here.

The Senate vote on Gottlieb's confirmation is scheduled for April 26, here.

Open access coverage at:

• Xconomy, here.
• Healthcare IT News, here.
• BioPharma Dive, here.
• The Hill, here.
• Endpoints, here.
• Health Affairs, here.
• Heritage Foundation "thumbs up," here.
• Endpoints also excerpted and published later responses from Gottlieb to the committee, here.

CMS Extends Deadline to Submit PAMA Pricing by Two Months (May 30)

https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ClinicalLabFeeSched/Downloads/2017-March-Announcement.pdf

Note that technically, CMS is not "extending the deadline" but rather saying they will "not enforce late penalties" except for submissions that arrive after May 30.

Subject: 

60-Day Enforcement Discretion Period Announced for Laboratory Data Reporting

CMS Announces 60-Day Period of Enforcement Discretion for 

Reporting Applicable Information Under the 

Medicare Clinical Laboratory Fee Schedule

Today, the Centers for Medicare & Medicaid Services’ Center for Medicare (CM) announced that it will exercise enforcement discretion until May 30, 2017, with respect to the data reporting period for reporting applicable information under the Medicare Clinical Laboratory Fee Schedule (CLFS) and the application of the Secretary’s potential assessment of civil monetary penalties (CMPs) for failure to report applicable information. This enforcement discretion applies to entities that are subject to the data reporting requirements adopted in the Medicare Clinical Diagnostic Laboratory Tests Payment System final rule published on June 23, 2016 (81 FR 41036).

Industry feedback suggests that many reporting entities will not be able to submit a complete set of applicable information to CMS by the March 31, 2017 deadline, and that such entities require additional time to review collected data, address any issues identified during such review, and compile the data into CMS’s required reporting format. This 60-day enforcement discretion period is the maximum amount of time CMS can permit to still have sufficient time to calculate the CLFS payment rates scheduled to go into effect on January 1, 2018.

This enforcement discretion period does not prevent reporting entities prepared to report applicable information from doing so before May 30, 2017. CMS is committed to the successful implementation of the new private payor rate-based CLFS and looks forward to working with the laboratory industry to ensure accurate payment rates. CMS will continue to closely monitor this process and provide guidance as necessary.

  

Head of FDA: Scott Gottlieb's Senate Hearing Set for April 5, 2017

Dr. Scott Gottlieb, the administration's nominee to head the FDA, has been scheduled for Senate hearings on April 5.

Media coverage has focused on Gottlieb's extensive industry consultations and ties during the 8 years since he served in the Bush administration.  Current news articles refer to a 41-page federal ethics filing.   For more details see:

• RollCall, here.
• New York Times, here. 
• WSJ, here.
• Fortune, here.
• Reuters, here.  
• Bloomberg, here.
• Endpoints, here.
• CMS "Sunshine" Open Payments, here.

In 2006, Gottlieb became a Hodgkin's lymphoma survivor.  Observer.com cites Gottlieb's nomination as "a big win for science" (here),   Global Healthy Living Foundation endorses him (here) as does Patients Rising (here) and DrugWonks (here).  Some other sources praise faintly ("To his credit, Gottlieb is not certifiably crazy...;" MedPageToday, here.)  One of Gottlieb's major position pieces, on changing the FDA's culture, appeared in National Journal in 2012 (open access, here.)

Per the NYT, Gottlieb's financials from January 2016 to February 2017 included $1.8M from investment firm T.R. Winston, and additional compensation from venture capital firm NEA, direct pharma consulting, and positions on boards.  His position as a scholar at American Enterprise Institute is also compensated.   Gottlieb is a graduate of Mt. Sinai Medical School and its internal medicine residency, maintains a Connecticut medical license, and has often worked weekend shifts at a hospital there while maintaining other positions such as a senior policy position at FDA during the Bush 43 administration.   In 2016, Gottlieb donated to support Congressman Ben Sasse, who was one of the most vocal opponents of the Trump candidacy (US News, here.)

National Academy Releases: "Evidence Framework for Genetic Testing"

On March 27, 2017, the National Academies (of Science, Engineering, Medicine) released a 149-page ebook on "Evidence Framework for Genetic Testing."  The federal consensus report  was requested by the Department of Defense Office of Health Affairs.  Download the free ebook here.

My 2014 coauthor Felix Frueh and I were surprised and pleased that an evidence framework we published was cited as one relevant example among six or seven approaches to assessing genetic tests.

At the time, Frueh and I were dissatisfied that the conventional framework of "analytical validity, clinical validity, clinical utility" - while "true" - lacked much guidance for resolving disputes.   We suggested that dividing analysis into six questions was a happy medium - one or two questions is not enough ("Does the test have clinical utility?") while a list of twenty to forty questions was not really manageable.   The six questions, developed entirely by Frueh, were:

1. Who should be tested and under what circumstances (e.g. population, scenario)?
2. What does the test tell us, that we did not know without it?
3. Does the outcome change in a way we find value in?  
4. Can we act on the information provided by the test?  (E.g., ideally)
5. Will we act on the information provided by the test?  (E.g. decision impact studies)
6. If the test is employed, is it affordable?

In my experience, at least at the time, a successful test like Oncotype DX allows fairly straightforward answers to all six questions, whereas a generally unsucessful test (with payers) like beta-amyloid PET tracers, was hard to answer for nearly any of the six questions.   Perhaps understanding the test pretty well and then taking five minutes to jot down freehand answers to the six questions would be a good predictor of payer success or failure.   

We noted that tests have many ways in which they can represent improvements (more accurate, faster, providing results that were unknowable before) and that since tests map to such broad health scenarios, the range of relevant health outcomes is also broad (whether survival, pain, shorter hospital stay, etc.)   We believed that if payers and lab developers communicated on the various axes, there would be fewer situations where the payer can do no more than state vaguely "there is not enough evidence" and where the lab complains equally vaguely that "payer standards are too high."   

Frueh-Quinn was published here.

Brief Blog: CMS Rolls Out CGM Coverage; Window into Numbingly Complex Policies

In the summer of 2016, CMS began losing administrator judge cases when it tried to defend its poorly-enunciated policy that continuous glucose monitors were not a medical product  category eligible for Medicare payment.

In January 2017, CMS released a lengthy, legalistic ruling reversing its position.

On March 23, 2017, CMS DME MACs released a provisional policy that describes actual coverage of CGM through claims processing.

Details after the break.

Brief Blog: ACLA asks CMS to Delay PAMA and Expand Hospital Lab Reporting Too

Last week, ACLA held its annual meeting in Washington.  ACLA has formally asked CMS to delay PAMA for a year - and not only delay it, but re-write the rules on the scope of labs which will be obligated to report.   A CMS administrator made comments suggesting that CMS was considering the possibility of a PAMA delay.

• See open-access coverage at Dark Daily (here). 
• See also a flurry of several press releases in recent days on the ACLA news website, here.
• Subscription coverage at Genomeweb (here).

Senior CMS administrator Carol Blackford, head of all outpatient services for Medicare, spoke at the conference.  According to the news reports, Blackford publicly acknowledged some difficulties in computer processes supporting PAMA data submission, such as periods when the systems have been down.  Overall, data submission so far is less than anticipated by CMS.   The current deadline for data submission is Friday March 31, and failure to submit carries substantial penalties.

CMS Has Difficulty Handling 81162 Claims

Blackford's comments included the fact that "files were rejected based on a valid HCPCS code 81162."   81162 is one of several confusingly priced CPT codes related to BRCA testing (here).  

ADLT Instructions: In the Pipeline

Blackford also noted that while no instructions for applying for Advanced Diagnostic Laboratory Test (ADLT) codes have been provided, a submission form has been created by now, and is being reviewed by general counsel at CMS before release.  ADLT codes received privileged coding and pricing processes under PAMA.

OIG Reports from September 2016

Genomeweb's article pointed me to two September 2016 OIG reports that relate to PAMA changes; I had missed these.  OIG home page for the articles, here.   OIG issued one report (16-00040) on 2015 baseline CLFS payments, here, and a second report on "CMS Progress in Implementing PAMA (16-00100), here.   ReedSmith summarized the two OIG reports last October, here.

Brief Blog: New Term, Narcissome (Genomeweb)

On March 28, 2017, Genomeweb's Julia Karow runs an article on discussion of elective exome or whole genome screening, a topic of discussion at American College of American Genetics (ACMG) last week.  New term:  "Narcissome."  Subscription article here.

Separately, in a meeting last week, I heard a reference to the "economicsome," the payment system for advanced lab tests.

NEW YORK (GenomeWeb) – Exome and whole-genome sequencing have been firmly established as diagnostic tools for rare genetic diseases that can pinpoint molecular causes missed by more targeted tests. More recently, though, several labs have started to move genome-scale sequencing into preventive medicine, with the goal to detect increased disease risks and predict atypical drug responses in seemingly healthy individuals.

At the American College of Medical Genetics and Genomics annual meeting in Phoenix, Arizona, last week, representatives from Harvard Medical School, Illumina, Baylor College of Medicine, the HudsonAlpha Institute for Biotechnology, and the National Human Genome Research Institute talked about their experience with genomic tests catering to individuals that neither have cancer nor a rare inherited disorder, variedly referred to as "genome screens," "elective genomes," or >>> "narcissomes." In addition, several commercial labs spoke about recently launched or planned genomic tests for so-called healthy adults at the conference, including WuXi NextCode, Ambry Genetics, and Invitae.

How To Quickly Explain Medicare BRCA Pricing Policy to Your Sixth Grader

My kids are in high school, but you may need to explain Medicare BRCA pricing policy to your sixth grader, when they are learning bar charts.

Medicare currently pays for BRCA genetic testing services at any of four different price levels, depending on coding choices and the state where the lab is [click to enlarge]:

In 25 states, the MolDX program lists 81433 as a nonpayable code, so the $931 cap applies for panel testing in those states.  I use the MolDX pricing in the next two charts.

Here's a bar chart where the price axis is normal, and the work of genes tested is unnaturally expanded or compressed (a couple genes is very tall and a dozen genes is very tiny):

Here's what it looks like if you set the bar charts to show the laboratory work -- more genes makes taller bars than a couple genes -- this will make the Medicare price axis turn UPSIDE DOWN:

Based on 2015 claims data, Medicare paid well over $50M for BRCA testing services.  If the MolDX price policy were applied with consistency, Medicare would have paid only $18M - saving over $30M per year or $300M over ten years.  

Was Implementation of Panel Pricing Policy Frozen by Executive Order?

If CMS was planning to implement its long-standing panel pricing policy for genetic testing 1Q2017, it may have been derailed by the executive order to freeze federal agency rulemaking and policymaking.

EXTRA CREDIT QUESTIONS

In August 2016, CPT Assistant, the AMA's correct coding resource, fielded a question on what to do with multiples of genetic tests that didn't meet a gene panel code.   AMA responded that Tier 1 codes should be stacked, Tier 2 codes used in multiples as necessary, and additional services represented by an unlisted code (81479).

Let's say a lab does a panel of 9 or 10 genes, including BRCA 1 & 2, so the lab is performing a panel that falls short of the AMA CPT panel definition for 81432 ($931).   And let's assume the 7 genes after BRCA 1 & 2 are on fee schedules at $400 each.

Then you get the following charts, with the hypothetical 9-gene stack coding paying about $4800 - and this is still less work than the 14-gene panel which would pay only $931.   In some places, without special manual edits, CMS or other payers' computers might autopay the price in the left bar.

We can also map this approach onto the format with a reverse-price axis on the left, running the payment from about $5000 (for nine genes at far left) to $2500-2700 for two genes and down to only $931 for 14 genes (at far right).  By adding an option to code for genes just short of the panel definition, and by not applying the panel pricing rule, the price access anomaly becomes even more grotesque: