PAMA 216 Rulemaking Has Left HHS; Under Review in Executive Branch

PAMA Section 216 is the massive overhall of the Clinical Laboratory Fee Schedule, passed 24 months ago by Congress.  The legislation told CMS to have final rulemaking in place by July 1, 2015.  The proposed rulemaking was not released until last fall.  

The final version of the implementation was received at the White House Budget Office on April 21, 2016, per "Inside Health Policy" (subscription, here) and Bloomberg News (here).   See also McDermott Plus Consulting, here.  The executive branch regulatory information site is here.

A "Hiccup" for Digital Drugs: FDA Postpones Oral Abilify/Pill/Transmitter

One of the fiercest problems in healthcare is poor compliance with medications that actually work.  Industry is now on the edge of producing pills with tiny embedded transmitters in the tablet.  However, it won't be as fast as Otsuka and Proteus Digital Health hoped.  According to an April 26, 2016, press release, the FDA issued a complete response for their combination product with Abilify and an ingestible sensor.  The FDA asked for more information about the product "under the conditions under which it is likely to be used."  Press release here.   The issue has implications for the coordination between CDRH and CDER, the FDA's framework for digital health, and how regulatory approach the regulatory science and risk/benefit uncertainties of new generation products.   Trade press here and here.

Advisory Board Gives New Meaning to "One Pager:" Field Guide to CMMI

A typical one pager is supposedly all an executive (or President) has time to read, and a Field Guide is typically a map or atlas of birds, flora, etc.   Advisory Board has produced a 12-topic "field guide' to the CMMI / Center for Medicare & Medicaid Innovation and a couple other CMS payment reform programs.  Screen shot below.   Full PDF available at Advisory Board, here.   Home page for the project, here.

Medicaid Managed Care Final Rule; Implications as we see "Medicaidization" of Health Care

On April 25, 2016, CMS released the massive (1425 page) Medicaid Managed Care final rule.  This is the first update in many years and reflects CMS's acknowledgement that Medicaid is transforming from a classical state-managed system to an outsourced, commercially managed, managed care system with exceptional budget constraints.

The rule is here.  An insightful summary by health policy guru Timothy Jost, online at Health Affairs, here.  More after the break.

MACRA Draft Rulemaking Released; "Reforms" Meaningful Use Mess; Attention for Socioeconomic Status

On April 28, 2016, CMS released 962 pages of rulemaking for MACRA, the physician payment reform passed by Congress last year.   MACRA began by turning off the SGR formula for physician payments ("the doc fix") but gave CMS wide ranging authority to change physician incentives under new schemes that offset much larger upside bonuses with much larger penalty risks.

• The rulemaking is here (81 FR 28162, 5/9/2016)
• A Health Affairs short summary overview is here.  Advisory Board provides "ten key takeaways," here.   For a blog on the patient engagement framework, here.  For a 7-point blog on the HIT framework, by John Halamka, here.  For an article and links see HiTech, here.  For a rundown at Dive Healthcare, here.
• A CMS blog that discusses the need for, and approach to, EHR incentive reform, is here.  The term "meaningful use" is dead.  Long live the term, "Advancing Care Information" or ACI.
• Even more CMS fact sheets and summaries are online at CMS, here.  And don't miss the CMS YouTube animated infomercial, here.

More after the break.

430 Pages of Interviews with CMS Leaders

430 pages of interviews with CMS leaders.

Either this sounds like great summertime beach reading to you, or it doesn't.

Read a blog about the interview series, at Health Affairs, here.   For the National Academy of Social Insurance website about the interview effort, webpage here, press release here.   The 430 page PDF is online here.

For a 12-page, 32-question multiple choice Medicare quiz, here.

CMS Releases "Only Lightly Redacted" Versions of Theranos Audits

Truncated or heavily redacted versions of Theranos inspection reports have circulated in recent weeks, and have been posted at Wall Street Journal and elsewhere.

On April 25, the Wall Street Journal posted newly released, only lightly redacted documents.   A November 2015 inspection report is here.   A March 2016 letter describing potentially very severe sanctions is here.

The second letter carries the headline, "Important Notice - Please Read Carefully."

The WSJ writes in part,

Theranos ran tests on the [Siemens Advia 1800] by diluting small samples of blood pricked from patients’ fingers to increase the samples’ volume to fit Advia’s volume requirements, according to former employees. Ms. Holmes denied in October that Theranos diluted blood samples before running them on traditional machines. Since then, the company has declined to comment on the matter.

For additional links to Theranos journalism online, see www.tinyurl.com/theranoslinks

The Mess That Is MACRA? Two Views in the Same Week

In Spring 2015, Congress passed Medicare Part B payment reform - the SGR fix or Doc Fix - in a bill called MACRA.   In addition to turning off the accounting Tower of Babel that had been the Sustainable Growth Rate formula, the MACRA legislation creating a new...well, Tower of Babel which is a very complex physician reward and penalty system.   The maximum rewards and penalties are much higher than under prior piecemeal reward systems like "PQRS" and "EHR Meaningful Use."  Policymaking to implement these systems is still underway at CMS.

This week, two interesting and contrasting reviews of MACRA appear. The first one, at Health Affairs and written by staff at Urban Institute and supported by Robert Wood Johnson - here.  It has the generic title, "Medicare's New Physician Payment System."  Available as a long blog or a well-illustrated 7p PDF.

The second is penned by attorney and CMS expert Kip Sullivan and appears at THCB, The Health Care Blog.  It has the more provocative title, "The Mess That Is MACRA."   Find it here.  Sullivan writes,  "MACRA is so devoid of details about each compartment that it is impossible to predict anything" and has a section titled, "Sandcastles on top of sand castles."

For a September 2015 post by Medicare's senior management on MACRA rulemaking, see here.  

In March 2016, the House held a hearing on MACRA implementation, here for a news post at American College of Radiology (ACR) and here for archived documents and video at House E&C.

News Tidbit: FDA Backs Off A Sole-Source LDT Enforcement Effort

News tidbit.  In November 2015, the FDA sent Interleukin Genetics (Waltham, MA) a formal letter finding that the FDA had no records of FDA review, clearance, or approval of its LDT test "PerioPredict."  FDA letter to the comapny here; Genomeweb here.

This was about 24 months after Interleukin issues a policy statement comparing its LDT tests to the LDTs tests offered direct to consumer by 23andMe (here.)

On April 5, 2016, Interleukin issued a press release that via discussions with FDA, PerioPredict had been confirmed as the type of genomic LDT that was currently under enforcement discretion (here).  Interleukin's press release is fairly detailed and worth reading for those with an interest in this field.

Interleukin Genetics is a small independent company which trades over the counter and has a current market cap of $19M (ILIU; here).  It had total revenue of $1.4M in CY2015 and an operating loss of $7.9M.  

Dueling Publicity: FDA LDT regulation, Congressional LDT regulation

In the last couple days, the P.R. battle on FDA regulation of LDTs continues.

PRO FDA LDT
In an Op Ed for THE HILL (here), the President of the American Cancer Society Cancer Action Network insists that "the FDA is the most appropriate agency to evaluate the validity of these diagnostic tests."  ACS/ACN urges that attempts to derail the FDA on the hill should be avoided.  Specifically, a rider to an unrelated bill would have blocked the FDA from using its funding to regulate LDTs.  See text at bottom.

AGAINST FDA LDT
At the same time, according to the subscription journal Gray Sheet, "house appropriators"  told the FDA to "suspend further efforts to finalize LDT guidance" and "work with Congress on a new regulatory pathway."   Here.   Week by week currently, the House E&C commmitee is working on draft legislation modeled on the Diagnostic Test Working Group Proposal (DTWG).  For an open access review at Genomeweb, here.

PRO FDA LDT
According to Gray Sheet, Rep. DeLauro (D-CT) and Beutler (R-WA) protested the amendment, and support a rollout of FDA regulation, just as ACS/ACN does.  Similarly, American Association of Cancer Research (AACR) supports FDA regulation of LDTs (here) and cosponsors a public workshop on approaches to FDA regulation of liquid biopsy cancer tests in July 2016 (here).

Some further details after the break.

CMS releases annual spring inpatient rulemaking

On April 19, 2016, CMS issued its annual spring festival of proposed inpatient rulemaking.  This year the PDF weighs in at 378 pages, here.  See 81 Fed Reg 24946, April 27, 2016.

Centers for Medicare & Medicaid Services 42 CFR Parts 405, 412, 413, and 485 [CMS-1655-P] RIN 0938-AS77 Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2017 Rates; Quality Reporting Requirements for Specific Providers; Graduate Medical Education; Hospital Notification Procedures Applicable to Beneficiaries Receiving Observation Services; and Technical Changes Relating to Costs to Organizations and Medicare Cost Reports. 

The new technology add on payments section is a bit longer than usual, and discusses 9 products (including those continuing from last year).  These are the MAGEC spine bracing system, MIRODERM wound matrix, Idarucizumab [Praxbind, anticoagulation reversal], Titan Spine Interbody Device, Andexanet Alfa [factor 10 inhibitor/antidote], Defitelio [Defibrotide], Edwards INTUITY value system, GORE EXCLUDER Iliac Branch Endoprosthesis, and Vistogard (uridine triacetate; for fluorouracil overdose).  Section H, New Technology, begins at page 25031.

CMS reopens 340B policy discussion; defines "Knowing and Intentional"

340B pricing policy remains under debate and CMS continues to look for ways to make the 340B program more rational.   On April 19, 2016, CMS reopened a comment period for 2015 rulemaking that is not yet finalized (here).  Three topics are in play.  (A) How CMS will handle situations where current pricing rules and discounts result in negative, $0.00, or $0.01 pricing.  (B) How CMS will handle pricing o the launch of a drug (e.g. before ASP reporting has kicked in).   (C) How CMS will apply penalties to entities that charge a 340B covered entity a price that is "knowingly and intentionally" hire than the bona fide 340B price.

CMS is reopening comment on the latter issue because it had not previously defined "knowing and intentionally."  CMS is considering the definition below.  If you don't like it, you can write them and let them known until May 19.  CMS text after the break.

Surprise Press Release: MolDX Prices BRCA Panel Code at $622.

In November 2015, the final CMS Clin Lab Fee Schedule for CY2016 was released and locked in some surprisingly low prices for gene panel tests.  Receiving the most attention, the code for 5-50 genes, solid tumors, was priced at $597, and the code for 5-50 genes, hematopoetic tumors, was priced at $648.   Getting a little less attention, the gene panel for Lynch syndrome was priced at $796 (sequencing) and $796 for a sister code for large indels.  (The 2016 CLFS is here).

On April 19, 2016, the San Francisco genetics company Invitae announced that it was being covered for the hereditary breast and colon cancer code 81432 at $622.   This payment comes from the Jurisdiction E contractor, Noridian, but presumably reflects pricing that will apply through the 24-state MolDX policy system (here).   Code 81432 is defined as BRCA1 and BRCA2, full sequencing, plus 12 or more additional hereditary breast cancer related genes.  More details after the break.

CMS gives up on two midnight rule financial cut; But there's a bigger lesson

CMS undertakes annual hospital rulemaking.  It proposes a budget cut, with a bit of handwaving and a few sketchy numbers.  The AHA sues: on the grounds that federal rulemaking must be rationale and explicit.  A court ordered CMS to cough up its rationale in terms a CPA could understand.  CMS threw in the towel and gave up on the cut.  Full article online at Modern Healthcare, here.

NGS concordance with single gene tests... Perfect? Does perfect work for you?

Penn has just published a large scale study by Hiemenz et al. on the concordance of gene calls in tumor tissue made by NGS versus calls made by single gene methods.

In an open-access article at PLoS One, the authors summarize:

For samples that passed our validated tumor percentage and DNA quality and quantity thresholds, there was perfect concordance between NGS and targeted single-gene tests {with the exception of two FLT3 internal tandem duplications that fell below the stringent pre-established reporting threshold but were readily detected by manual inspection.}

But wait, there's more:

NGS identified clinically significant mutations not covered by single-gene tests. These findings confirm NGS as a reliable platform for routine clinical use when appropriate quality control metrics, such as tumor percentage and DNA quality cutoffs, are in place. Based on our findings, we suggest a simple workflow that should facilitate adoption of clinical oncologic NGS services at other institutions.

Article online here.  Subscription coverage at Genomeweb, here.

Modern Views of Diagnostic Testing and Barr's "TTP" Model of the 1980s

Sometimes you hear that today, there is a sudden new interest in outcomes of diagnostic test use, and not just the test result as an analytic variable. That's how it was with payers, you know, five years ago.

This always strikes me as nonsensical, like when someone asserts, "evidence based medicine first became the goal in the 1990s."

Take for example Judith Barr's model of "Total Test Process" which begins with a clinical question and ends 11 steps later with the documentation of the impact on clinical care.  Well - yes!

Below is the key figure from a 1994 review, open access online, by Schumacher & Barr.  The themes under "Total Test Process" originate from Barr's foundational work as early as 1981 (Amer J Med Tech 47:619).  The full 1994 paper is just five pages long, is available free online, and is well worth reading.  Paragraph after paragraph I was circling an idea that was contemporary and relevant and that matches exactly to a payer/new test/evaluation problem we face every day.

1994 summary article, here; from Clin Chem 1998 44:370-4.

Barr and Schumacher was were both at the College of Pharmacy at Northeastern University where they served as Associate Dean and Dean, respectively.  Their interest in the value of therapeutic drug modeling led to authoring several decades of progressive work on diagnostic tests, like this one.  They also published important early on decision modeling analysis for medical diagnostic tests (here).  (I had the chance to correspond with Dr. Barr, who is now professor emeritus.)

CDC Holds Webinar: Will Genomics Improve Public Health? May 3, 2016 2 pm

The CDC Genomics program under Muin Khoury manages a web page for national and some international genomics policy events, here.   At 2-3 pm eastern, on May 16, 2016, the CDC will host a one hour webinar on the topic, "Will Precision Medicine Improve Public Health?"   See the home page for this webinar here.  Registration is open now, and is free.

Buy-and-Bill for Costly Drugs Shifts Away from Physician Offices (2004-2014): New Study

According to an April 14, 2016, column at Drug Channels, based on a Milliman report commissioned by the Community Oncology Alliance:

• Administration of chemotherapy infusion has shifted dramatically from lower-cost physician offices to higher-cost hospital outpatient settings. 
• From 2004 to 2014, the buy-and-bill market share at physician offices dropped from about 90% to about 50%.

Links after the break.

Epigenomics Epi proColon - Part of the Story Behind the Story

After a several-year journey through FDA advisory boards, extra studies, and FDA reviews, PMA approval of the Epi proColon test was announced on April 13, 2016.

Epigenomics, based in Berlin and Maryland, is publicly traded overseas.  The stock has roughly tripled from January to April 13.  As of today, it has a market cap of 124M euros.*  The stock popped 20% today, probably not more because the company has been assuring investors since January that FDA approval was expected and imminent.

Part of the "story behind the story" is at the website Seeking Alpha under the EP Vantage newsletter channel.  Interesting reading (here).  More after the break.

CMS Proposes Major Sanctions Against Theranos

On April 13, 2016, news broke that CMS had proposed major sanctions against Theranos, including a two year suspension.   The CMS letter to Theranos is 44 pages long and was written on March 18.

Some of the penalties are stated to take place "8 days" from the "date of notice of imposition" while others take place at 60 days.   CMS had given Theranos until March 28, 2016 to respond.  Major news article links are provided after the break.

How Fast is Liquid Biopsy Going? Insights from Sacher's Paper on ddPCR in Lung Cancer

On April 7, 2016, JAMA Oncology published a 180-patient study in which each lung cancer patient had paired liquid biopsy samples (ddPCR for EGFR and KRAS) along with tissue biopsies.  The data is extremely interesting and seeing a paired blood/tissue study with this many patients is very helpful for understanding how fast the clinical adoption of liquid biopsy is likely to move.  The paper is online here.  It's listed as "Free."  Details after the break.

CMMI Announces Launch of "Comprehensive Primary Care Plus" in FFS Medicare

The Center for Medicare & Medicaid Innovation has been on a roll, launching a new Oncology Care Management program, a comprehensive and mandatory regional Comprehensive Care for Joint Replacement program, a vast national Part B drug payment reform (proposed only), and proposing to transfer a past demo program in Diabetes Prevention to a permanent Medicare benefit based on its interpretation of the demo as cost saving (here).   Now there's a new one: Comprehensive Primary Care Plus.  Details after the break.

FDA Announces July 19, 2016 Workshop on Liquid Biopsy Cancer Tests

Update (July 21, 2016)
A detailed subscription article on this conference is available at Genomeweb (here).


As a follow-on meeting to the FDA's February workshop on genome panel tests in tumors, the FDA has announced a workshop on liquid biopsies in oncology on Tuesday, July 19, 2016.

The FDA has posted the agenda here.   Registration is open.  The workshop will be held in Washington rather than on the FDA campus.

The FDA writes, "Lquid biopsy technologies are advancing quickly...are likely to be rapidly incorporated into clinical care."

The workshop is co-sponsored by the American Association for Cancer Research.  Over the past year, the AACR has urged the FDA to regulate cancer LDT's as devices  (here).

For a non official transcript of the February oncogene panel workshop, here.

MolDX Announces Expansion to WPS MAC

On April 6, 2016, MolDX updated its FAQ of general questions.  They've added WPS to the list of MACs following the program (Medicare MACs J5, J8).

See here.   Quoting:

3. What laboratories will be affected?All private, reference, and hospital laboratories that perform molecular diagnostic testing and submit claims to Medicare in JE, JF JM, J15 J5, or J8 on a CMS 1500 Claim Form or electronic claims on a 5010-837P are affected by this program. (Please reference the specific jurisdiction MDT policy for effective dates.)
5. Is the MolDX Program national in scope?The MolDX Program currently covers JE (CA, NV, HI), JF (WA, OR, ID, MT, WY, AZ, ND, ND, HI, UT, Aleutian Islands), JM (NC, SC, VA, WV), J15 (TN, OH), J5 (IA, MO, KS, NE) and J8 (MI, IN). Labs that perform services for patients in those states, must register in order to submit a Medicare claim.
10. Will the MolDX Program expand to other jurisdictions?At this time CMS has not determined how MolDX will be expanded. Palmetto GBA will continue to administer active LCDs and articles published in JM, Noridian will administer the MolDX in JE and JF, CGS will administer MolDX in J15, and WPS will administer MolDX in J5 and J8.

Implementation details don't seem to be up on the WPS website yet.
By my count, MolDX now provides diagnostics policy and pricing to 24 states and 44% of the Medicare population.

Government Tries to be Helpful: Integrated Web Portals for Mobile App Regulation

Digital health investments surprised some industry watching by continuing to grow in Q12016 (Rock Health, here).    However, complaints about a murky regulatory structure for some industry segments like healthcare apps with clinical decision support continue (Gray Sheet, here).    

Seemingly in response, the FDA, FTC, and Office of the National Coordinator (ONC) released a web-friendly guide to mobile app regulation (the web site here, article about it at RAPS, here).

The multi-agency website, housed at the FTC, will not solve all problems but provide a fast orientation to the major issues.  A binary of questions/answers guides the reader through need-to-know bullet points on HIPAA, FDA, and FTC issues.  (The FTC has a "sister website" with more detail on its issues, here).

Details after the break.

Quick Cornucopia of New, Free, Pharma Value-Based Pricing White Papers and Op Eds

The pricing of pharmaceuticals has always been in the news - always meaning from the 1890s to the 1950s and forward.  But it's especially in the news in the past couple years; see an April 2016 article in Forbes here.

A number of new pieces on value based pricing have just appeared.  ICER, the Boston-based thinktank for drug pricing that was cited several times in CMMI's current Part B value based drug payment proposal, released a "scoping document" for upcoming reviews of multiple myeloma drugs in February 2016 (here) and a final version in March (here).

• Update to this blog: The ICER draft report appeared on April 7, 2016, here, here.

On March 31, Amgen released a response to ICER, focused on the future evaluation of its drug Kyprolis (carfilzomib) - here.

Also on March 31, Steve Ubl of PHRMA and Dan Leonard of the National Pharmaceutical Council (NPC) released a joint OpEd in The Hill / Congress Blog on what should be the principles of value assessment that is appropriately patient centered - here.

The OpEd points to a 10 page NPC white paper on "guiding practices" for value based assessments (here) and see also a 15 page NPC white paper on the "landscape" of current value based frameworks (here).  Authors of the "landscape" specifically describe it as carrying forward and adding detail to a December 2015 NEJM article by Neumann & Cohn (here).

For an opinionated and colorful blog on ICER, here, here.