Noted Life Sciences Investor Brook Byers Gives Stanford's Annual Fogarty Lecture

On October 21, 2019, a leading Silicon Valley life sciences investor, Brook Byers, gave the 21st annual Fogarty Lecture at the Biodesign Center at Stanford.  The talk streams online at YouTube.

• One-hour talk at YouTube, here.
• Byers' page at the Kleiner Perkins Caufield Byers website, here.
• Wikipedia here.  Lists the long line of top-tier companies where Byers has been a board member.

Stanford (Stanford-Byers) Biodesign center here.  There's also a Byers Hall at UCSF.
Fogarty Institute for Innovation here. (Dr. Fogarty at Wikipedia, here.)

Byers highlights four influential books, John Doerr's Measure What Matters, Bill Campbell's Trillion Dollar Coach, Thomas Byers et al. Technology Ventures, and the Stanford Biodesign textbook, "Biodesign," by Paul Yock and coauthors.

Companies highlighted in his talk include Genentech, IDEC Pharmaceuticals, Oculeve, Optimedica, CareDx, and Verana. 

Vegas Conference Offers Who's Who of Trump Administration Health Leaders

I was skimming trade journal headlines and the annual HLTH (health innovation) conference in Las Vegas has posted a who's who of health policy leaders on its agenda.

The conference is October 27-30, 2019, at the MGM Grand in Las Vegas.

The agenda right now includes:

• Seema Verma, head of CMS
• Amy Abernethy, deputy director of FDA
• Joe Grogan, head of National Policy Council
• Eric Hargan, HHS Deputy Secretary
• Tomas Philipson, Chairman of Council of Economic Advisors
• Adam Boehler, until very recently head of Center for Innovation at CMS

Also on board is Sen. Michael Bennet (D-CO), a presidential candidate.  (He didn't make the cut for this week's Dem debate, though).

See:  Trade press at MedCity News here.   Conference website here.  Registration is $2600.

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If you get bored at the conference, there are two WeWork locations in Las Vegas.

Very Brief Blog: Myriad MyPath Melanoma Is the Newest ADLT

Myriad Test Is the Sixth ADLT

While the ADLT process for new lab test pricing has been in place for several years, only a handful of tests have been granted ADLT payment status.  This list now totals six tests, with the addition of the Myriad myPath Melanoma test in September 2019, "initial period" pricing running from October 1, 2019 to June 30, 2020.

Two Types of ADLTs

ADLT is a special annually revised payment status for tests that are "sole source" tests (not IVD kits) which must be either (A) MAAA type tests covered by Medicare, or (B) sole source lab tests with 510(k) approval.   Five of the six ADLTs are MAAA ADLTs; only one is an FDA-pathway ADLT.  The abbreviation stands for Advanced Diagnostic Laboratory Tests.

ADLTs Usually Have PLA Codes

Of the six ADLT tests, 4 are represented by PLA codes ("U codes"), one has a Category I code (81538, Biodesix Veristrat test), and one has a TBD code (Castle DecisionDx-Melanoma). 

ADLTs usually don't go through the gapfill/crosswalk process, as they are priced for the first 9 months at list price and thereafter at an annually-reset market price.  However, an ADLT can qualify as an ADLT late in its life cycle, when it already has a code and CLFS price.  In that case, I believe the annual mark-to-market pricing policy starts, but there is no initial "list price" phase.

Seeing ADLT Prices

On the approved ADLT spreadsheet, CMS lists only the "New ADLT Initial Period" price (the list price) and not the later, annually reset price which appears on the Clinical Laboratory Fee Schedule on a calendar year basis.   ADLT prices range from $1950 (Myriad myPath Melanoma) to $7193 (Castle DecisionDx Melanoma). 

See screenshot below (click to enlarge).

click to enlarge

Where To Learn More

See the ADLT home page here.   It includes complicated directions about how to apply for ADLT status and details about the ADLT rules. 

The PDF showing current ADLTs (as clipped above) is here.

Very Brief Blog: FDA Releases Suite of Digital Guidances, including Clinical Decision Support

In late September 2019, FDA released a suite of guidance documents aimed to encourage the development of digital health tools and to continually modernize the agency's approach.

They were released with a statement from Amy Abernethy MD PhD, an oncologist with industry experience at Flatiron who is currently Principal Deputy Commissioner.

The detailed statement, with links to multiple new and existing agency documents, is online here.

• One of the most important is a draft guidance on Clinical Decision Support - here.
• Comments open for 90 days.
• Summary at Ropes & Gray here.
• Genomics tie-in:  CDS is considered important in genetics, precision medicine and oncology due to the tsunami of new facts.
• See the 2017 FDA digital health plan white paper here.
• FDA also finalizes changes to existing guidances based on 21st Century Cures Section 3060 - here.
• FDA aims to harmonize where possible to the IMDRF - the International Medical Device Regulators Forum - here.
• McDermott Will & Emery on the multiple FDA documents here.

Several existing guidances were also updated; see Abernethy's statement here.  These include the guidance for mobile applications, wellness devices, off-the-shelf software used in medical devices, and medical imaging software.

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In December 2019, SCIENCE had an interesting article on FDA, artificial intelligence, algorithms, and "regulatory lockdown" by Babic et al. - here.

Very Brief Blog: ICER Launches First Annual Report on "Unsupported Drug Price Increases"

Ouch!  The Boston-based Institute for Clinical and Economic Review (ICER) has published a new 125 page report on "unsupported price increases" for drugs in the US.

• See ICER's home page here.
• See Press Release on new report here.
• See 125 page PDF report here. (*)
• See trade press at BioPharmaDive here.

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(*) In Windows, I had to right click on the VIEW button and select "save link as."

Brief Blog: CMS Announces New Anti Kickback Proposals; Make Value Based Care Easier

Separate but related:

See a Seema Verma blog on wider program integrity efforts from September here, and a CMS Program Integrity "Request for Information" (due Nov. 20, but worth reading even if you missed the deadline) here.
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On October 9, 2019, CMS and OIG announced several hundred pages of pending proposed rulemaking intended to lighten coordination of care barriers for value-based care, such as ACO's.  

The rules were published in a website version, which is prior to both the "public inspection" copy at federalregister.gov and the official Federal Register publication, which typically follows in 5-15 days.

Associated Press summarizes as follows:

Azar said the idea is to encourage hospitals, doctors and other service providers to enter into formal “value-based arrangements,” in which they collaborate to improve care for patients and commit to delivering measurable results. 

For example, a hospital may send a kidney patient home with technology to monitor critical health indicators and automatically transmit back any signs of problems. Under existing rules, such an arrangement could be interpreted as the hospital providing the patient an illegal “inducement” to continue using its services.

The original rulemaking for ACO's faced some conflicts with similar kickback laws.  Also on the program integrity front, a few weeks ago CMS released final rulemaking for program integrity, generally making it easy to kick abusive providers out and keep them out (here).

See links below:

• CMS press release, including additional links about anti kickback statute (AKS) and Stark Law, here.
• OIG proposed rulemaking:
• OIG Federal register version, October 17, here.
• 84 Fed Reg 55694-55765 (72pp), 10/17/2019.
• Comment to 12/31/2019.
• Focus on "anti-kickback"
• CMS proposed rulemaking:
• CMS Federal Register version, October 17, here.
• 84 Fed Reg 55766-55847 (82pp), 10/17/2019.
• Comment to 12/31/2019.
• Focus on "self-referral"
• CMS Fact Sheet on Self-Referral changes, here.
• OIG Fact Sheet on Safe Harbor changes, here.
•  
• Coverage at Associated Press here.
• Coverage at Reuters, here.
• Coverage at Lexology, here.  
• National Law Review here (McDermott), here (Drinker Biddle).
• Wilson Sonsini here, Greenberg Traurig here. 
• Wynne et al. at Health Affairs, here.
• Mintz produced a three-part series of the proposes rules:
• Part 1, Part 2, Part 3.

Note that in September 2019, CMS released new regulations making it hard for fraudulent providers to use CMS as a revolving door through a facade of name changes or corporate shells; here.

Trump Name Watch

Some CMS press releases very prominently feature the President's name, including in headlines. (E.g., this week, see "Trump Administration Empowers Nursing Home Residents," here.) 

In contrast, this lengthy press release only mentions the President's name in passing ("Regulatory reform has been a key piece of President Trump's agenda.")  

Press Release Extract

These are examples of problems that the new amendments are intended to fix:

"Below are examples involving coordinated care, value-based care, data sharing, and patient engagement activities that, depending on the facts, could currently be difficult to fit under existing protections and could potentially be protected by the Stark Law, Anti-Kickback Statute, or Civil Monetary Penalties Law proposals if all applicable conditions are met:

Hospitals and physicians could work together in new ways to coordinate care for patients being discharged from the hospital. The hospital might provide the discharged patients’ physicians with care coordinators to ensure patients receive appropriate follow up care, data analytics systems to help physicians ensure that their patients are achieving better health outcomes, and remote monitoring technology to alert physicians or caregivers when a patient needs healthcare intervention to prevent unnecessary ER visits and readmissions. 

A physician practice could provide smart pillboxes to patients without charge to help them remember to take their medications on time.  The practice could also provide a home health aide to teach the patient and the patient’s caregiver how to use the pillbox.  The pillbox could automatically alert the physician practice and caregiver when a patient misses a dose so they could follow up promptly with the patient.   

A local hospital could improve its cybersecurity and the cybersecurity of nearby providers that it works with frequently.  To do so, it could donate, for free, cybersecurity software to each physician that refers patients to its hospital.  The hospital and the physicians often share information about their patients, so it is important that there are no weak links that might compromise everyone else.  The software would help ensure that hackers cannot attack the physician’s computers.  Improving each physician’s cybersecurity would help prevent hackers from spreading the attack to other physicians and the hospital. 

To improve health outcomes for patients with end-stage kidney disease, a nephrologist, dialysis facility, or other provider could furnish the patients with technology that is capable of monitoring the patient’s health and two-way, real-time interactive communication between the patient, facility, and physician.  In addition, the facility could equip the physicians with data analytics software to help them monitor patients’ health outcomes. 

In an effort to coordinate care and better manage the care of their shared patients, a specialty physician practice could share data analytics services with a primary care physician practice."

Very Brief Blog: Journal Watch: Flurry of Colon Screening Articles

Last winter, I noticed that Medicare has a special policy for frequent colonoscopy benefits, and it covers everything except genetics. 

If you have a family history of colon cancer or polyps, or a family history of familial polyposis, or family history of non hereditary colorectal cancer, Medicare will be happy to give you annual rather than per-ten-years colonoscopy.

But wait.  If you simply don't have the gene that runs in your family, you still get the Medicare benefit because you have a "family history;" as far as genetics, Medicare doesn't care. 

If you are gene-positive and therefore at high risk, but an orphan, you don't get a benefit, unless you can get an adoption agency to release records that your mom died of colon cancer.  CMS chugs on exactly as if Mendel never lived.  (Blog here).

Six Current Publications Related to CRC Prevention Policy

In the last few weeks, a flurry of research articles potentially relevant to colon screening policy and practices.

I'll rattle them off here and readers with further interests can use the links to go further.

1) Outcomes With Higher or Lower Intensity Screening

In September 2019, in Annals of Internal Medicine, Meester et al. studied the benefits of high-intensity screening, here.  Higher intensity screening had benefits, though small, and was cost-effective, though on the high side (<$100,000/QALY).  Comes with an op ed by Weinberg & Schoen on advising patients (here), and a "patient page" here.

Weinberg cites recent studies that up to 50-60% of patients have at least one tiny polyp on screening, thus qualifying for more intense screening (Weinberg citing Rex; and see Pilonis).

2) Outcomes With FIT, Colonoscopy, Sigmoidoscopy: Similar

In October 2019, in BMJ, Buskermolen et al. studied the differential outcomes expected, by modeling, assuming patients used either FIT, or sigmoidoscopy, or colonoscopy.   The conclusion: all were OK, and it didn't matter much.   Here.

3) European Guidelines: "Risk" More Important than "Age"  

In October 2019, a European guideline appeared in BMJ, Helsingen et al., recommending that CRC screening decisions be based on risk, not on age.

This would be quite different than US, where USPSTF and AHRQ recommendations are primarily based on age and definitely don't consider genomics (in or out) for either mammography or colon screening.  Article here, trade press at 360Dx here.

4) Towards Using Genetics in Population Health Recommendations for CRC Screening

In October 2019, in Cancer Epidemiology, Biomarkers, Prevention, McGeoch et al. published a systematic review of risk prediction models for CRC incorporating genetic variants.

They conclude that, "Public health modeling studies suggest that, if determined by risk models, the range of starting ages for screening would be several years greater than using family history alone."

See similarly Jeon 2018, here.

5) Cologuard: CMS Funds Cost-effectiveness Study

In September 2019, there was a media splash when a CMS-funded study appeared ascribing low cost-effectiveness to the Cologuard test.   See PLOS One, Naber et al., here.   Trade press here.  A STAT Op Ed on Cologuard here.   (My blog here.  I agree there are some errors, like lowballing the CMS cost of colonscopy.)

If this had appeared, say, in JAMA, there would be some letters pointing out errors, easily pegged to the article and easily found, co-listed in PubMed, etc.  Not so at PLOS One.


6) 2018 News Meets 2019 News: CRC Screening at Age 45 not 50

In late 2018, American Cancer Society new guidelines that CRC screening should start at 45, not 50.  Here. 

New tie-in this fall:  In September 2019, FDA approved Cologuard for patients 45-50,  here.

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How CMS Makes New Preventive Benefits 

CMS can make new preventive benefits through an NCD if they are first endorsed by USPSTF.

Separately, for exactly two cancers, prostate and CRC, CMS can make screening benefits by acting on its own (without USPSTF) if it wants to.   For a discussion of the underlying patchwork of laws, here.


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Footnote.

Essay comparing making new laws to making sausages.  Here.  Probably could adapt to "making new Medicare CRC preventive screening benefits."

But that's in keeping with the spirit of the original sausage metaphor.  The idea "Don't watch how sausage is made," from Bismarck, stated in full: "Don't watch how either law or sausages are made." Or colorectal cancer preventive screening benefits.

Original online here.

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Essay, on the original Bismarck quote,"The less the people know about how either laws or sausage are made, the better they will sleep."  ("Je weniger die Leute wissen, wie Würste und Gesetze gemacht werden, desto besser schlafen sie!“)

It's True: New Book on the Policy of Medicare Evidence & Coverage

This past week, President Trump signed an executive order asking Medicare to do a dozen things, one of which is "define reasonable-and-necessary."  For background and links, here. 

The Trump E.O. led a friend to point me to a 2016 court case on "reasonable-and-necessary" as used in a PET NCD, Kort v Burwell, and that led to a fascinating and well-written 2018 CMS follow-up document (apologia pro NCD sua) published in Federal Register, 2018.  And while googling "Kort," Google Books popped up the book title discussed in this blog.

New Book

Along the way, I discovered there's a major 2018 book on how CMS makes policy decisions for coverage:  "Debating Modern Medical Technologies: The Politics of Safety, Effectiveness, and Patient Access." 

It's available in both eBook and hardcover (Amazon here, publisher here.)

Authors

The authors are:  Karen J. Maschke, a research scholar at The Hastings Center, and Michael K. Gusmano, a Hastings Center research scholar and an associate professor of health policy at Rutgers University School of Public Health.

For Maschke at PubMed, here.  For Gusmano, here.

Summary

The book isn't devoted solely to Medicare, but most of the topics are focused on Medicare.  There is a chapter on the history of the federal governing setting up, then dismantling, technology assessment bodies.  (For one open access article on this topic, Grey, Gusmano, Collins, here.)  The authors then devote meticulously researched chapters to:

• Mammography policy, esp. women ages 40-49 and annual vs. biennial tests.
• Brain imaging (amyloid) for Alzheimer's; the NCD history.
• Introduction of high-cost hepatitis C treatments.
• FDA/CMS responses to FDA withdrawal of breast cancer from Avastin labeling.
• Regulation of stem cell therapies; some discussion of CAR-T.  (See also their Health Affairs article, here.)

Some of this I lived through day by day as a policy consultant (especially the amyloid story).  All of it was interesting.

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I haven't read it yet, but there's also a 2017 book, "Unhealthy Politics: Battle over Evidence-based Medicine."  Amazon here.  One author or "Unhealthy Politics" is Alan Garber MD PhD, long a health economist at Stanford, and now Provost of Harvard.

For a book on politics & society for a topic not discussed by Marschke and Gusmano, see "False Hope: Bone Marrow Transplantation for Breast Cancer," by Rettig et al., 2007 (here).

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Unrelated to coverage, but also delving equally deep into CMS policy, see the 2016 book on the AMA RUC and CMS RVUs, Miriam Laugesen, "Fixing Medical Prices: How Physicians Are Paid."  Press here, Amazon here.  My blog on Laugesen, here.

The 2016 Kort vs Burwell Court Case: Defining Reasonable and Necessary in NCD's

Bullets:

• President Trump just signed an Executive Order asking CMS to define "reasonable and necessary."
• CMS has tried this before, and at most, ended up with vague language and general points printed in the LCD manual.
• A court case (Kort) in 2016 gave CMS wide latitude to define "reasonable and necessary" and clinical utility.
• The court case required CMS to explain why it covers FDG-PET in dementia but not Amyloid-PET, which CMS did pretty articulately in 2018.  This CMS Federal Register analysis of coverage decision-making is more clear and systematic than most NCDs.

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On October 3, 2019, President Trump signed an executive ordering requesting about a dozen activities from the Medicare program (see blog and further links here).

Task Order #6 is to

• Clarify the application of coverage standards, including the evidence standards CMS uses in applying its reasonable-and-necessary standard, the standards for deciding appeals of coverage decisions, and the prioritization and timeline for each National Coverage Determination process in light of changes made to local coverage determination processes.

CMS Has Tried Before to Define R&N

It's notorious among CMS experts that the agency has tried to "define reasonable and necessary" several different times, going back decades.  With Felix Frueh I co-authored a paper on the related topic of "defining clinical utility" in 2014 (here; online PowerPoint and video course here).

 A good Medicare trivia question would have the answer that one of the attempts to "define reasonable and necessary" in the 80's or 90's in regulations ended up as manualized language embedded inside the CMS manual for LCD's.  (See LCD guidance from CMS at bottom of this blog).

An excellent book that profiles the history of coverage decision-making in Medicare back to the 1960s, and with a full chapter on the Kort case (below) is:  Maschke & Gusmano, Debating Modern Medical Technologies (2018).  For more on the book, here.

Very Relevant 2016 Court Case: Kort v Burwell

Very relevant is the 2016 court case Kort v Burwell, in the cloud here.   CMS has several NCDs about PET scans, one of which allows FDG-PET to be used in ambiguous cases of frontotemporal dementia versus Alzheimer's disease.   Another blocks payment for the use of Beta-Amyloid PET (e.g. AMYVID) except in RCTs under coverage with evidence development.

KORT took the agency to Kort on several grounds.  First, the agency should not require outcomes evidence for the diagnostic test, since diagnosis alone was enough (reasonable and necessary for diagnosis OR treatment, not necessarily both).   Second, a regulation for diagnostic tests only required they be ordered by the treating physician (42 CFR 410.32).   Third, CMS covered FDG-PET, which has similar enough performance and data, so it is unreasonable and inconsistent to "non-cover" Amyloid-PET.

Judge Amit Mehta ruled on all three issues.   First, CMS could require outcomes evidence in making a coverage decision on a diagnostic test.   It was an implied authority from statute and not an unreasonable breach or an entry into a forbidden area of authority.   Second, the regulation requiring tests be ordered by the treating physician was an ENTRY to reimbursement; this regulation did not imply and was never intended to imply that any test so ordered was covered.  Third, the judge found that the diagnostic evidence for accuracy and the lack of outcomes evidence for witnessed improvements in health was similar enough for the FDG PET NCD and the Amyloid PET NCD that this issue was remanded back to CMS for further consideration.

In 2018, CMS Wrote Lucid Document Explaining Non-Coverage of Amyloid PET 

In follow-up to the third action item in Kort v Burwell, CMS published a 5-page public explanation of why CMS covered FDG PET for Alzheimer differential diagnosis, but not Amyloid PET.  See CMS document 3353-N, 83 Fed Reg 15572-6, April 21, 2018.  Here.  Interestingly, Alex Azar, who was probably battling to get Amyvid covered during its NCD applications as General Counsel of Lilly, was Secretary of Health at the time the non-coverage explanation was published in 2018.

83 FR 15572 (2018)

CMS said the two NCDs differed due to (1) the type of assessment (result) the test provided, (2) predictive value including false positives and negatives, and (3) strength versus weakness of relevant expert consensus panels.  CMS shows why the differences were sufficient to lead to two equally rationale, but contrary, NCDs.

R&N decisions are based on "to what degree the agency is confident that the intervention [test] will improve health outcomes in beneficiaries."  Whether use of the test to guide patient management imrpoves health outcomes "also referred to as clinical utility."  Analytical accuracy and clinical validity are considered as well.   The agency devotes substantial concern to whether amyloid testing has too many false positives (the test is analytically correct, the brain has amyloid, but the patient does not have Alzheimer's.)  An expert panel on FDG had strong consensus in the early 2000s, two available panels on Amyoid circa 2013 did not agree.  CMS found there was not strong evidence to support either the favorable or unfavorable opinion (e.g. lack of clear evidence "to support or refute").  (Of course, if there was clear evidence to refute an expert panel opinion, presumably the expert panel would not have that opinion.) CMS relied on "the totality of evidence" as well as the lack of expert agreement.

The Federal Register Discussion of CMS Thinking

The Federal Register article cited above is quite a bit more structured, rational, logical, and clear than most NCDs are.  If there was one point I think they miss, it is that the FDA trials for accuracy were done either in clean controls or in known Alzheimer patients.  The target population for clinical practice is a more difficult and intermediate group, those with uncertain and early and difficult to categorize symptoms.  It would be misleading to characterize accuracy data (TP, TN, FP, FN) in an artificial population of very clean case or advanced (autopsy) AD cases, and then suggest that accuracy would apply to a clinical population which by definition is in a border zone between the two extreme states.

CMS, FDA, and Uncertainty

Since CMS decisions are clearly stated to rely on level of uncertainty, probably relevant to CMS coverage decisions is an FDA 2019 guidance on dealing with uncertainty in risk benefit decisions, here.


Summary

For Medicare nerds, Kort v Burwell makes good airplane reading. So does the Federal Register publication.

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Medicare Put Attempt to Define R&N Into An Online Contractor Manual for LCDs

The following text in the current CMS online manual for LCDs (here) originated in a legalistic Federal Register attempt to define reasonable and necessary, probably dating back to the 80s or 90s:

Contractors shall determine and describe in the LCD the circumstances under which the item or service is reasonable and necessary under 1862(a)(1)(A). Contractors shall determine if evidence exists to consider an item or service to be reasonable and necessary if the contractor determines that the service is:   
• Safe and effective;  
• Not experimental or investigational (exception: routine costs of qualifying clinical trial services with dates of service on or after September 19, 2000 which meet the requirements of the Clinical Trials NCD are considered reasonable and necessary); and  
• Appropriate, including the duration and frequency that is considered appropriate for the item or service, in terms of whether it is:
   o Furnished in accordance with accepted standards of medical practice for the diagnosis or treatment of the patient's condition or to improve the function of a malformed body member;  
  o Furnished in a setting appropriate to the patient's medical needs and condition; 
  o Ordered and furnished by qualified personnel; 
  o One that meets, but does not exceed, the patient's medical need; and 
 o At least as beneficial as an existing and available medically appropriate alternative.  

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For some additional online links regarding Kort v Burwell:

• Us Against Alzheimer's, decries decision supporting CMS, here.
• Another source for the online case here.
• Cited by ADVI's Dr Louis Jacques in online deck here.  See also another deck online here.
• Cited in a book, "Debating Modern Medical Technologies: The Politics of Safety, Effectiveness, Patient Access," Maschke & Gusmano, Praeger 2018, Amazon here.  Book includes discussion of PET NCD to put the court case in context.  

Trump Signs Medicare Policy Executive Order; Highlights New Tech Access

On October 3, 2019, President Trump signed an executive order regarding a suite of Medicare policies and adaptations.  Effects including widening access to Medicare Advantage (MA) plans; improved telehealth benefits in Medicare Advantage; and additional statements about rapid access to new technologies.

• See the Executive Order here.
• See a favorable fact sheet about administration accomplishments here.
• See a negative fact sheet against "Medicare for All" here.
• See a very brief press statement by Seema Verma here.
• See YouTube video of speech by DJT here (one hour).
• See Whitehouse.gov transcript of speech here. [9200 words]

I've put the documents above in a cloud zip file here. 

See early coverage at The Hill here. At NPR here.  MedTechDive here.  MedPageToday here.  MedCityNews here.  Summary by Michael Adelberg at Faegre Baker Daniels here.  And, in December 2019, see a Health Affairs blog by Kushal Kadakia on the E.O. and on CMS viewing "innovation as the next frontier," here.

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Some of the Executive Order statements are reiterations of existing policy, but I include those in the list below.  For details see the full E.O. at link above.

Highlights:

Telehealth in MA.  MA to make more use of telehealth.  Historically this had has pro's and con's, for example, if MA plans ignore local brick and mortar providers and "compensate" by offering only telehealth visits.  Implications for network adequacy in Medicare Advantage telehealth; here.

Pricing cuts.  Several items about repricing FFS rates against "market rates" or "MA rates."

Shorten the current lag from FDA approval.  Interesting to see how they will reduce time from FDA approval to coverage.  They also want to improve Parallel Review between CMS/FDA, which has only fully been used twice in six years.

Define evidence standards (reasonable and necessary) for coverage and appeals.  Defining "R&N" is an issue that CMS has broached before in regulation, but dropped.  See a 2002 article here and 2009 here.  Article by Sean Tunis 2006 here.  FDA"s 2019 guidance on balancing uncertainty of risk/benefit, here.  For a 2016 court case on NCDs and R&N, Kort v Burwell, here.

MA covers new tech?  Look into situations where MA plans cover a new tech, but, FFS Medicare does not.  (I'm not sure this happens very often; it may happen sometimes.)

Bullet Summary of Full E.O.:

1. Medicare is good, but Medicare For All is bad.
2. Improve the Medicare program through value and alternative payment methods.
3. Let MA plans and benefit structures be more diverse. Let beneficiaries share in savings for less expensive care.  Don't favor FFS Medicare over MA. Consider lowering FFS rates to MA rates where appropriate.
4. Make network adequacy rules for MA flexible and include telehealth.
5. Give doctors more time with patients by reducing regulation.  Appropriate reimburse allied specialties (eg nurse practitioners).
6. Encourage Innovation by Regulatory and Sub-Regulatory Means.
1. Minimize or eliminate time from FDA approval to CMS coverage decisions.
2. Clarify evidence standards for coverage decisions and appeals (define "reasonable and necessary")
3. Repair challenges to Parallel Review
4. Examine situations where MA plans cover new tech but FFS has barriers.
7. Continue to push for site neutrality in payments.
8. Make Medicare better by e.g. highlighting physicians with practice patterns that pose risk to patients.  
9. Combat fraud and abuse. Use artificial intelligence.
1. Study ways to transition Medicare to market-based pricing, including competitive bidding for FFS providers and use of MA rates.
10. Eliminate regulatory burdens.
11. Improve policies for patients who choose not to be in Part A.
12. Implementation to be consistent with existing law.

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"Right to Try" Watch: In several prior healthcare speeches, such as on renal policy and on surprise billing, President Trump has included several paragraphs discussing his successful push for Right to Try experimental drug laws.  Again in today's speech: several paragraphs on the success of the administration's Right to Try drug law.

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Are They Raising FFS Prices???  I've seen a few sources assert that Trump will peg FFS Medicare prices to higher MA prices and make FFS unsustainably expensive (e.g. LATimes here).  I don't read the E.O. text that way; I think they would cherry pick MA for places where MA prices are lower than FFS.  This would also help "reduce any advantages that FFS has," one of the high level goals.  I don't know if there are many examples where MA prices are lower than FFS prices, but, competitive bidding dropped DME prices and pegging to commercial rates dropped lab test prices.

Medicare tidbit: CMS doesn't control prices in MA.  There is a regulation somewhere that providers out of network in MA can appeal prices until and unless it matches FFS levels.   MA plans and providers otherwise have a free hand to voluntarily elect to contract at prices higher or lower than FFS.

Cocktail Party Question: How Big Are Medicare Readmissions Penalties?

This week, Seema Verma, head of CMS, published a long article in Health Affairs about CMS's successes with Accountable Care Organizations (ACOs).    Of course, in some circles how much money ACOs save and way is pretty hotly disputed (here); see a news roundup on the topic at Kaiser Health News, here.

Average Hospital see 0.7% Average Annual Penalty Related to Readmissions

One related topic that I find often confuses clients is how much hospitals lose under readmissions penalties.   Some new data today at MedCityNews (here).  Medicare charges a penalty for readmissions within 30 days, and if the readmission is to Hospital "B", then Hospital "A" is charged the penalty.   However, the penalty is far less than the payment for the readmission.  According to MedCityNews, the average penalty is 0.7% and the maximum is 3%.   (The penalty is charged against next-year-revenues from CMS to the hospital).   Only about 1% of US hospitals reach the 3% penalty cap.




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Readmissions penalties are also controversial, with some analyses even showing they hurt patients (here) or concerns that they encourage gaming (also here).

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The CMS homepage for readmissions policy is here.  For an overview of CMS readmissions policy at NEJM Catalyst, here. (Noting also that readmissions for targeted conditions fell from about 21% in 2007 to about 18% in 2015.)   For an open access article by USC's Spellberg on how these issues look from the CFO's suite, here.

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Seema Verma's September article in Health Affairs was on readmissions.  Her prior August article was on CMS antibiotics policies - here.

Very Brief Blog: Updated Analysis of the CMS New Crosswalk/Gapfill Proposals

On Friday, September 27, 2019, CMS released proposed 2020 pricing for 90 lab codes.

I posted that data Friday night.  Since many people see this blog as a news feed, I'm letting you know that I have redone the analysis comparing CMS decisions with expert panel voting.

See the updated blog at the original location - here.  

For example, CMS and Panel agreed 48% of the time.  While Panel recommended 28 gapfills and CMS recommended 26 gapfills, only half the codes chosen matched between those sets of 28 and 26.  All the codes getting gapfill were PLA codes.  See more at the link.

For another example,  CMS and Panel both recommended crosswalk 16 times.  I randomly sampled 6 cases.  If CMS offered its preferred codes irrespective of price, the CMS code could be randomly higher or lower in price than the Panel choice.  In fact, 6/6 of the CMS choices were lower price than the Panel choices (p<.02).  CMS pricing ran about 65% of Panel pricing. 

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Very Brief Blog: 21 Comment Files on CMS Molecular "Date of Service" Changes

BULLET:

CMS proposed changes to its molecular test date of service rule.  At least 21 entities submitted comments.  (Note, there could be more that my key word search didn't pick up.)

BACKGROUND:

The Medicare Date of Service rule for lab tests dates to about 2008, and requires lab tests to be billed by a hospital outpatient center if ordered within 14 days of the date of discharge (e.g. the biopsy date for an outpatient surgery, or the blood draw date for a hospital outpatient clinic patient).   This is also the date after an inpatient discharge when a lab test becomes payable, not bundled to the DRG.

Around 2014, Medicare began bundling all lab tests associated with an outpatient hospital visit unless they are human molecular tests (microbiology molecular tests are bundled).

Around 2018, CMS proposed that molecular lab tests billed within the 14 day window should be billed by the lab that runs the test - in some cases the hospital itself, in other cases a remote reference lab.   In 2018 and 2019, CMS has allowed either the hospital or the remote reference lab to bill for a reference lab test.  Compliance can be complex (here).

WHAT HAPPENED THIS SUMMER:

In Summer 2019 rulemaking, CMS proposed several changes that agitated the lab community, including a proposal to bundle all molecular tests (unless they were ADLT tests), or alternatively, to require the hospital-only to bill within 14 days (the status quo 2008-2017).   The rule also involved blood bank labs.

For more background on the above issue, see blog here.  The OPPS rule itself (84 FR 39598ff) contains a very thorough history of the topic.

THE COMMENTS ARE IN

OK.  The comments are in; I was able to pull 21 of them (by searching here) and have put the resulting 30 mb ZIP file in the cloud: here.

Commenters include:

• AABB
• Abbott
• Abbvie
• ASCO
• ASCP
• Biodesix
• Biotheranostics
• Century 21 Coalition
• CAP
• CareDx
• CDx
• Cleveland Clinic
• Exact Sciences
• Guardant Health
• LUNGevity
• NCCN
• PEACH [hospital coalition]
• Pfizer
• PFS [Lab] Coalition
• Red Cross
• Veracyte

There could be comments that weren't released yet to the web by CMS or that I missed with my keywords.
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I used keywords "date of service" & "molecular" so I think this inventory of PDF's is pretty comprehensive, but it might not be a perfect list.

Aegis Labs Protests CMS Proposal to Bundle $200 Tox Tests into Opioid Clinic Care

The new September 23,2019 issue of the Dark Report (subscription) has several articles on opioid drug toxicology monitoring as a growth area for labs (here). 

One topic I didn't see mentioned is Medicare's proposal to bundle tox testing costs (at immunoassay cup rates) into its new proposed payment bundle for Opioid Treatment Programs (OTPs). 

Background

OTPs are shorthand for federally designated methadone clinics, although they can and may give other medication assisted drug treatments (e.g. buprenorphine) and counseling services. 

Given the opioid crisis, in October 2018 legislation, Congress created a new Medicare provider category for OTPs and provided guidelines for CMS to implement a bundled-payment benefit.

What CMS Proposed; Why AEGIS Is Unhappy 

This law, SUPPORT section 2005, is handled within this summer PFS rulemaking (here; a law firm's summary here).   CMS proposed to bundle immunoassay tox screening tests and any other toxicology testing into one low payment to the OTP.  (This is similar in concept to bundling lab tests into an ESRD monthly payment, or lab tests into an OPPS surgery visit).

If you want to get more up-to-speed on this, the best entry point I have found so far is the 30 page comment to CMS from AEGIS Labs, in the cloud here.  AEGIS is not happy.

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CMS payments for definitive tox tests (G0480-G0483) pay $114 to $247.  Presumptive test (80306) is about $17.

Small Share of Market

Medicare patients in OTP programs (essentially the methadone programs) would be a very tiny part of the national opioid use disorder market.  However, the theme of creeping bundling that may underfinance lab testing is an important theme.

Very Brief Blog: CMS Releases Proposed Crosswalk Pricing for CY2020 Lab Tests

On Friday, September 27, 2019, after market close, CMS released its proposed pricing for new CY2020 lab codes and for several codes under appeal in CY2019.

The proposals are under comment until October 27, to:  CLFS_Annual_Public_Meeting@cms.hhs.gov   

CMS priced 90 new codes, disagreeing about half the time with its advisory panel, which met on July 22/23 (pdf).  For more background on prior activities summer, here.  Final pricing will be announced in November.

See the Excel spreadsheet in the cloud at CMS, here.

On Sheet 1 of the Excel, CMS explains there were several codes for which it picked crosswalks that match no suggestion from public or panel.   On Sheet 2, it shows the panel votes, public suggestions, and the rationale for its proposed choice.  Note that CMS slightly updated to Version 2 between 9/27 and 10/2, updating its explanation of its agreement/disagreement with committee minority choices for several rows of the spreadsheet.  And note, I've tallied agreement or disagreement against the panel's majority vote (CMS may have agreed with a panel minority vote.)

(Screenshot, click to enlarge)

Top-Line Analysis: Crosswalk vs Gapfill in the CMS Proposals

Updated 10/2/2019

In a tally of CMS recommendations, I get 64 crosswalk and 26 gapfill = 90 total recommendations.

Now, the expert panel had recommended about the same gross numbers, 62 crosswalk and 28 gapfill.  What's interesting is that there is only 48% agreement between the Panel and CMS decisions.  This 48% includes category changes (from crosswalk to gapfill or vice versa) and other changes (from one crosswalk to a different crosswalk).

Of the 64 CMS crosswalks, 55 were single-code crosswalks and 9 were multiple-code crosswalks.  Of the 9 multiple code CMS crosswalks, just two were to a fraction, one to 0.5X and one to 1.5X.

The one code with a CMS-endorsed 1.5X multiplier was 0070U, Mayo extended version CYP2D6, which had many more variants than the target code 81226 (regular CYP2D6).

Panel vs CMS Decisions  

This current year in 2019, 18 codes are under gapfill.  For 2020, CMS is willing to put 26 codes into gapfill.

As noted earlier, only 48% of the currently proposed CMS recommendations were exactly the same as a the panel majority-vote for that code.

Generally, for any category like "crosswalk" or "gapfill" or even "single code crosswalk," what CMS chose matched the panel close to half the time.  For example, of 64 crosswalk CMS recommendations, 29 or 45% matched panel.   Of 55 single-code CMS crosswalks, 25 or 45% matched panel.  Of 9 CMS multi-code crosswalks, 4 or 44% matched panel.  Finally, of 26 CMS gapfill recommendations, 14 or 54% matched panel.

However, Panel was more likely to make multi-code and fractional code crosswalks in the first place.  Panel made 14 multi-code crosswalks, 8 of which contained a fraction.   CMS made only 9 multi-code crosswalks, and its two that contained a fraction were among the 8 were Panel contained a fraction.  Of the two CMS fractions, one was for a reduced price (0.5X) and one was for a raised price (1.5X).

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Are PLA Codes Different?

73 of the codes are new PLA codes, so whatever the data is for PLA codes, it can't be too different from the full set.   That said, Panel recommended crosswalk for PLA codes 47/73 times, and Panel recommended gapfill for PLA codes 26/73 times.   CMS agreed about half the time. 

If you work from the proposed CMS numbers, overall CMS recommendations added up to almost the same (of 73 PLA codes, 48 for crosswalk and 25 for gapfill.)   So if you are a new PLA code, you stand a 2/3 chance of being quickly crosswalked and the pricing process is finished for you.

However, taken the CMS PLA recommendations as a starting point, the CMS best crosswalk for a PLA code matched the panel majority only 33% of the time (16/48) while the CMS recommendation to gapfill a PLA code matched panel 52% of the time. 

But here's an angle. Of CMS Gapfill recommendations, all were for PLA codes.  Ditto for Panel recommendations.


CMS Trying to be Clear

CMS is trying to be clear in its (brief) rationale descriptions.  It also includes a special table where CMS highlights where its decisions particularly diverged from panel and public comment, for example, if it picked a crosswalk that no one on the panel had suggested.  Here:

CMS highlights several changes; click to enlarge or see Tab 1 of CMS Excel

CMS Makes Apparent Error re BRCA Appeal Codes

Two BRCA sequencing codes are under price appeal, 81163 (BRCA 1,2, Full Seq) and 81165 (BRCA 1 Full Seq).   CMS states that "Other than the initial request for reconsideration, we did not receive public comments on these codes during the June 2019 Annual Laboratory Meeting and prior to the July 2019 FACA CDLT Panel meeting."  This is incorrect.  For example, page 3 of the ACLA public presentation on in June 2019 clearly gave its recommendation and opinion for the repricing of these codes (raise 81163 to 81408 = $200, and raise 81135 to 1/2 of that.)  CAP made the same recommendation.  So did AMP. 

When CMS Changes a Crosswalk, It's Usually to 63% Of Your Suggestion

CMS and Panel agreed that 36 codes should be crosswalked - by method.  But they only agreed that 20 should be crosswalked to the same value, and CMS crosswalked 16/36 to different value.  I sampled every 5th row of this section, and found that CMS crosswalked to values between 52% and 75% of the Panel suggestion.  Every choice by CMS that was different, was cheaper.  Since I checked 6 values, I think there's 2^6 or 1 in 64 chances that CMS was randomly picked different best-crosswalk values it found more accurate, but which could be either higher "or" lower than Panel.  Seems like the dice are weighted. 

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For gapfill proposed prices on 18 codes, released August 21, 2019, under public comment until Monday, October 21, 2019, here.

Update January 2020:
I got a FOIA 57 pp PDF of public comments on the GAPFILL prices.  I put it in the cloud here; four companies made comments.

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For me the spreadsheet version 2 released by CMS opened with a number of hidden rows at different points in the 90 rows, which I had to manually reopen.