Very Brief Blog; FDA Releases New Guidance for Risk/Benefit and for Real World Evidence

Endpoint news has an article noting that FDA just released 5 new guidance documents.  

Two are of major interest.   The first is a 23 page draft guidance on how FDA will frame its approach to risk/benefit assessments for drugs and biologicals.  Here.    The second is a 39 page draft guidance on how FDA will assess real world evidence, particularly, EHR data and payor medical claims data.  Here.

Both will have Federal Register announcements that give a specific 60-day time frame for comments and a comment channel (portal).   They'll come out September 30.   Risk Benefit here.  RWE here. 

Risk-benefit frameworks, of course, are also relevant to FDA approval of medical devices and diagnostics, and have analogies to medical benefit (risk/benefit) decisions at payors.

The risk benefit can be summed up in a short table (in an almost comically simple and short table...), although the point of the 23-page document is providing background to what this table really means.

Very Brief Blog: NYU Launches Master's in Health, Law, Strategy

Twenty years ago, for a master's degree related to healthcare, you largely had the choice of an MPH on the one hand, or an MBA with a healthcare (probably hospital) concentration on the other hand.  NYU has launched an innovative one-year Master's of Science in Health Law and Strategy.

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In 2001, when I was doing a night school MBA  Northwestern, they had recently launch an innovative master's in biotechnology which including courses cross-listed with the B-School.  See today's collateral for the NWU program here.  (Similar programs in Boston at Northeastern and at Brandeis.)  Today ASU has a master's program tailored to the diagnostics branch of biotech, here.

NYU, where I was a med school professor 1994-1997, has just launched an innovative approach to a one-year master's degree for healthcare and life sciences. It's called Health Law and Strategy - home page here.  The goal is summed up in a quote from William Bernstein, 

“Healthcare today is like a Rubik's Cube—its aspects seemingly impossible to align. To imagine a future that isn't bound by conflicting financial incentives and regulatory schemes, tomorrow's leaders must not only study the past but master the strategy, law, policy, and technology that will enable them to innovate a different path.”

NYU's Wagner School of Public Affairs is rated #2 nationally for health policy and their law and business schools are also very strong, so they bring a lot of resources to the table.  See more about the interdisciplinary nature of the new program here.

The three semester program is summarized by titles as:

• Semester 1: Analyzing Health Law, Strategy, and Economics
• Semester 2: Navigating the Healthcare Landscape: Regulation, Policy, and Financing
• Semester 3: Leading Technology, Innovation, and Integrated Solutions

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Crossreference:  Gilfallin & Berwick's 2021 articles on business strategy, profit methods, and Medicare Advantage.  Follow up at Bloomberg, here.

New Health Policy institute at Stanford. Here.

FTI, a global economics consultancy, launches a new Health Policy vertical for applied economics.  Here.  The website leads to a 21 page capabilities brochure.

Very Brief Blog: NYT Runs Several Articles on Payer Issues

 Briefly noted - 

• On September 25, 2021, NYT runs a lead article on COVID test pricing, headline, "How a Law Allows Labs to Charge Any Price."  Here.
• Many of the issue's in today NYT were in play in the media last summer.  
• See my July 2021 blog collating articles and links on COVID test pricing, here.
• For a March 7, 2021, NYT article also on COVID test pricing, here.
• UPDATE:  After the September 25 NYT article, see also a September 30 article in KHN on "A Covid Test Costs More Than a Tesla."  Here.
• On the issue of extreme surprise billing, NYT runs an article September 21 on a couple charged $257,000 for infant hospital fees as part of a dispute between the hospital and two insurers.  Here.
  

Michigan Medicaid Proposes Rules to Reimburse Whole Genome Sequencing

Tucked inside a presentation on September 13, 2021, by Illumina's CEO Francis deSouza, a remark that points to new genomic test coverage at Michigan Medicaid.  Here's the speech (at Morgan Stanley).

"We have teams that now have deep expertise and experience and tools in getting reimbursement.We saw that even recently where last week Michigan became the first state in the US to have Medicaid coverage for critically-ill children in the NICU for rapid whole genome sequencing. That work on a project called Project Baby Bear [a California Medicaid project for pediatric genomics] was something that we'd worked on for a couple of years to make that happen."

There's a story about Michigan Project Baby Deer (pediatric genomics) at the Rady Children's Institute Genomic Medicine website, here:

"On September 1, 2021, Michigan became the first state to make rapid Whole Genome Sequencing™ a covered benefit for eligible infants enrolled in Medicaid (contingent upon approval of a State Plan Amendment [SPA] by the Centers for Medicare & Medicaid Services).  Michigan Medicaid will reimburse hospitals for the cost of rWGS testing separate from inpatient DRG payments."

See the original Michigan policy document PDF, dated August 17, 2021, here:

See the PDF for inclusion and exclusion rules.  

See an NPR story on infant WGS, October 2019, here.  See a long-form story by Michele Marrill in Wired, March 2020, here.  See a story in MedPageToday, June 2021, here.

For more about the California "Baby Bear" clinical whole genome sequencing project, website at Rady, here.   For a peer-reviewed article on Project Baby Bear, July 2021, Amer J Hum Genet (Dimmock et al), here.  (I noticed this article is online at SciHub).  See also Rady authors at Franck et al., 2021, adoption barriers, here.    (But see Lantos op ed, here.)   For an archive of Grand Rounds videos from Rady, here.

In the U.S. Senate, S.2022 is one of several pieces of legislation in the past year to address increased coverage of urgent pediatric genomic tests in Medicaid.

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On biomarkers more generally.  I'm not versed in the details, and legislation can be variably easy or hard to read, but this year Illinois passed a biomarker coverage law (see Genomeweb, August 2021, Turna Ray, here) and so did Louisiana.  In California a Biomarker Bill, SB-535, passed the assembly September 2 and the Senate September 7 - here.

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See Rady's webpage for pediatric genomic projects by state.  California has had Baby Bear; Michigan, Baby Deer; Florida, Baby Manatee, and so on.

The Other Side of the 14 Day Rule: The 3 Day Rule (72 Hour, PreAdmission Rule)

There's a "14 Day Rule" that bundles genomic lab tests to inpatient stays for 14 days after discharge.  

Did you know there is also a "3 Day Window" Rule, that bundles lab tests to a DRG, for 3 days in advance of admission?

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I wrote a blog explaining the 14 Day Rule for outpatient lab tests in 2015, which is still up - here.  The major update since then was a Fall 2017 rule, supposed to be effective January 2018, actually effective January 2020, that genomic tests should be billed by the lab that performed them for outpatient specifics in a 14 day window.  See CMS home page for 14 Day Rule here.

I'm gearing up to speak on a panel about the 14 Day Rule and lung cancer patients on October 14, 2021.  This is the Foundation for Lung Cancer, Go-2 Summit, CEnters of Excellence Summit.  Home page, agenda, and registration here.

14 Day Rule - Background

See 2015 blog for illustrations.  The starting point is that the date of service is the date of specimen collection (whether for hospital inpatient or hospital outpatient).  This remains the date of service UNLESS a test is ordered by the treating physician more than 14 days after discharge.   For an outpatient, the date of specimen collection and "date of discharge" are probably the same.   For an inpatient, the date of discharge might even be after the 14th day after the specimen collection.  

(For example, a patient is admitted for lung cancer surgery on July 1, has actual surgery on July 2, and is discharged on July 30.  The physician orders the genomic test on August 3.  The triggering date is a physician order 14 days after discharge (not 14 days after surgery), so the physician order must be August 14 or later to reassign the Date of Service, even though the surgery was July 2.)

New News: There's Also  3-Day, or 72-Hour Rule

Diagnostic test bundling also applies for 3 days PRIOR to a hospital admission.  I was aware of this but had never looked up the laws and regulations.   This "3-Day" or "72-hour" rule is complex in its own way.  The CMS term CMS to usually be, "3 Day Payment Window" which implicates this policy applied 3 days before a hospital admission and the start of a DRG payment.

(It's actually a "3 Day Non Payment Window"...)

72-hour bundling dates of pre-admission lab tests dates back decades, and was probably meant to cover routine pre-op tests (blood clotting, urinalysis, CBC).   The Claims Manual (link below) gives rules for claims processing era by era ("For Claims prior to January 1, 1990," we read.) 

But: The 3 Day Window was most recently adjusted by a 2010 law.  Not the ACA, but rather the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010,” Pub. L. 111-192.   This requires bundling of all diagnostic services provided 72 hours prior to admission, AND generally requires bundling of all non-diagnostic services EXCEPT IF the hospital can make an affirmative argument that the non-diagnostic services aren't related to the admission.   At the time, the rule was expected to save $4B over ten years (here).

However, this applies to the admitting hospital and any wholly-owned entity under it.  If I've read some explanatory articles correctly, if Entity A owns Hospital Y and MRI Center Z, then MRI's done at Center Z don't require bundling, because Z is not "wholly owned" by the admitting Hospital Y.   (That's my understanding from what I've read, but I'm not an attorney).

Rarely, 3-Day Window Could Make Genomic Tests Bundled?

One could imagine a setting where a hospital runs an on-site 300-gene tumor test on an outpatient July 1, and there'd admitted for a sudden worsening of their cancer on July 3, in which case the 72-hour rule might apply.   Interesting to know.   

Resources on the 3 Day Payment Window

• The 2010 law is here, the bundling rule is at Section 102.  
• The law is codified at SSA 1886(a)(4).  Here.
• CMS isn't given much discretion, because the 72-hour pre-bundling is baked into the hospital payment statute.
• Regulations are 42 CFR 412.2, here.
• Manual instructions are at Inpatient Claims Manual, Ch 3, Section 40.3, here.

Further handy explanatory resources include:

1. CMS FAQ on 72 Hour Rule here.
2. CMS Home Page for 72 Hour Rule here.
3. Original Implementing Memorandum here.
4. Consulting firm Conduent discusses (Andrew Townsend) here.
5. OIG report, 2020, claiming that CMS pays in appropriately for services that should be in the 72 hour bundle, here.

The MolDx "Minimal Residual Disease" LCD - Will It Appear Imminently?

In July, I published a blog on the progress and publication timelines of some major MolDx LCDs (blog here.)

One of the most highly-watched is the LCD for coverage of minimal residual disease testing in cancer - policy DL38779.   It was posted on the Medicare coverage database on September 24, 2020, and CMS instructions for LCDs require they be completed "within a rolling year of the posting date."   Hopefully, the final LCD will appear any day now.

It turns out, the "one year deadline" for LCDs is not to publish them (according to a MAC) but to finish them ("complete them") internally.   So for example, an LCD finished on September 15 might actually appear or be unveiled to the public on October 10 or 20.   Also, the instruction to complete "within a rolling year" is a guideline, and CMS can allow the MAC extra time upon request.  

Find the draft MRD LCD here:

https://www.cms.gov/medicare-coverage-database/view/lcd.aspx?lcdid=38778&ver=7&bc=0

Find the 365-day finalization rule here:

https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/pim83c13.pdf

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Nerd note.

The MolDx/Palmetto version of the draft LCD (DL38779) does not have an associated draft billing article.  However, the MolDx/Noridian version of the draft LCD (DL38814) does have a draft billing article which is (DA58454).

The draft article has just a few remarks, being:

MolDX may make available specific forms to assist with test Technical Assessments (TAs). Please follow the instructions on the MolDX website to assist with this process. If such forms are available that pertain to the test type in question, these forms are required for successful coverage determinations.

For patients with cancer, the unit of service for this type of test is 1.

For patients without cancer, testing may not be performed more than once in a month; schedules are set based on the validity established of the individual test.

Billable codes are 81445, 81450, and 81479; not 81455, because MolDx never uses 81455.

An Early Application for AI: Flagging Slides for Priority Review

Even as AI moves ahead quickly, both in radiology and in pathology, the exact applications or use cases have been under development.  Do we use AI to confirm if a diagnosis is correct?  To provide a "second reading" of benign slides, as a backup?  Other uses?

One general use case that has emerged both in radiology and in pathology is pre-reading large numbers of tests (whether CT of the head or digital prostate slides) and flagging slides for priority review.  A couple of these applications in radiology have not only been FDA-approved, but have garnered extra Medicare inpatient payments (under the 3-year New Technology Add-on Payment rules).  See CMS NTAP for Avicenna.AI's CINA HEAD software for stroke (here).

Here we have the use case brought through FDA approval, and for pathology.  

PAIGE-AI garners FDA clearance for a tool to flag likely positives among prostate cancer biopsies, assuming the data is available as digital files.   The use case is clever because it provides clinical value (faster diagnosis for positive cases) while not directly affecting the pathologist's (or radiologist's) diagnosis, so it shouldn't create false negatives or false positives in actual sign-outs.  However, collateral data for PAIGE.AI suggested it increased actual (true positive) cancer diagnoses by 7%.

See the FDA press release here.  This was a De Novo clearance.  Typically, FDA posts clearance paperwork and reviews within a few weeks of a device approval.

See an article by Elise Reuter at MedCityNews here.

See home page for Paige.AI here.

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Paige previously had FDA clearance for its full-slide imaging system, prior to the addition of the AI software.  Here; K201005, using 21 CFR 864.3700.

CMS Posts Final Gapfill Rates for CY2021 Codes Under Gapfill

CMS has published the final MAC Gapfill rates for CY2021, finalizing the MAC gapfill rates initially proposed in May 2021.

Find the rates on this webpage:

https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ClinicalLabFeeSched/Laboratory_Public_Meetings

Scroll down to the header, GAPFILLING DETERMINATIONS, and see the file, "2021 CLFS Gapfill Final Determinations."   (I had to reload my screen a couple times for this to appear.)

To read about today's proposed CLFS prices for NEW codes, to be used in 2022, see here.

Initial Findings

There were 53 codes in the gapfill process.  By reference to tab 2, "Rationales," 20 of the 53 codes received pricing comments over the summer, because they have some kind of rationale remark in response.  

• Four codes were revised at enough MACs to change the median rate calculation (0156U, 0165U, 0178U, 0219U).   
• That's it.
• All the other codes were not revised, suggesting that gapfill prices are pretty "locked in" when first published in May.
• Most codes had no changes anywhere, despite CMS having logged comments.
• One code had changes "at some MACs" but not enough to change the median.

CMS notes that two codes were transposed (0206U, 0207U). These are quite different, 206U being $2215 and 207U being $511.  However, both of them belong to the same lab and are closely related processes.

The 4 revised codes were...

0156U - SMASH, NY Genome Center, NGS cytogenomics, $1740.  Up from $597.

0165U - Verimap peanut allergy, $463.   Up from $218.

0178U - Other Verimap peanut allergy test, $459.   Up from $218.

0219U - Gene analysis of HIV, $725. Sentosa, Vela Dx.   Up from $386.  

Codes 0152U (Karius Test) had a price elevation in the NGS MAC states from $2126 to $2919, but because other states didn't change, the national median remained $2126. 

Gapfill Appeals

CMS states, "Once we post the final MAC-specific gapfilled amounts to our website, we accept reconsideration requests on the final gapfilled payment amounts for new and substantially revised test codes for 30 days."  

There isn't much published on this; you just write up your complaint and submit it to CMS promptly.  

Does CMS really change gapfill prices in October based on this "final gapfill price appeal?"  Yes, it happens maybe once a year.   But there's no public data for how many companies submit appeals, so there's no way to estimate the odds of success.

Can CMS lower your price, when you appeal for an increase at this point?  I can't think of a case where a gapfill price has dropped between the "final" September price and the end of the year, that can be attributed to a stakeholder appeal of the September price.  But I'm not sure that it's impossible, so one might consider losing ground during the final gapfill appeal as a low but nonzero risk.   

 

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CMS initially said in the "comment rationales" that 0016U was priced as it was, because it was similar to "81452," a non-existent code (a typo), later revised to "81542," a prostate gene expression test.

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Change Tally.

  12 codes - no change is warranted.

  1 code - "Similar to 81452" - and no change.  

13 codes - no change was warranted.

2 codes - transposed, but belonged to same owner (0206U, 0207U)

1 code - some MACs changes, but no median change (0152U)

4 codes - price changed.

13+2+1+4 = 13+7 = 20.

Meaningful changes = 4/20 commented = 20%.

Meaningful changes = 4/53 codes under gapfill = 8%.

Very Brief Blog: IQVIA Issues 71 Page 2021 Report on Digital Medicine

The consultancy IQVIA has released a 71-page new report on digital medicine trends in 2021 and outlook for 2022.  Find the report online here;

  https://www.iqvia.com/en/insights/the-iqvia-institute/reports/digital-health-trends-2021

The online webpage also provides graphics and data for several of the key findings.

Earlier today, September 22, IQVIA held a one hour webinar which first summarized the report and then hosted a panel of experts.   It may be available on replay.   Try here.  Experts this morning included Meg Barron, VP of Digital Health Strategy for AMA, Jennifer Goldsack, CEO, Digital Medicine Society, Andy Molnar, CEO, Digital Therapeutics Alliance, Marc Sluijs, Digital Health Network.

Big News: CMS Posts Proposed Lab Prices for CY2022 New Codes

Update, for final November prices, here:

http://www.discoveriesinhealthpolicy.com/2021/11/cms-publishes-final-decisions-on-new.html

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ORIGINAL ARTICLE

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Every summer, CMS holds meetings on "how to price" new laboratory codes, and each September, CMS releases its actual proposed prices.  Those proposed prices are posted today.

CMS also issued final gapfill prices today, which I handle in a separate blog here.

How To Find the Prices

Here's the web page for lab pricing policy:

https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ClinicalLabFeeSched/Laboratory_Public_Meetings

Scroll down to PAYMENT DETERMINATIONS and find, CY 2022 - Preliminary Payment Determinations.  CMS's excel spreadsheet will come inside a Zip file.

I've also put a Google Sheets version of the spreadsheet in an open access cloud file here.

Separately, on the web page for the lab pricing expert panel - the PAMA Advisory Panel on Clinical Diagnostic Laboratory Tests - CMS has posted the Panel recommendations they voted on July 28-29, 2021.  

Just scroll down for "Panel Recommendations"and find "Recommendations...July 28-29, 2021".  It's a fine-print 9-page PDF.  Highlights of the panel votes are also within column G of the proposed pricing spreadsheet.  

https://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/AdvisoryPanelonClinicalDiagnosticLaboratoryTests

"CMS Disagrees"

99 codes are being priced.  CMS flags where its pricing disagrees with the majority vote of the PAMA panel.  Using a quick tally with the "search word" function, I see 39 + 16 or 57 disagreements between CMS and the panel.  This is higher than typical.  Note that 39 are filed as "disagrees with panel" entirely, and 16 are filed as "agrees with MINORITY recommendation" of panel.  (Glass half full...)

In some cases CMS changes the crosswalk. For example, 860X2 (aquaphorin) was panel voted to 86146 $25, but CMS chose 83516 $11.   

Comment to October 21

The top line of the CMS excel spreadsheet informs us that comments will be accepted through October 21, 2021.   It's not unusual for a substantial number of codes to change prices between the September proposal and the November final listing.

Statistics

Of 58 crosswalked codes, all but three were to single target  crosswalks.  Three were to a sum of 2 codes.  No fractions were used.

Only 3 of the 58 crosswalked codes was crosswalked to a PLA code target.  Two of these were crosswalked to 0001U, RBC epitope analysis by DNA (for rare blood group typing).  The third was crosswalked to 0120U, a Mayo RNA panel lymphoma test.

I tallied 40 gapfill codes; that's on par with last year (not far from half).

CMS lists only crosswalk code targets, not their prices or the proposed price.  You have to hunt and peck between this spreadsheet and the price list spreadsheet to dollarize the amounts.

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Occasionally CMS posts updates and numeric error corrections so always check the original CMS websites.

G0327 - CMS had proposed to price G0327, a placeholder code for future tests screening colon cancer by liquid biopsy of blood.   CMS has simply deleted this code without comment.  Stakeholders had objected that the code had missed regulatory deadlines for inclusion and was no appropriate to crosswalk or gapfill, because no such tests have yet been released.

For the September 2019 release event, 9/27/2019, here.

For the September 2020 release event, 9/22/2020, here.  There were 132 agenda items.

New Review: How Fuzzy and Confusing are FDA Drug Decisions?

See a paper from Stanford with several FDA authors on how FDA makes decisions when the evidence is close.   The paper screens drug applications from 2013 to 2018, finding 912, of which 22 faced multiple review cycles including a flat-out initial denial.  

 The authors conclude that "the FDA has no mechanism to find, or tradition to cite, similar cases when weighing evidence."   They argue that FDA decision pathways and evidence standards were "highly variable."   

The authors argue that a better tradition of "case studies" and systematic approaches would enhance the transparency and reliability of these decisions.

Find the Janiaud paper here.  Find the op ed here.

Dr. Janiaud is at the Meta-Research Innovation Center at Stanford; Dr. Goodman is professor of epidemiology there.   Goodman and John Ioannidis co-led the MRIC.  Dr. Russek-Cohen is retired FDA; Dr. Irony is former FDA, now with Janssen.

Although it's a 2021 decision, outside their scope of 2013-2018 decisions, the authors make several references to the 2021 approval of aducanumab (Aduhelm).  There is also an op ed from Washington University's Joel Perlmutter, who resigned in June from the FDA neurology committee.

Very Brief Blog: Comment by October 15 on the Cancellation of Medicare "Breakthrough Coverage"

In January 2021, the Trump administration finalized regulations that would provide 4 years of Medicare coverage to new devices if they were approved by the FDA Breakthrough Pathway - here.  The title is, "Medicare Coverage for Innovative Technology," or MCIT.

After several intermediate steps, the Biden administration announced on September 13 it intends to entirely cancel the Breakthrough coverage regulations - here.

       (See a listing of all the regulatory steps - here.)

In order to comment the MCIT cancellation, go to this webpage:

• Medicare Program: Medicare Coverage of Innovative Technology and Definition of Reasonable and Necessary (September 14, 2021)
• https://www.regulations.gov/document/CMS-2020-0098-0560

Click in the blue box "COMMENT" in the upper left to register your comment.  Final date is October 15, 2021.

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Note, the box in the upper right, "SUPPORT," is for technical support, not a button for making a PayPal donation to CMS or regulations.gov.

In Memoriam: Dr. Charles Root, Founder of CodeMap

On September 15, 2021, Dr. Charles Root passed away.  He was well-known throughout the laboratory community for his wisdom and expertise.   

Dr. Root, whose original training was in nuclear physics, was a founder of CodeMap, which provides policy guidance, analytics, and consulting for the laboratory industry.

See the In Memorium announcement at CodeMap, here.   See the CodeMap home page, here.

Very Brief Blog: Dr. Paul Gerrard Joins Veracyte as Medical Director, Managed Care

In an announcement posted on Link In (here), we learn that Dr. Paul Gerrard has joined Veracyte as the Medical Director for Managed Care.  

Dr. Gerrard previously served as a medical director for the MolDx program (here), and most recently, as a Vice President in the McDermott Plus consulting group affiliated with the McDermott Will & Emery law firm.

Online bio here.   Linked In here.  

In other news, Veracyte appointed Joshua Klopper MD as medical director of Endocrinology; he's been with both University of Colorado and Kaiser Permanente.  The executive medical director at Veracyte is Richard Klopper MD.

Very Very Brief Blog: Browse Comments on PFS Rule

Medicare published the proposed Physician Fee Schedule rule in July, with comments running to September 13.  Hot topics including valuation of AI services.

See the original rule here.

See and search the 35,000 comments receive  - here.  

CMS will publish the final rule circa November 1, effective January 1, 2022.

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AdvaMed always has strong comment letters that explain the problem before providing alternative solutions.  That's true again this year. See the 25-page AdvaMed general comment on codes and valuations here, and the special 14-page comment on issues like self-referral, here.

See AMA RUC committee, here.  The AMA's 109-page letter is here.

See College of American Pathologists here.