Brief Blog: OIG Issues Report on How CMS Set its COVID Test Rates

OIG issues an annual report on the Clin Lab Fee Schedule (CLFS) as a whole.  There was also a side report on inappropriate overbilling of code 81408 (a $2000 miscellaneous genetic code that autopaid in some geographies.)

Here's another special report.  OIG reviews how prices were set during the public health emergency (PHE) for COVID testing.

https://oig.hhs.gov/reports-and-publications/all-reports-and-publications/cms-could-improve-its-procedures-for-setting-medicare-clinical-diagnostic-laboratory-test-rates-under-the-clinical-laboratory-fee-schedule-for-future-public-health-emergencies/

OIG asks, for example, whether principals for government procurement were followed (citing to Standards for Internal Controls in the Federal Government (Green Book).)

What OIG Found

Here's the summary by OIG of "What OIG Found."   

CMS’s procedures for CDLT rate setting could be improved for future PHEs. Specifically, CMS could improve its: (1) communication with laboratory associations and the MACs’ pricing coordinators, and (2) procedures to provide the MACs with additional flexibility when they set interim CDLT rates to respond to a PHE. Neither the Clinical Laboratory Fee Schedule statute (CLFS) nor its implementing regulations specifically address how pricing coordinators could quickly set rates for new CDLTs before the lengthy public consultation rate setting process. Normally, CMS fills that delay by using its longstanding MAC interim rate setting policy. Accordingly, in March 2020, MACs set rates for new COVID-19 viral tests through CMS’s interim MAC rate setting policy. However, CMS had to take additional action beyond its standard rate setting procedures to set and adjust rates for CDLTs.

As a result, CMS’s standard rate setting procedures did not allow the MACs to set rates that were adequate to cover the cost of conducting COVID-19 viral tests for all laboratories during a time when CMS was working to increase testing capacity. CMS may have missed opportunities to obtain important information that could have improved its response to the COVID-19 pandemic from laboratory associations and the MACs’ pricing coordinators when it made decisions about the new CDLT rates.

Here's another quote:

In a statement to USA Today, the CMS Administrator acknowledged that the payment rate initially set by the MACs may have played a role in testing shortages.[fn] The CMS Administrator also noted that a lot of laboratories were not performing the tests and acknowledged that the initial payment rate may have been set too low. 

AI Corner: Chat GPT Discusses CMS Policies vs CMS Hype

This week, an article by CMS policymakers in Health Affairs makes a familiar claim: that 100% of fee for service providers will be in accountable care settings, by 2030.  Find the article here.  (This new one updates us on two earlier articles in 2022 here and here).

I asked Chat GPT 4 a skeptical question about the article, and it provided an answer.  That is, this blog is almost entirely AI-generated.

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BQ:

The article from Health Affairs says that CMS plans to have 100% of providers in accountable care relationships by 2030.   However, i think this is "hype" because they are accounting for fee for service providers who have MINIMAL or DE MINIMUS quality based risk payments, such as a couple percent.   Is my skepticism justified?   Public readers of the statement (100% in accountable care) would expect more and not understand the de minimus aspect.

ChatGPT:

Your skepticism highlights an important distinction in the discussion about accountable care relationships, especially in the context of Medicare's transition towards value-based care models. The statement from the CMS Innovation Center about aiming for 100% of Traditional Medicare beneficiaries and the vast majority of Medicaid beneficiaries to be in accountable care relationships by 2030 indeed sets a bold goal. However, your concern about what constitutes an "accountable care relationship" is valid, particularly when considering the depth and meaningfulness of these relationships in terms of risk-sharing and quality-based payments.

Accountable Care Organizations (ACOs) and other value-based care models are designed to incentivize providers to improve the quality of care and reduce unnecessary costs. These models typically involve some level of risk-sharing, where providers can earn more if they save money while meeting quality benchmarks but might also risk losing money if they fail to meet those benchmarks. However, the level of risk and the proportion of payments tied to quality and cost outcomes can vary significantly across different models and contracts.

In some cases, providers might be in arrangements that technically qualify them as participating in an accountable care relationship, but the financial incentives (or penalties) tied to performance metrics might be minimal (de minimis). For example, a provider might be part of a model that offers a small percentage of payments based on meeting certain quality measures, which might not significantly impact their overall revenue or care delivery practices.

Your observation that public readers might interpret the statement as indicating a more profound shift towards risk-based, quality-driven care than what might actually be happening is astute. While moving all providers into some form of accountable care relationship is a step towards broader adoption of value-based care, the impact of such a shift depends heavily on the depth of the risk-sharing and the strength of the incentives for improving care quality and efficiency.

Thus, your skepticism underscores the importance of understanding the nuances behind such ambitious goals. It suggests that while broad participation in accountable care relationships is a positive direction, the effectiveness of these relationships in driving meaningful improvements in care quality and cost efficiency will depend on the specifics of how risk and rewards are structured.

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Go back to the article and provide us a 75 word summary please.

"The CMS Innovation Center’s Strategy To Support Person-Centered Value-Based Specialty Care: 2024 Update" by Fowler et al. details efforts to transition all Medicare and the majority of Medicaid beneficiaries into accountable care by 2030. The strategy focuses on enhancing specialty care by improving data transparency, fostering collaborations between primary and specialty care, and implementing financial incentives. It involves testing models that support high-quality integrated specialty care, aiming to reduce care fragmentation and improve health outcomes by enabling better coordination and access to specialty care services.

? Medical policy as Potemkin village

AI Corner #2

I asked Chat GPT to write a speech for the leader of CMMI, based on 4 press releases, and then the "leader" also answered a skeptical audience question.

https://brucedocumentblog.blogspot.com/2024/04/chat-gpt-writes-speech-for-cmmi.html

Rare Event: Experts Warn CMS and FDA Against a Test that FDA OK'd in December

In December, I wrote a blog abou the FDA approval of a PGx-based opioid use test, AvertD (here).  I noted there were a lot of oddities, including an FDA panel voting 11-2 against approval.  I noted that company presentations seemed to ask for de novo 510(k), but the approval was PMA, when it came a couple years later.

These particular chickens seem to have come home to roost.  A lengthy list of experts has submitted parallel letters to FDA and to CMS - asking CMS to revoke approval, asking CMS not to cover.

Coverage at Genomeweb is here:

https://www.genomeweb.com/regulatory-news-fda-approvals/experts-urge-fda-cms-revoke-approval-coverage-opioid-addiction

Genomeweb notes that SOLVD is conducting post-approval studies, consults with thought leaders, and has a path ahead which is evidence-based solutions to the addiction crisis.

Coverage at STAT here.  Coverage at NBC here.  At HealthcareDive here.  At New York Times here.

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The FDA letter is here:

https://www.supportprop.org/wp-content/uploads/2024/04/FDA-AvertD-Letter-4.4.24.pdf

The CMS letter is here:

https://www.supportprop.org/wp-content/uploads/2024/04/CMS-AvertD-Letter-4.4.24.pdf

##

AI Corner

Using only the two PDF letters, Claude.AI wrote a "news article" about the story.

FDA Approval of AvertD Genetic Test for Opioid Use Disorder Faces Backlash

In a highly unusual move, dozens of leading experts in genetics, addiction, psychiatry, and public health are calling on the U.S. Food and Drug Administration (FDA) to reverse its recent approval of AvertD, a genetic test that claims to predict risk for opioid use disorder (OUD). The experts have also urged the Centers for Medicare and Medicaid Services (CMS) to deny coverage for the controversial test.

The AvertD test, approved by the FDA in December 2023, analyzes 15 genetic variants to estimate a person's genetic risk for developing OUD. However, in an open letter to the FDA Commissioner and CMS Administrator, the 48 experts argue that the largest and most rigorous genetic studies show AvertD does not actually predict OUD risk.

"Current scientific knowledge about OUD genetics is strong enough for us to state that AvertD does not predict genetic risk of OUD," the experts write. They cite independent analyses showing that with proper controls for ancestry, the 15 variants provide no more predictive power than chance.

The experts raise serious concerns that false negative results could provide clinicians and patients with a "false sense of security" about opioid use, potentially exacerbating the opioid crisis through overprescribing. Conversely, they warn that false positive results could lead clinicians to withhold beneficial opioid treatment and cause patients to face discrimination due to being inaccurately labeled as prone to OUD.

Notably, the FDA's own advisory committee voted 11-2 against approving AvertD last year, with committee members expressing concerns about the test's lack of evidence and potential for harm from false results.

"FDA's decision to approve AvertD despite opposition from geneticists, other experts, and from its own advisory committee, was surprising," the letter states. "Ironically, FDA has touted its approval of AvertD as a step toward addressing the opioid crisis. We believe AvertD may make the opioid crisis worse."

Among the signatories are leaders in addiction medicine and genetics from prestigious institutions such as Johns Hopkins, Yale, Stanford, the University of Pennsylvania, and Columbia University. Also signing are the presidents of National Center for Health Research and Public Citizen's Health Research Group.

The strong pushback on AvertD's approval highlights ongoing concerns about insufficient scrutiny of genetic tests making unproven clinical claims. It remains to be seen whether the FDA or CMS will heed these experts' calls to reverse course on the controversial genetic test.

[Text auto generated by Claude.ai).

White House: Meetings on the FDA LDT Final Rule

Header:  FDA finalized its LDT rule around March 1.  Many meetings have been scheduled via Office of Management and Budget.

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FDA finalized its LDT rule around March 1 - original blog here.

OMB has scheduled fourteen publicly-listed meetings.  If available, the listings include collateral like PDFs submitted.

https://www.reginfo.gov/public/do/eom12866SearchResults?pubId=&rin=0910-AI85&viewRule=true

March 18, 2024 
ADLM (Assoc Dx Lab Med; former AACC) (4 documents including a 58 page Hyman Phelps public comment that the LDT rule is on shaky legal ground)

March 19, 2024  
AMP (Assoc Molec Pathol) (2 documents, including a 19 page deck and a 40-page 2010 report on FDA and innovation)

March 20, 2024
ARUP (3 documents)

March 21, 2024
ACMG (Amer Coll Med Genet) (2 documents)

March 22, 2024
Center for Science in the Public Interest (CSPI), (six documents)

April 1, 2024
ACLA (Amer Clin Lab Assoc) (one document, letter to OMB, 4pp)

April 3, 2024
AHA (Amer Hosp Assoc)

April 3, 2024
AdvaMed

April 4, 2024
Childrens' Hospital Association

April 4, 2024
Coalition for Iinnovative Laboratory Testing
(Also strongly opposed VALID Act)

April 5, 2024
Associatioin of Pathology Chairs

April 8, 2024
Natera Inc

April 11, 2024
Amer Soc Microbiol (ASM)
(Many pathogen tests = LDTs)

April 12, 2024
Coalition for 21st Century Medicine (C21CM)

April 15, 2024
"CRD Associates"

April 18, 2024
College of American Pathologists (CAP)

April 19, 2024
Duke University

AI Corner

I cut and pasted this rudimentary blog into Chat GPT 4 and asked for an illustration.   Below is the machine-generated text as it planned the image.

For a blog header about the FDA finalizing its LDT (Laboratory Developed Tests) rule and the series of meetings with various stakeholders scheduled via the Office of Management and Budget, let's go with a vibrant, engaging illustration. Imagine an illustration that visually represents the intersection of healthcare policy, scientific innovation, and regulatory oversight.

We could have a central motif featuring a stylized image of a magnifying glass focusing on a DNA double helix, symbolizing the LDT rule's focus on genetic testing and diagnostics. Surrounding this central image, we see a series of calendar pages with specific dates marked, representing the scheduled meetings. Each calendar page could subtly feature the logos or symbols representing the various stakeholders (like ADLM, AMP, ACLA, etc.) that have meetings scheduled, implying a broad and collaborative review process.

In the background, we'd have a faint overlay of document pages and PDF icons, hinting at the extensive documentation and public comments involved in the rule's consideration. This mix of imagery would convey a sense of meticulous examination, scientific inquiry, and the regulatory process, all crucial elements of the FDA's rule finalization and the subsequent discussions.

This illustration would serve not just as a visual summary of the blog's content but also as an inviting entry point for readers to delve into the complexities and implications of the FDA's actions and the healthcare community's engagement with these regulations. Let's create this image.

Webinar April 23, 2024: Navigating the FDA LDT Regulation (DECIBIO)

Sign up for an April 23, 2024, webinar from DECIBIO on "Navigating the FDA LDT Regulation."   It's at 9 PT, 12 ET.

Home page here:

https://data.decibio.com/navigating-fda-ldt-regulation-webinar

AI Corner: Chat GPT 4 Offers Local Picture Editing

AI Corner

Header: Chat GPT 4 (the subscription version) has offered image creation since last fall.   Today I see a new feature: You can highlight something in the illustration, and change it locally. [A journalist writes on this topic here.]

##

Chat GPT 4 (the subscription version) offers DALLE3 image creation.  It can follow instructions ("a black and white film noir image of a man in a city alley") or even work from policy materials ("make an interesting illustration for this new FDA press release.")

Today, I see a new feature, a "highlight" tool that lets you give focused revision instructions.

Here is a picture for a story about a bee in a home office:

I used the higlight tool, highlighting the computer monitor, and asked for it to add software.  It made no changes other than adding software.

getting;

I got software, but it looks washed out. 

##

I asked for bolder screen imagery, like a colorful bar chart.

And I got the on screen bar chart, but this time, it re-painted the whole perspective.

Footnote.

Bonus - bee story.

A New 56-Page Law Journal Article about LDT Regulation and Claims (Gilmore, 2024)

A new 56-page article about "The Wild Wild West" of LDTs, by legal scholar John Gilmore.  Find it online at Washington & Lee Law Review, here:

https://scholarlycommons.law.wlu.edu/wlulr-online/vol81/iss4/1/

Regardless of test development paradigms, Gilmore focuses his discussion on issues regarding misleading or excessive claims.

AI Corner

While Gilmore's abstract is easily available at the link above, here's a Chat GPT 50 word summary.

• Gilmore's article discusses the regulation and concerns surrounding Laboratory Developed Tests (LDTs), focusing on liquid biopsy tests for cancer detection. It outlines the challenges posed by the lack of comprehensive regulation under current U.S. law, specifically under the FDA and CMS frameworks, leading to potential risks to public health. 
• The document highlights the need for a multi-faceted approach to address these issues, including revising legislation, applying specific court decisions, and expanding FDA regulatory power. This approach aims to balance the benefits of LDTs in healthcare with the need for public protection and the encouragement of research and development in diagnostic testing.

FDA LDT Rule: Why May 22 is an Important Deadline, and Why it Isn't

Header:  Much talk about May 20 as a "CRA" Congressional Review Act deadline for an FDA LDT final rule.   But it may be less than it seems.

##

If you track the FDA LDT proposed regulation, you've probably heard about May 22, 2024, as a magic date by which FDA will finalize the rule.  What's up?   

The date points to the Congressional Review Act, or CRA.   When an agency proposes a new regulation, Congress essentially has a few months to annul it through a special procedure.   The CRA will cancel a new regulation, if the canceling motion is passed by a majority of both House and Senate and signed by the President.  See discussion at "The Nickel Report" here.   

As explained in that article, if new regulations are passed after May 22, 2024, they will be "new enough" that the new Congress (House and Senate) and new President (if that happens) can reject the regulations by CRA.  If regualtions are passed BEFORE May 22, 2024, they will be "old enough" that a CRA action in 2025 won't be available any more.

The CRA dates to 1996 (see 2023 update from Congressional Research Service here.)

##

As of the 2023 CRS report, the CRA had been used once in 2001, 16 times in 2017, and 3 times in 2021.  The CRA is relatively speedy since it requires a simple majority for a "joint resolution."

##

With regards to the FDA LDT rule, if we have a Republican House and Senate, and they care enough about the LDT regulation to undo it with CRA, it would still have to be signed by the President, and if we have the same President, he might be unlikely to do so.

##

Even without the CRA, and regardless of the date of the FDA final rule, a new administration could undo it without iinvoking the CRA or requiring agreement on the Hill.   For example, if it wanted to (and I don't have an opinion on that), a Trump administration could appoint a new Comissioner of FDA and they could put out a regulation reversing the FDA LDT regulation.   It would have to meet pro forma requirements, specifically, having a discussion of the reason for the reversal, and take public comment for 30 days, but it's not technically difficult.   If the FDA LDT rule is completed in the next few weeks, and therefore falls outside of the CRA (not for this Congress, but for the next one), the FDA LDT rule could still be undone through rulemaking.

##

Even without a rulemaking reversal, and regardless of the makeup of Congress, the FDA LDT regulation is likely to have a legal challenge, and a new administration could determine it will not fight, or do little to fight, the legal challenge by the rule's opponents.  Attorneys like lab policy expert Dr Roger Klein have opined the legal challenge has a good chance of achieving an injunction (here).

FDA LDT Rule: ASM Weighs In (Amer. Soc. Microbiology)

At multiple points in the current FDA-LDT regulation process, American Society of Microbiology has weighed in with serious concerns.  Here's the latest, from March 18, 2024.   (See right sidebar at the webpage for more ASM links).

https://asm.org/Articles/Policy/2024/March/Op-Ed-Proposed-LDTs-Rule-Threatens-Outbreak-Contai

ASM writes in part,

• From tuberculosis to dengue to malaria, we have no option but to use LDTs to detect pathogens of major public health importance. In the era of growing antimicrobial resistance, our reliance on LDTs to detect highly antibiotic-resistant superbugs will only increase. 
• 
  
• The FDA’s proposed rule will erode our capacity to respond to emerging pathogens or even the next pandemic—and it will come at a time when we need more, not less, front-line innovation. In our work, we’ve long seen LDTs at the leading edge of patient care, whether it’s life-or-death diagnoses, outbreak containment or access to testing.

Video Series: Reimbursement Landscape Videos, at Medical Device Innovation Consortium (MDIC)

New at Medical Device Iinnovation Consortium (MDIC), see a series of video segments that update you on different aspects of reimbursement.

Topics include "Navigating the Coverage Landscape," "Navigating the Coding Process," and more.

Find them together at the link:

https://mdic.org/news/navigating-the-us-public-payer-reimbursement-landscape/

Evaluating Evidence is Subjective: In JAMA This Week

Header: JAMA Health Forum (open access) has a lead article, "The Subjective Interpretation of the Medical Evidence," by Bauchner and Ioannidis (BU and Stanford, respectively.)

##

https://jamanetwork.com/journals/jama-health-forum/fullarticle/2816950

Opening paragraph:

Experts often subjectively disagree on how they interpret the same evidence and what recommendations they derive from it. Meticulous processes to resolve diverging views in guideline development efforts, for example, may not remove subjectivity. Even the most prestigious organizations sometimes have different guideline recommendations. Subjective disagreements can be common, extreme, and unsettling when evidence is limited and rapidly evolving—as in many questions related to COVID-19. However, subjectivity exists, and differences ensue even for common diseases where evidence has accrued and been evaluated for decades. For example, the American College of Physicians, the American Cancer Society, and the US Preventive Services Task Force (USPSTF) vary on when to initiate screening for colorectal cancer and the preferred screening methods. Breast cancer and depression screening recommendations have been debated for decades.

Closing:

Therefore, the public should be reminded that uncertainty—and even the extent of uncertainty—is common. This realization is not paralyzing; medical decisions can still be made with the best available evidence, once values, preferences, and biases are carefully vetted.

##

Cited by JAMA alongside this article, include:

• NCCN Guidelines for accelerated approval cancer drugs.https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2811820
• What do we know about LDCT lung cancer screening after 20 years?https://pubs.rsna.org/doi/10.1148/rycan.2020190058
• Bauchner had a separate article on the same topic, in JAMA Open Network 2023, here. 
• It was tied to articles about hype in abstracts about research, even when scoped down to NIH funded studies.

###

AI CORNER with Chat GPT 4

AI summarizes 7 takeaways of Bauchner & Ioannidis.

1. Subjective Disagreements in Medical Guidelines: Experts and guideline committees often subjectively interpret the same medical evidence differently, leading to divergent recommendations even for well-studied conditions such as colorectal cancer and breast cancer screening.
2. Specialist vs. Generalist Perspectives: Specialists and generalists may value different aspects of evidence, affecting guidelines. For instance, the USPSTF's recommendations may differ from those of specialist societies due to different evaluation criteria and emphasis on certain types of evidence, like randomized clinical trials.
3. Impact of Legal and Policy Considerations: Recommendations may be influenced by their potential impact on insurance coverage and policy, with entities like the USPSTF being particularly aware of the implications of their guidance under laws like the Affordable Care Act.
4. Methodological Differences in Guideline Development: The approach to developing guidelines, including how evidence is synthesized and evaluated, varies significantly among organizations, contributing to inconsistencies. Techniques like the GRADE approach aim for reproducibility but still encounter variability.
5. Financial and Ideological Influences: Financial support from the industry and allegiance bias among guideline committees and advocacy groups can shape recommendations, with contentious areas such as COVID-19 and cancer screening being particularly susceptible.
6. Role of Subjectivity in Weak Evidence: In areas where evidence is limited, subjective opinions heavily influence recommendations, highlighting the challenge in balancing emerging evidence with existing treatment options, such as in the management of obesity in adolescents.
7. Misinformation and Public Trust: The subjective interpretation of medical evidence extends beyond professional circles to media and public discourse, contributing to misinformation, polarized views, and a decline in trust in medical science. This underscores the need for clear communication about the uncertainty and quality of evidence behind medical news and guidelines.

GPT4 illustrates Millar 2023 on Hype (Cited in Bauchner 2023 JAMA Open Netw)

Brief Blog: CMS Creates a New ADLT Test (Naveris NavDx, H&N Cancer)

Header: After creating just 4 ADLT tests in 2022/2023, CMS opens the first quarter 2024 with a new ADLT test, from Naveris, for Head & Neck cancer.

##

Background

Just last week, I wrote an update on the history of ADLT tests, a special pricing category created by Congress in 2014.  Iin a decade, there were only about 15 ADLT tests created.  ADLT's must be sole source tests that are either FDA approved (like Foundation Medicine F1) or covered tests of the MAAA type that provide "unique clinical information."  The update blog included at bottom an elaborate chart of all things ADLT.   Here.   Read about the elaborate application process for ADLTs, here.

New ADLT Code

On March 18, 2024, CMS created a new ADLT, code 0356U, NavDx from Naveris.  PDF here.  Classification as ADLT removes 0356Ufrom the current year gapfill process.  (Gapfill had been requested by Naveris last summer, endorsed by the CMS expert panel, and decided by CMS).

The price the first nine months starting April 1 will be $1800.  After that, the price will reset annually to the median of NavDx commercial payor prices.

Ins and Outs

According to my December 2023 blog, at the time Naveris announced LCD coverage under the MolDx MRD LCD, MolDx's online directory "Dex" listed the locally-set price at $900.  Here.  That would have been the result of a spreadsheet and rulebook that MolDx calls its "EPM, Equitable Pricing Model."  The price I see in DEX today (March 25, 2024) is $827. (Click to enlarge).   I believe that on April 1, MolDx will delist that local price and instead say "See CPT code" which means the CMS CLFS fee schedule which will in turn display the $1800 just-set ADLT price.

click to enlarge

DEX: Not Just a Code Directory

Note that the DEX page includes not merely a description of the test, but a summary of its Medicare-covered use(s).   Here, the test is covered as an MRD test both for surveillance (if it recurs) and to detect if MRD shows "residual" cancer, presumably (I think) at a timepoint that is shortly post-surgical or post-{XRT-chemo}. 

DEX: Oncology (oropharyngeal and anal), cell-free DNA, droplet digital PCR to profile the fragmentation pattern of tumor tissue modified viral (TTMV) HPV DNA using 17 DNA biomarkers, weighted fragment size distribution algorithmic analysis, whole blood, algorithm reported as a prognostic TTMV risk score for cancer recurrence. (NavDx(r), Naveris Inc.) The intended use of the test is for monitoring patients with previously diagnosed HPV-driven head and neck cancers for recurrent and or residual HPV-driven oropharyngeal cancer.

##

ddPCR:  Big Impact on CMS Policy!

This is one of relatively few tests for MRD that use "droplet digital PCR."  Because it does not use next generation sequencing, MolDx isn't bound by the outdated rules against serial testing of the CMS NGS NCD (NCD 90.2).   I discussed how outdated 90.2 is, in the context of a new massive ARPA-H grant, recently here.

Here's the AMA PLA code text:

Oncology (oropharyngeal) evaluation of 17 DNA biomarkers using

droplet digital PCR (ddPCR), cell-free DNA, algorithm reported as a

prognostic risk score for cancer recurrence.

###

• News sources for ADLT at Genomeweb.  
• Naveris ADLT press release here.
• Coverage at Genomeweb last fall re the then-new coverage at CMS here.  
• Naveris recently announced a large-scale H&N cancer registry, here.   

For anyone who thinks there is a quick one-and-done pathway to Coverage, see the extensive listing of Naveris clinical accuracy publications here.

Very Brief Blog: FY2025: Budget in Brief for HHS

Header:  Congress just closed the FY2024 budget authorization (due last fall.)  Now, proposals for the FY2025 budget for this coming October are circulating.  What the Administration plans for HHS divisions.

##

The Biden administration, looking ahead to the budget year October 2024 to September 2025, foresees $1.7T in HHS mandatory budget authority and $130B in discretionary spending.  Mandatory spending is, e.g., Medicare patient benefits.

Find it here:

https://www.hhs.gov/about/budget/fy2025/index.html

The "Budget in Brief" is a formidable 182 pages.

https://www.hhs.gov/sites/default/files/fy-2025-budget-in-brief.pdf

The budget for CMS is here:

https://www.cms.gov/about-cms/performance-budget/current

At CMS, see in particular the FY2025 327 page PDF:

https://www.cms.gov/files/document/fy2025-cms-congressional-justification-estimates-appropriations-committees.pdf

The CMS budget opens with an org chart updated to March 1, 2024.  The Center for Medicare is budgeted for 820 staff, up from 780 (p 228 actual pdf page).   The CMMI is listed with a 0 staff on this page but 626 on page 325.   On page 36, CMS notes that its operations budget has increased by 3% while there was a 23% loss of purchasing power due to inflation.   Budget for parts A and B (p. 37) is about $900M.   

I noted recently that ARPA-H is worth tracking closely for its groundbreaking $400M cancer biomarker discovery program, here.   FInd the ARPA budget page here, including the new 2025 budget plan here (51pp).  The molecular evolution program is at ARPA-H page 35, where it is called the ADAPT program (ADvanced Analysis for Precision Cancer Therapy).

##

60-page OIG budget here.

Resources: The 3-Hour Congressional FDA LDT Hearing on March 21, 2024

On March 21, 2024, the House Energy & Commerce committee held a 3-hour hearing on the FDA's plan to regulate LDTs.  Here are some resources, including a Zip file with all major documents.

###

The three hour session is online at YouTube here:

https://www.youtube.com/watch?v=sQOYPjdTMzU

(The YouTube program notes give access to an online YT auto transcript).

The House home page for the hearing is here:

https://energycommerce.house.gov/events/health-subcommittee-hearing-evaluating-approaches-to-diagnostic-test-regulation-and-the-impact-of-the-fda-s-proposed-rule

(Click on Hearing Announcement, Hearing Memo, and View Agenda).

Presentations included 

• Susan Van Meter, President, ACLA
• Zach Rothstein JD, AdvaMed Dx
• Donald S. Karcher MD, President, CAP
• Jeff ALlen PhD, President & CEO, Friends of Cancer Research
• Dara L. Aisner MD PhD, "Academic Coalition for Effective Laboratory Tests" (academic LDTs)

An excellent rapid online summary was posted by Joe Lennerz MD PhD of BostonGene, at Linked In.

https://www.linkedin.com/feed/update/urn:li:activity:7176512644672036864/

Note that Lennerz's article includes an 11-slide summary that includes each speaker's main points ("Summary of Witness Testimony").

See subscription reporting at Genomeweb here.

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AI CORNER - TESTMONY IN BRIEF

Here is a Chat GPT summary of the 3 adverse comments, ACLA, CAP, Acad LDTs:

https://docs.google.com/document/d/1c6_NstX3exeYDmoEjQ1Z1CLx4V1qxZapI7-MBCf3HcU/edit?usp=sharing

Here is a Chat GPT summary of the 2 favorable comments, FOCR, AdvaMed:

https://docs.google.com/document/d/1N3_UFFyJ_WZq8za_Tnq4ZRku5_vam7mTyd-2t7q1u60/edit?usp=sharing

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AI CORNER - FULL 3 HR AUTO SUMMARY, AUTO TRANSCRIPT

Find a Google doc with an Otter.ai Auto-summary and next, the 60-page full Auto-transcript here:

https://docs.google.com/document/d/16yoaYZE2cpdq6pzpRYSDq_eXjzfEkgdkvIL98WTxaEk/edit?usp=sharing

Direct  shared access to Otter.ai auto transcript here:

https://otter.ai/u/H9L-Um_RvSARI_g_BNIEcNdROn8?utm_source=copy_url

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EASY CLOUD ZIP FILE SUPER BUNDLE

I have included a ZIP file with all FDALDT testimony and reference documents, plus a 62 page auto summary and auto transcript.  Open access to the ZIP file here:

https://drive.google.com/file/d/1UZW0Vz7MIzlZIYcHo2g2QMOgQaHAmvT-/view?usp=sharing

##

OTHER

Chairman Cathy McMorris Rodgers(R-WA) gave opening remarks.

https://energycommerce.house.gov/posts/chair-rodgers-opening-remarks-on-the-regulation-of-diagnostic-tests

Subcommittee chair Brett Gurhrie (R-KY) gave opening remarks:

https://energycommerce.house.gov/posts/subcommittee-chair-guthrie-opening-remarks-on-the-regulation-of-diagnostic-tests

AI CORNER - Summary of "Both Opening Remarks"

Summary of Opening Remarks

Subcommittee Chair Guthrie's Opening Remarks on the Regulation of Diagnostic Tests

Subcommittee Chair Brett Guthrie opened the hearing by addressing concerns over the FDA's proposed rule to regulate laboratory developed tests (LDTs) as medical devices, potentially impacting access to reliable diagnostic tests for children and patients with rare diseases. He outlined the historical context of diagnostic test regulation, highlighting the split oversight between the FDA and the Centers for Medicare and Medicaid Services, and the 1988 Clinical Laboratory Improvement Amendments (CLIA) which aimed at ensuring test accuracy and reliability.

Guthrie emphasized the significance of LDTs in various medical and public health applications, including cancer treatment and drug trafficking monitoring. He criticized the FDA's attempts to reform LDT regulation, arguing that the proposed rule would limit labs' flexibility to modify tests, potentially leading to higher costs and stifling innovation without necessarily enhancing patient protection. He expressed concern over the rule's unintended consequences, such as increased consolidation among testing providers and adverse impacts on personalized medicine and disadvantaged populations. Guthrie called for Congressional engagement with the public health community to address diagnostic testing challenges without compromising innovation.

Chair Rodgers's Opening Remarks on the Regulation of Diagnostic Tests

Chair Cathy McMorris Rodgers critiqued the FDA's proposed rule on LDT regulation for potentially stifling biomedical innovation and delaying patient care. She stressed the importance of LDTs, especially for rare diseases and certain cancers, and voiced concerns over the rule's impact on laboratory operations and costs. Rodgers detailed the burdensome nature of the proposed regulations, predicting significant financial strain on labs and restricted access to tests for vulnerable populations.

She contrasted the FDA's estimate of the number of LDTs affected by the rule with the agency's capacity to review premarket submissions, suggesting the rule would lead to fewer diagnoses, higher costs, and delays in care. Rodgers called for a reevaluation of the rule and expressed interest in exploring legislative alternatives to the proposed regulatory approach, emphasizing the need to maintain America's leadership in biomedical innovation and ensure timely patient access to necessary diagnostic tests.

CMS Reveals: One ADLT Application in Three Fails

"ADLT" is a narrow, special class of lab test with special pricing.  About 15 of 23 applications for this status have succeeded.  About 1 in 3 goes belly-up.

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What are ADLTs?

Created by the 2014 PAMA legislation, ADLT means advanced diagnostic laboratory test.  However, it's not "advanced" in  a general sense.  It's a very specifically defined category.  Applicable tests skip the crosswalk-gapfill pricing process and are paid list price, and then, an annually reset market survey price.

See an ADLT CMS web page:

https://www.cms.gov/medicare/payment/fee-schedules/clinical-laboratory-fee-schedule-clfs/adlt-information

Two Types of ADLTs

ADLTs are always sole-source tests.  Meeting that rule, they may be (A) multiple analyate tests with algorithms that are covered by Medicare, and are clinically unique; or (B) FDA cleared or approved tests.

There are about 15 ADLT tests created over five years, via an application to CMS and CMS approval. (See web page above).

What's New: The Pass Fail Rate Revealed

You can't tell how many applications for ADLTs that CMS has received.  At least 15, since 15 succeeded.  But 15 out of how many?   20?  30?  40?   No way to know. (*).   

At the American Clinical Laboratory Association meeting, March 14, 2024 in DC, CMS official Jason Bennett spoke about the process.  He's director of the "Technology, Coding, and Pricing Group" at CMS.  He described the ADLT procsss and remarked, there have been about 22 or 23 total applications.  That means the failure rate is about 1 in 3.   The most common cause of failure is not proving the test provides unique clinically valuable information.   The sole source lab requirement can also trip up some applicants.

Timetable Starts to Slip

CMS promised to turn around the ADLT application, which merely reviews a few rules, in a month or so.  However, lately, some applications have taken over a quarter.  Bennett mentioned this and attributed it to short staffing and budget caps.

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(*) In 2023 I requested copies of all the applicaitons (turns out, there are 22 or 23) via FOIA.  I haven't got this yet.   PAMA price information is shielded from FOIA, but as CMS remarked in PAMA rulemaking, ADLT applications are not (but some internal biz info could be blacked off).

Nerd Note

PAMA statute only required ADLT tests to be multi analyte, algorithmic tests, covered by Medicare. 

During ADLT rulemaking, CMS on its own added the requirement that an ADLT MAAA test must be clinically unique.   (That factor doesn't apply that to the FDA-approved ADLT tests).  

ADLT-ology

The table below (click to enlarge) shows ADLT codes, whether FDA approved, year of first price, current price (01/2024), price delta if any, and CMS Pt B payments in CY2022 (data from 9/2023).

click to enlarge

CY2022 Pt B payments for ADLT codes were $265M, of which 64% went to FDA-approved ADLT codes.   The three largest ADLT codes were over $50M and comprised 76% of the dollar volume for all ADLT codes.

(This concentration of most ADLT spending in the top 3 codes mirrors the concentration of most PPLA code spending in the top several codes and most Category III spending in the top several codes). See my August 2023 blog.