OVERVIEW OF CMS MOLECULAR PATHOLOGY UTILIZATION IN CY2016

On October 19, 2017, CMS released its CY2016 Part B national utilization files - here.

I've looked at the Molecular Pathology codes, from 81162 to 81599.   (For my CY2015 report, see here.  For my CY2014 report, see here.)

Total Utilization of MoPath Codes

Culling the codes down to the range 81162-81599, I tally $479,894,633 in "payment allowed", which I use throughout this report.  (CMS "payment issued" is slightly less due to deductibles, etc.)   This code series has about 168 codes in the CMS CLFS CPT. 

In the Genomic Sequencing Procedure Codes, there is a "Valley of Death" with no payments on any of the codes 81410-81425, which are 8 codes including some neonatal codes, exome, and genome.

High Payment Codes

The top ten codes paid $387,452,107.   This is 79% of all payments ($387M/$490M).  This goes beyond the 80/20 rule; this is the 80/5 rule (5% of all codes get 80% of all payments).

The highest payment line was Unlisted Code 81479 at $108M.   No wonder CMS has asked its MACs to start reporting on what companies are using unlisted codes for what tests - I predict CMS will issue G codes or require PLA codes for larger volume unlisted codes.   Based on state level data for CY2016, Assurex was probably paid for about 13,000 81479 services at about $2175 each (here).

However, some of the unlisted code volume is driven by special MOLDX rules - for example, we noted that Ambry Diagnostics had about 80% use of unlisted codes in CY2015.  Ambry primarily provides known gene sequencing, rather than proprietary tests like MAAAs, letting us infer that MolDX rules in California probably drove Ambry's high 81479 number.  Over 99% of 2015 81479 payments were in MolDX jurisdictions.

After the unlisted codes at code #1, Cologuard was runner up at #2, with $63M in payments, and Oncotype DX with $61M at #3.  The full table is here:

click to enlarge

Note that only 1 CYP gene makes the chart (and barely sequeaks in at $12M), due to stringent LCDs on CYP testing Medicare rolled out over the past 3 years.  Two CYP codes, 81225, 81226, garnered a colossal $270M payments back in CY2014.

Top 10 Codes...Other 150 Codes = Long Thin Tail

This pie chart shows ALL Mopath spending $470M), with the first ten slices individually and the last 20% as the last large slice.  Note that in this pie chart, and have added the two BRCA coding methods together into one pink slice (81162 & 81211).  After the initial light blue slice, Unlisted Code 81479 (about 99% found in MolDX states), the "fall colors" are all MAAA tests.  (Much of the light blue slice is also MAAA tests under unlisted code, e.g. Genesight etc.  A best-guess would be that the circle from about 1:30 to about 8:00 is all MAAA tests).

click to enlarge

High Service Volume Codes

 The top 10 codes by unit volume had 511K services, or 61% of the total 838K services.  These top ten most heavily utilized tests had $256M in payments, or 52% of payments.

The most frequent test was Cologuard, at 123,768 services.  (339 Medicare patients per day sent their little package to Wisconsin.)    The second most frequent was Unlisted Code 81479, with 73,573 services, followed by Tier 2 code 81401 at 58,478 services. 

The full table is here:

click to enlarge

Tier 2 Codes

CPT's quirky Tier 2 codes tallied $19,936,026 in payments, or just 4% of CMS payments.  Tier 1 81400 had 31K uses while Tier 2 81401 had 58K uses.   In total there were 125,000 uses of Tier 2 codes, but only a couple hundred for the two highest levels.    "Ave Pmt" is observed average 2016 payment; while "Pmt" is the predicted 2018 PAMA payment.  The full Tier 2 table is here:

click to enlarge

The Tier 2 codes were contractor priced until now, but will have PAMA prices in CY2018.   The PAMA prices generally don't diverge too much from the average MAC prices under the local pricing system.   MOLDX has elaborate prices for different tests within each Tier 2 level.  These may be replaced (sunsetted) by one-size-fits-all pricing when the Tier 2 CLFS prices become law on 1/1/2018.

Tumor Panel Codes Perk Up A Little

Tumor panel codes had virtually no usage in 2015 in CMS data, but pick up a bit in 2016.  There were 3,585 uses of 81445, 3,366 uses of 81450, and 1,062 uses of 81455.   These are respectively codes for 5-50 somatic tumor genes, 5-50 hematopoietic tumor genes, and >51 tumor genes of any type.

MAAA Tests

The MAAA code series 81490-81595 tallied $215M, or about about 45% of all mopath spending.

Medicare BRCA Data Diverges from Private Payer (PAMA) BRCA Data

A few weeks ago, CMS released its 5M line database of private payer lab test price data for 1Y2016, collected as part of the new PAMA price setting process.   For BRCA testing, which has a very complex coding system, at least in 1H2016, private payer use of CPT Code 81162, a comprehensive BRCA testing code, was almost nil (about 1000 cases out of 200,000 cases).   

However, CMS data is more diverse.  There were 16,665 cases of 81162, for $41M in payments.  It's used for more than half of CMS CY2016 payments, while it was closer to 1% of private payer CY2016 payments.  This could be because private payers had based contracting running across 2015 and 2016 on existing codes (e.g. 81211) whereas CMS has no long term contracts, and correct coding rolls over and kicks in anew with each January 1st. 

But quite a few other labs and MACs were still very actively using an unbundling or code stacking approach under Medicare, billing about 9,000-10,000 cases of 81211 (BRCA sequencing) and also 81213 (BRCA uncommon dup del).   In CY2016, the difference between coding 81162 (about $2500) and 81211+81213 (about $2700) was small.  However, the target prices for these codes widen under PAMA (to $1600 vs $2900 (!!)), making the choice of coding in the future more impactful.

There is also a hereditary breast cancer panel codeset:  81432, $932, for 14 or more BRCA related genes, and 81433, $600, for the Dup Del analysis.   CMS paid for 4,336 cases of 81432, but only 900 cases of 81433.   This is likely because of a MOLDX edit that classifies 81433 as an "excluded" code.*   This issue becomes more important as PAMA takes hold, because the price of 81432 will drop at 10% a year in the next three years.   Of course, it also makes no logical sense that BRCA1+BRCA2 analysis pay $2900 while that full service fits inside of a panel that pays in total $900 or less.  Two eggs for $20, a dozen eggs for $2.  You can't explain that to your sixth grader.   

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MolDX document M0047 V15.  MOLDX classifies 81433 (breast cancer panel dup del) as an "excluded gene" but does NOT classify the parallel code 81213 (breast cancer gene dup del) as an excluded gene.  Data shows that this drives payment to California labs doing BRCA testing to about $900 whereas in some other states Medicare pays about $2500-2700 for BRCA testing.  CMS has created a webpage for CY2016 State-Level payment data, but the files are not active yet. CMS will eventually post provider-level data by CPT code for CY2016, but not until about June 2018.

In short, we're really seeing four ways to price BRCA testing at CMS:  81213+81211 (most costly); 81262, which CMS seems to use more than privates; 81432+81433; and 81432 alone (where 81433 is banned-by-MolDX).   This results in BRCA pricing, in real 2016 data, from around $900 to $2700 or 3X.

Very Brief Blog: CMS Releases National 2016 Part B Data

CMS releases three kinds of national Part B data:  First, national utilization for the prior year, typically in November.  Second, utilization by "carrier" (basically, by state) for the prior year, also typically in November.  Third, after an 18 month delay, CMS releases data by CPT code by individual provider by name.  So 2016 data appears in about June 2018.

CMS has released CY2016 national data, here.  I've also put in the cloud, here.  This is a zip file folder with many small files with sequential series of CPT codes and their national utilization and total national spend.   A window into some CY2016 lab data appeared a few weeks ago in an OIG report.  Now you can see all the CY2016 national lab data.   

CMS has set up the webpage for state specific CY2016, but the links don't work yet.  Here.   

For completeness, eventually CY2016 provider specific data will appear here, but not til about June 2018.  I've also summarized the data sources in one blog, here.

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The molecular codes from 81162 to 81599 inclusively tally about $479M.   For a breakdown, see my blog entry here. 

Very Brief Blog: Digital Therapeutics Coalition Formed

According to an article in MobiHealthNews, a new coalition of startups in the "digital therapeutics" space has formed.   This is another example of how digital is transforming healthcare delivery in ways that go far beyond EHRs or telemedicine, which are represented by older trade groups.

The article is online here.   Sean Duffy, CEO of Omada, is prominently quoted.

Recently I noted that the CHRONIC care act has bumped around the Hill for several years, and includes a section improving telemedicine benefits and how they are paid/accounted for in Medicare Advantage plans.   That section of the bill will save Medicare $80M a year (!!!), as scored by the conservative CBO, so there's absolutely no reason it can't pass.  Still, it doesn't get done.   Hopefully, the Digital Therapeutics Alliance (DTA) will help the policy system get unstuck.

   

Very Brief Blog: Talk on Diabetes Insulin Pumps & Medicare Policy (Intl Diab Tech Mtg, Bethesda, Nov. 2, 2017)

I'm giving a talk on Thursday, November 2, 2017, in Bethesda at the Diabetes Technology Society international annual meeting.   The conference website is here. 

My presentation is in a series on reimbursement, from continuous glucose meters, to diabetes telemedicine and prevention, to artificial pancreas.   I'm posting the deck I will present, on insulin pump policy: here.

Some key points:

• Medicare is a defined benefit program, and insulin pumps and their insulin are under the benefit for DME (including wheelchairs, etc). 
• There's one legacy pump code, E0784, priced at about $5400 regardless of brand or pump capabilities.
• You have to be doing demonstrably badly enough on insulin before Medicare covers a pump.  
• Due to 2003 rules, insulin pricing for pump-based insulin had gotten badly out of whack with the current market, only about 30% of market price.  However, it was reset to market price on 1/1/2017.
• The GAO did a report strongly supportive innovation for new technology in the DME benefit.  CMS's reaction was lukewarm or less.   Here.
• CMS rejected a special new code for artificial pancreas (e.g. very smart insulin pumps) in 2014, but is reconsidering now, with a decision expected in November 2017.

NEHI Holds Webinar on KYMRIAH Pricing; Releases White Paper on Value Based Oncology Drug Pricing

On October 24, 2017, NEHI released a 33 page white paper on new approaches to value-based oncology drug pricing.  And on October 26, NEHI held a webinar on the topic, featuring speakers from Novartis and Harvard Pilgrim and focusing on outcomes-based billing and pricing for KYMRIAH (list price $475,000). 

See also: value based white paper from Duke with Health Affairs essay; links at bottom.

CMS Still In Background
The presentation doesn't feature any speakers from CMS/CMMI, who told NEHI they weren't ready to publicly discuss the in-progress indication-based and outcome-based pricing model.   I had earlier noted that while CMS and Novartis released "joint press releases" in early September about KYMRIAH, many journalists missed the fact that the CMS statement said next to nothing except for some vague, general positioning about hoping to support biopharma innovation (here, here).  It was noted there is nothing yet about the project on the CMMI website.

Indication Based J Codes?
According to Novartis in the new webinar, CMS will create different J codes for different indication and seems to have agreed with Novartis about only billing for successful patients.   As I pointed out in September, details have to be hammered out since hospitals, not biopharmas, generally bill CMS for drugs, and CMS most commonly sets Medicare policy centrally while leaving many aspects of Medicaid policy to the states.  The question of hospital markups (e.g. billing $950,000 for $475,000 of Kymriah) similarly arose a couple times in the webinar.

Links

The webpage for the white paper and presentation is here.  You'll find one link for the PDF and one link that takes you to the video on Vimeo.  For more details on the sixty minute presentation, here.

In addition to this October 24 white paper on oncology drugs, NEHI has a home page for all its white papers on price innovation initiatives, here.

See also: Duke & Health Affairs, October 30, 2017.

For an essay from the Margolis Center at Duke, by Daniel, Leschly, Marrazzo, and McClellan titled "Advancing Gene Therapies and Curative Health through Value Based Payment Reform."  Here.  Includes links to the Duke-based "Value Based Payment Consortium," here.  

Like NEHI, this center also has an October 2017 white paper on the path to Value Based Payment for medical products (23pp), here.

The National Pharmaceutical Council's 2016 white paper on this topic (15pp) is here.

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While the original approval of Kymriah was very an extremely rare pediatric condition, Novartis has filed for FDA approval for diffuse large B cell lymphoma in adults, a much more common condtion (here).

A Visual View of The Weird Intersection of BRCA Coding and PAMA Pricing

In an earlier blog we presented lab-specific CMS payment data for BRCA testing (here) and how to explain CMS's topsy-turvy BRCA pricing to a sixth-grader (here).

PAMA and the various combinations of 8 BRCA-related codes makes it even weirder than it used to be. 

I've assembled the BRCA services and coding options in the picture below, along with PAMA data for utilization and newly released PAMA median prices.  (Note, I've doubled the PAMA utilization to extrapolate from the sixth-month survey to a 12-month year.)  Click to enlarge, review, then continue.

click to enlarge

As observers have noted, under PAMA, the price of the most common BRCA billing code, 81211, actually rises somewhat (up by $200 to $2395) while the price of BRCA uncommon Dup Del analysis stays about the same, code 81213.   The consolidated or comprehensive BRCA billing code 81162 falls from $2503 to $1615, so it may be a less popular option than it was before. 

But wait, there's a whole 'nother level of weirdness, as the pricing for single-gene BRCA1 sequencing plummets to $75 and single-gene BRCA2 sequencing plummets to $185.   (Note that these codes got only a couple dozen uses in the PAMA year, whereas BRCA1-2 sequencing was about 200,000 uses.) 

This means there are several ways to build up coding for exactly the same major BRCA services: "Full sequencing of BRCA1 and BRCA2 and analysis of both common and uncommon deletions."

The most code-efficient way (which seems like correct coding to my eye) is 81162, paying $1615.   However, look harder and you'll find the highest sum comes from billing as BRCA 1-2 sequencing (81211, $2395) and uncommon deletion analysis (81213, +$553), totaling an impressive $2948, almost double the value we get for using the parent code 81162. 

But look closely and there's a third option, to order BRCA1 sequencing alone, with its common dup-del analysis, 81214, a frugal $75, and then order BRCA2 sequencing, 81216, for a still budget-friendly $185.  You're almost done: just order 81213 to wrap up those uncommon DupDels ($553).   Your shopping cart gives you all those BRCA services, soup to nuts, and costs you only $813, half the price of 81162, and only about a quarter of the most costly coding option for the same sequencing reports.  It's like those sales that get you one-way to Europe for $250.

To my eye, the simple coding is 81162.  I've said that.   But if you're going to break up 81162 into 81211+81213 (if you're gonna say that is kosher coding), why not do it again, and break up the 81211 into its component codes of 81214+81216?

More About BRCA Coding: Quest, AMA CPT, NCCI, and 3 Year Spending Options

Quest indicates that BRCA coding is ambiguous, allowing either 81211+81213 unbundled stack coding or use of the comprehensive code 81162.  See the Quest website here (sampled 10/30/2017; screen shot below).

There's no question that some of BRCA coding proposal was "tabled" by the powers that be when it reached the September 2017 AMA CPT meeting:

There's also no question that there is a public, national CMS NCCI Edit against unbundling and code stacking of 81211+81213, although it's not applied in some MACs (see here):

The next table shows CMS spending on BRCA testing in 2018, 2019, 2020 under three different coding approaches.   I've assumed 20,000 cases per year, about the 2016 rate.  Click to enlarge.

click to enlarge

CMS mostly pays for BRCA testing the most costly of all possible ways, by code stacking 81211+81213, despite CCI instructions not to pay this way.   This means the upcoming three year spend will be $176,930,400.   However, if CMS only enforced its own CCI edit, already on the books, and required use of comprehensive code 81162, spending would fall to $122,109,000, or a savings of $54,821,400. 

This is a big deal.  There's never supposed to be multiple ways to code the same service with AMA CPT codes.   (And I haven't even raised the issue of submitting gene panel AMA CPT codes where they are a better fit than code stacking individual genes.)

It's easy to imagine that CMS could simply throw up its hands at the brouhaha over AMA instructions and ambiguous use of 81211 and 81162, and many multiple coding methods.  CMS  could deal with the AMA problem and remove these two codes easily from the CMS fee schedule, because they are redundant.  Then CMS providers would not have comprehensive coding options, but, providers could account for full BRCA sequencing and full DUP DEL analysis by coding 81214+81216+81213, for total CMS payments of only $114,824,200, or CMS savings of $62,106,200 in three years.

HHS Posts 17 Internally Generated Innovation Projects

In the last few weeks, the head of CMS has written a WSJ op ed calling for a reboot of the CMS Innovation Center (here).  And the new head of AHRQ has promised a vision for a new "AHRQ 2.0" - here.

Here's another approach to innovation at HHS.   See a set of 14 innovation programs approved by HHS for the coming year.   This is an initiative of the HHS IDEA Lab (here).   The IDEA Lab fielded 79 proposes from across HHS - CDC, NIH, FDA, CMS, etc.   The proposals were rigorously reviewed and scored, and 14 were chosen.

See the list of proposals here.   One directly involves CMS, and happens to be in the laboratory field, headed by Katherine Szarama PhD of the Coverage Group, Eunice Lee of FDA, Brandi Kattman, NIH.   The project promises to reduce wait time between NIH, FDA, and CMS decision points (see full abstract at link). 

Another CMS project looks at the issue of hospital readmissions in sickle cell disease.

Very Brief Blog: New Leader Promises New Direction at AHRQ

On October 17, 2017, the new leader of the Agency for Healthcare Research and Quality (AHRQ) published a detailed blog on his plans for innovating and rebooting the agency.

The blog is here.   Open access coverage at Fierce Healthcare is here.  The new director, Gopal Khanna MBA,  headed a project called "FRAMEWORK" at Illinois HHS, part of an innovation incubator. 

Khanna has a lengthy Wikipedia page (here; cloud here; LinkedIn here).   He took the leadership role at AHRQ in May, 2017.

Khanna's four talking points are:

1. More development and integration of data platforms - Digital Health meets AHRQ.
2. Catalyze "Learning Healthcare Systems."
3. Engage operational leaders; convert innovation into practice & operations.
4. Patient-centered care.  Integrate federal, state, community, and other levels.

At CMS, CMMI is also seeking a reboot, a sort of vision for CMMI 2.0 (here).

AHRQ and USPSTF

AHRQ also supports the US Preventive Services Task Force (USPSTF), whose recommendations affect required health insurance preventive services (here).   

USPSTF released updated cervical cancer screening guidelines in draft form recently, and is expected to release new guidelines for BRCA screening in the coming weeks.  To date, USPSTF has not dealt (a) with BRCA screening in women not at elevated risk or (b) breast cancer related gene panel screening, which has become common.

Very Brief Blog: The Expedited Process for NCD Removal (2013 forward)

I was on a CMS call recently discussing the process for removal of an obsolete NCD. 

CMS published an updated NCD application process in August 2013, which includes a process for  deletion of obsolete NCDs after a short public comment period.   The August 2013 policymaking is online here (78 FR 48164, 8/7/2013).   NCDs can be removed because they are generally acknowledged as obsolete, because a product is no longer marketed, or because local contractor discretion would better serve the needs of the Medicare program.

CMS has thereafter used the obsolete NCD removal process at twice (home page for NCD removal, here).

• In November 2013, they published a list of NCDs for expedited removal, and allowed a 30 day public comment period.  See the document online here.  (The process generated 7 public comments, here.)  They deleted 5 of the NCDs shown below, keeping the ones on L-DOPA, Laser procedures, and Carotid function (here).   
• In November 2015, they proposed to delete the apheresis NCD and part of one other NCD (here), but they kept the apheresis NCD in place pending a fuller consideration than the expedited deletion process (here). 

click to enlarge

The expedited deletion process is administratively simple for CMS, as it allows CMS to propose NCDs for deletion with no further explanation of rationale than the implication that the NCDs meet at least one of the deletion criteria such as obsolescence.

Does FMI Abstract Give Insight to Pending FDA Approved "Foundation One?"

The International Association for the Study of Lung Cancer is holding its 18th World Conference this week in Japan.   Foundation Medicine has an abstract, available open access online, for a "universal combination diagnostic platform developed and performed in compliance with FDA 21 CFR 820" that interrogates 324 genes.   The authors write, the test "is anticipated initially to have 8 CDx indications."

Whether this matches exactly what comes out of the FDA's approval process...is up to the FDA.  As of September 2017, CMS has said that the FMI test is in parallel review for FDA approval and a CMS national coverage decision and that the results will be public soon (here). 

The FMI abstract is online here.  (At the conference link, click "plus signs" to see the full text.)

click to enlarge

What's Up with Use or Mis-Use of CMS's Edit Against Code-Stacking of 81211-81213: BRCA Testing?

See my December 2017 update here.

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For the last several quarters, I've been tracking a Correct Coding Edit on the CMS website that appears to date back several years and would normally operate to block use of the BRCA sequencing and BRCA duplication-deletion codes together (codes 81211-81213).

Updated through the current October 2017 instructions, note that there is a block against using 81211 and 81213 together:

click to enlarge

The edit against co-payment of 81211 and 81213 together can be overcome by using a -59 modifier, but according to CMS instructions, the -59 modifier isn't supposed to be used routinely.  (CMS article here and here; OIG report here.)[*] 

I went back to the transcript of the August 26, 2015, meeting, where these codes were discussed by Dr. Phurrough of CMS (see archive here, here).  Dr. Phurrough stated:

"If they [a lab] were to do one of the individual tests, 81211 or 81213, not on the same day, then they would be paid separately. 

If they were to do both of these codes, then correct coding, non-fraudulent coding would be the new code 81162. And to code both 81211 and 81213, when you did both of them, on the same patient, the same sample, would be incorrect coding."

It looks like Dr. Phurrough and the CCI edit author were on the same page.  Both are public record and easily found online at the links above.

Based on PAMA rates 2018-2020, converting the existing above CCI edit to a non-overridable edit would save CMS $54 million. 

For data on use of codes 81211 and 81213 by various labs in CY2015, see an earlier analysis, here.

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[*]  The 20130401 number indicates the edit dates from April 2013, and the * indicates it has no termination date.  The next column "1" means that a Mod 59 will flag for payment of both codes due to a special circumstance.  A "0" in that column means that payment for both codes is never allowed.

CMS's 2017 report to Congress report that edits save CMS about $700M per year, and about $400M of the "P2P" type of edits shown above; here.

AMA CPT Revises BRCA Panel Code for 2018

AMA CPT handbooks for CY2018 are out, and one change in molecular coding is a revision of the code for BRCA gene panel testing (hereditary cancer gene panels). 

The new code reflects a shortening of the required-genes list.   This revision was classed as an editorial change and therefore did not trigger any action in the CMS crosswalk/gapfill process this fall.

The new code will be

81432
Hereditary breast cancer-related disorders
(E.g. hereditary breast cancer, hereditary ovarian cancer, hereditary endometrial cancer)
Must including sequencing of at least 10 genes.
Including: 
BRCA1, BRCA2
CHD1, MLH1, MSH2, MSH6, PALB2, PTEN, STK11, TP53.


Prior to January 2018, the gene list used to include:
ATM, BRIP1, NBN, RAD51C.

CMS Requires MACs to Gather Data About Lab Tests with Unlisted Codes

On October 13, 2017, CMS released CR10232/Transmittal 3881, updating the Claims Processing Manual to require submission of data for lab tests processed with "unlisted codes."

The Transmittal is online here.  A cloud archive copy is here.  The relevant new text is:

Instructions for Not Otherwise Classified (NOC) Codes – Any unlisted services or procedure code. Note:  When reporting NOC codes, this field must be populated as specified below. 

When billing for unlisted laboratory tests using a NOC code, this field MUST include the specific name of the laboratory test(s) and/or a short descriptor of the test(s). Claims for unlisted laboratory tests that are received without this information shall be treated according to the requirements found in Pub. 100-04, Medicare Claims Processing Manual, Chapter 1, Section 80.3.2 and “returned as unprocessable.” Section 216(a) of the Protecting Access to Medicare Act of 2014 (PAMA) requires reporting entities to report private payor payment rates for laboratory tests and the corresponding volumes of tests. In compliance with PAMA, CMS must collect private payor data on unique tests currently being paid as a NOC code, Not Otherwise Specified (NOS) code, or unlisted service or procedure code. 

Note the language the instruction is couched in:  Labs are required to report private payer rates...CMS must collect private payer data on unique tests paid with a NOC code.

This is a change in interpretation, as CMS did not previously require this reporting in the interval since PAMA was passed in 2014.  In June 2016, CMS wrote, "Data on tests that are billed using unlisted CPT codes or NOC codes would not be considered applicable information and would not be reported."  (81 FR 41053, 6/23/2016).

Almost All CMS Unlisted Code Payments Fall Under MOLDX

In CY2015, CMS paid $165M under molecular unlisted code 81479 (here).  However, nearly all of this was paid under the MolDX program (here).  Thus, as a practical matter, the CMS transmittal will have little impact outside of MolDX states.

MolDX has a special coding rule that 1-4 genes should be reporting with an unlisted code (here) rather than CPT stack coding. For example, we've previously noted that Ambry Genetics bills 80% of its Medicare services as MolDX NOC codes (here).   In addition, MolDX requires at least six tests to be submitted with -22 modifiers (e.g. Qiagen KRAS 81275-22; here.)

Foreseeable Problems

Parallel instructions (in the same claims manual) require reporting of drug name with each unlisted code use of a drug.  On the other hand, drugs have fixed precise names, whereas lab tests often do not, although they might have generic names (EGFR sequencing) or in some cases trademarked brand names.

• Labs may repeatedly update versions of their test (e.g. a tumor gene panel test may be frequently updated, with 30 genes, 31 genes, 32 genes...) so there will be some questions about what CMS intends a "unique" test to be.  
• In addition, CPT instructions require all additional tests performed, that don't have individual codes, are to be billed with ONE NOC code (or NOC code, unit of 1) so many individual tests may fall under one NOC code on one claim.  CMS seems to recognize that, asking for collection of data on the "test or tests" billed with the NOC code.
• The MolDX program is sometimes exuberant in its required use of NOC codes even when services could be otherwise described by CPT gene stacking or CPT panel codes. 
• CMS might use the data to retrospectively enforce whether gene panel tests are correctly coded, e.g. BRCA or Lynch gene panels.

This is the template that MACs should use to report 81479 and other unlisted lab payments.  As noted above, nearly all unlisted lab tests are paid by MolDX MACs.  And MolDX MACs already require comment field specificity, e.g. Z codes.

Very Brief Blog: AMA Posts Summary of September 2017 Code Decisions

On schedule, about a month after each CPT meeting, AMA has posted results of the AMA CPT September 2017 editorial panel.   Results are here (8 page PDF).

In overview, of about 58 agenda items, about 17 were withdrawn, 9 rejected, and 2 postponed.  Typically, while a code application may be submitted on a 25-page form by any stakeholder, if the corresponding clinical association does not support the code proposal, it is withdrawn rather than brought to discussion for rejection. 

In diagnostics, one proposal was tabled, one withdrawn, while new codes will be created for TGFB1 (in corneal dystrophy), MYD88 (lymphoma), a breast cancer Cat I MAAA, and a prostate cancer Administrative MAAA.  No non-genomic codes were  up.

Separately, in the Proprietary Lab Analyses coding process (PLA),  23 test codes have been created, about 15 of which have already entered this year's CMS crosswalk pricing process.

The next PLA submissions will be January 12 and April 11.  The next CPT submission is November 9, after that March 1.

Very Brief Blog: Precision Medicine and Big Data (Washington DC, Oct 31-Nov 1)

Interested in the intersection of Big Data and Precision Medicine?  There's a conference for you, to be held in Washington on October 31-November 1.   See full website here:

• http://www.bigdataleadersforum.com/

Very Brief Blog: Health Affairs' Rapid Coverage of Executive Branch Obamacare Changes

Numerous news outlets cover the Executive Branch's changes in Obamacare policy in real time.  However, it can be difficult to find the original sources, such as the actual text of the Executive Orders.  ( recently gave an example in this blog that links to the executive orders, past executive orders, rulemaking, regulation, etc, on the Contraceptive Religious Exemption issue, here.)

For several years, Timothy Jost, emeritus professor at Washington & Lee Law School, has provided rapidly updates on federal health policy at the Health Affairs blog (here).   Lately, his lengthy analyses have been appearing in record time, often less than 24 hours.  He provides links to original documents that are often missing in journalists' articles.

• Jost's October 12 analysis of the executive order asking for creation of lighter less expensive health plans is here.   (Linking to the actual executive order, here.)
• Jost's October 13 analysis of the Executive Branch decision to immediately end cost-supporting payments for low income persons in Exchanges is here.
• The issue has been progressing through federal court ligitation with differing opinions as to whether the cost-supporting payments are properly authorized and appropriated under current law.
• Jost also links to the current Attorney General opinion that payments should stop, here (J. Sessions, 5p).
• May 2016 38-page ruling that payments were unauthorized, here (Judge Collyer, DC, 38p).
• Article on the Collyer ruling, here.
• The price supports for low income persons apparently tally only $7B a year, a tiny part of our $3T healthcare system or the circa $3T federal budget.
• Jost's October 14 summary analysis and outlook is here.

Footnote - 

Often lost in the excitement about Executive Orders is that they can differ greatly in their actual content and effect.   For example, if there was an Executive Order to immediately close the border with Mexico to all traffic, due to emergency conditions, that would have a huge immediate effect.  Other policy measures are couched as Executive Orders (with pomp and circumstance) but need not be in that format.  The E.O. regarding lighter health plans, for example, directs the HHS to "consider proposing regulations, or revising guidance" on the topic.  This could be conveyed equally effectively by a press conference remark, internal instructions, an action item delegated at a Cabinet meeting, a paragraph in a speech, or even a tweet.  It gets higher visibility by being couched in the format of an executive order.

Footnote -

As discussed in the citations to Sessions and Collyer above, the ACA issue is that the ACA created tax credits for individuals (S. 1401) and funding for low income persons directly paid to insurers (S. 1402; also called CSR's, cost-sharing reduction), but the ACA provided a clear appropriation of funds only for S. 1401. 

Til now, payments have nonetheless been issued as due under both S. 1401 and S.1402.  In layman's terms, the issue involves what to do when there is an apparent error in law.  On the one hand, we want laws to be enforced as written; on the other hand, we don't want national processes to grind to a halt every time there is a typo.  (Sessions directly discusses the Supreme Court decision in King in this regard; link above).  Alternatively, the law could be correct as written; S.1402 could be quite deliberately dependent on annual appropriations from the House -- appropriations which the House isn't making.  (Another topic in the court action is whether the House had standing to sue the executive branch in this way.)

With a Republican House not wanting to make the fiscal appropriation and a Republican President not wanting to make the payment, and a Federal Court injunction that the payments shouldn't be made, the outcome this week was pretty foreseeable.

Legislation and Medicare LCD's: From 21CC to New Legislative Proposals

In brief:

• The 21st Century Cures Law, signed in December 2016, put into law some legal obligations for clarity in LCDs, many of which were already being practiced.    LCDs must be posted in advance, follow comment periods, post responses to comments, provide rationales, and provide links to the draft LCD along with the final LCD.   Final LCDs must be posted for an interval before they are effective.   
• College of American Pathologists and others are supporting a new proposed law, the LCD Clarification Act,  which overlaps some with topics in 21CC, but also expands requirements for LCD clarity and process, including open CAC meetings and more eyes on the reconsideration process, along with definitions of "evidence" that includes consensus opinion.

21st Century Cures and LCDs

The 21CC (HR 34) became law on December 13, 2016.  The full text is here.  Section 4009 is titled, "Improving Local Coverage Determinations."    It's only 197 words long (LCD full text here).    It's codified at SSA 1862(1)(5) [el 5].

CMS must require that before an LCD is finally effective, the MAC must post the LCD in advance in its entirety, along with a copy of its original LCD proposal and date, links to that proposed LCD and to public comments and response to comments, provide a "summary of the evidence considered" and "a rationale for the determination."   These requirements became effective in July 2017 for all LCDs that are either "proposed or revised."   

Analysis.  MACs already posted LCDs in advance, and there was already a 45 day public notification period before a final LCD becomes effective.  MACs already cited literature and rationale in the LCDs (per CMS manual instructions), and for at least a couple years a Q&A on public comments has been posted.    I've heard a MAC medical director refer to 21CC as a big change they were still figuring out, but it seems to require very little.   Before this, rationales could have been scanty or confusing, and I suspect that under 21CC a "rationale" can still be scanty and confusing.   The legislation does seem to target LCDs that simply provide laundry lists of non-covered services with no rationale or literature cited.    The current LCD instruction manual is online here, and as of October 2017, hadn't been revised to account for 21CC yet.  21CC Section 4009 is already codified at SSA 1862(l) where it adds to the existing section defining NCDs and LCDs (here).

• A newly issued LCD by the NGS MAC (NY, New England, and several midwestern states) is 21CC-compliant and shows that the contractor takes the "evaluation of the evidence" and "rationale" mandate seriously and diligently.   I've put a PDF copy in the cloud here and a web cut/paste here.  At the links just given, scroll down the LCD to see the detailed article-by-article evaluation and analysis.

The Local Coverage Determination Clarification Act of 2017

The LCD Clarification Act was announced in a press release in March 2017 (here).   Senate sponsors include Isakson (R-GA), Carper (D-DE), Stabenow (D-MI), and Boozman (R-AR).   The College  of American Pathologists (CAP) describes "the LCD process [as] broken" and "lacks transparency, accountability, and stakeholder input."

CAP Infographic.   CAP has an elaborate PDF Infographic on the law which calls out for criticism a Palmetto LCD on special stains (here).

Under the proposed law,

• MAC Contractor Advisory Meetings must be open to the public and on the record.
• MACs must provide evidence relied on, in the proposed LCD.  If facts are withheld til the final LCD, it would impair the ability of the public to comment.
• LCDs must be reviewable by a "qualified disinterested party."   
• Carbon copy adoption of LCDs from MAC to MAC overrides the ability of stakeholders to have meaningful and independent comments and creates "de facto NCDs."
• Supporters are cited as CAP, ASCO, American Society of Radiation Oncology, and others.

As of October 2017, the bill is tracked as S. 794 and as H.R. 3635.  Text also archived here.   As of October 2017, there were 10 current Senate sponsors and 12 current House sponsors.  The bills are about 2300 words long.  Tidbit: Although introduced later (8/2017), the HR3635 bill includes dated "carrier, fiscal intermediary" language whereas the S794 bill is for MACs.  

Analysis.   The LCDCA defines "qualifying evidence" as including both peer reviewed scientific publications AND a general consensus of the applicable medical community.[*]   While MACs are requirered to "reconsider" LCDs now, the law provides a more detailed process and provides guardrails such as "Agency Evaluation of a Reconsideration Decision" and creation of a CMS "Ombudsman" for LCD issues.   Currently, CMS coverage staff will often state they do not have authority to evaluate an LCD or a reconsideration decision (other than creating a new and over-riding NCD.)   

CAP infographic (in part):

click to enlarge

____

[*] For a 2015 book on the development of consensus bodies and guidelines, see Miriam Solomon, "Making Medical Knowledge," Oxford.

Very Brief Blog: The 122-page Transition Overview of HHS from November 2016

The outgoing administration's November 2016 overview of HHS - weighing in at 122 pages - is still online at HHS.

• Online at HHS here; cloud archive also here.

It's a handy overview of the whole department, from the roster of presidential appointees (Surgeon General, Head of NIH) to the healthcare spending and the "discretionary" spending (e.g. NIH, FDA).

HHS expected to have 76,342 employees in 2017.  An Org Chart of HHS is here.  Dr. Don Wright was the Acting Secretary briefly in early October; replaced by Eric Hargan on October 10 (here). Jeffrey Davis is Acting General Counsel, here.  Randy Pate heads CCIIO, which oversees many aspects of the Exchanges.


Tidbit
The current surgeon general, Vice Admiral Jerome Adams, took office on September 5, 2017 (here).

Very Brief Blog: JAMA Publishes Favorable RCT on Warfarin Genetics

In a multi-center study involving Washington University, Intermountain, New York Presbyterian, and other centers, the GIFT trial, genotype-guided warfarin dosing was found to have clinical benefits.

GIFT randomized over 1600 patients undergoing either hip or knee arthroplasty.  Composite adverse events fell from 15% to 11%. 

Studying the value of genetic guidance in RCTs is problematic, because hospital based RCTs always insure that standard of care is optimally applied in the non-genetic arm.  Genetic dose guidance might have more impact in the real world where standard of care is less monitored and controlled in typical patients.  Some prior RCTs have been inconsistent; for one entry point, here.

The study by Gage et al. is online here; see also an Op Ed by Emery, here.  Open access coverage at Genomeweb, here.

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For a 2013 review at Genomeweb [subscription], here.

CHRONIC CARE Act (S.870) And Flexible Digital Benefits in Medicare Advantage

The CHRONIC Care Act (S.870) is a major piece of Medicare legislation that has now passed the Senate.   It passed the Senate Finance Committee last spring, and has a budget-neutral score from the Congressional Budget Office.   It provides improved benefits in traditional Medicare for home-based chronic care management and telemedicine, and provides pathways for broader elective benefits for Medicare Advantage plans.

CHRONIC raises a larger issue, though. 

Financially, Medicare Advantage plans and services are divided in two for budget and contracting.  There is one set of financing rules for benefits that match Traditional Medicare parts A&B; and a separate set of rules that provide\ carved-out "enhanced benefits" such as dental or vision.   The fact that individual pieces of "one-off" legislation are required to allow M.A. plans to provide telemedicine benefits points to a cumbersome problem that reflects an outdated framework.

Here, I argue that M.A. plans should be able to provide additional benefits such as digital health delivery within their regular M.A. funding without interference from Congress.  M.A. plans would continue to be required to provide all the Part A, Part B benefits of traditional Medicare and of course, to meet all M.A. quality metrics.

The CHRONIC Care Ac of 2017

For an up-to-date summary by Billy Wynne at Health Affairs, see his October 5, 2017 post here.  See a June 2017 article by former senators Daschle and Frist here, and a deep dive analysis by the Bipartisan Policy Committee, here.  The budget neutral CBO analysis is here, and the full bill can be found here.

Medicare's Excessive Controls on Telemedicine Delay Innovation - By Handcuffing the Payment System

Medicare has a number of delivery methods that are designed to enhance innovation, such as Accountable Care Organizations and Medicare Advantage.  However, telemedicine can't improve quality and reduce costs in these systems unless the law makes it feasible.

• For example, ACO's get small rebates from CMS for saving costs.  
• If the ACO can save Medicare $10 and get a $3 bonus by converting a $100 office visit to a $90 telemedicine visit, the ACO loses a ton of money if it gets no reimbursement at all for the $90 telemedicine visit.  Similarly for Medicare Advantage. 

Section 303 of the CHRONIC Care Act Will Allow Telemedicine in M.A. Base Bids

Section 303 of CHRONIC would be effective in Plan Year 2020, and would allow M.A. plans to include the costs of telemedicine in their base budget, which is funded in a risk-adjusted and capitated way, pegged at a level similar to the regional costs of traditional Part A, Part B. 

Under Section 303, base bids will be able to include "additional telehealth benefits" which would be outside the telehealth benefits in traditional Medicare as enumerated at SSA 1834(m), that is, outside an A/B benefit.  At Section 303, additional telehealth benefits are defined as "clinically appropriate [services furnished by] electronic information and telecommunications technology when a physician or practitioner is not at the same location as the enrollee."   Further definition would be undertaken through notice and comment regulation. 

Analysis

Medicare Advantage plans were set up with concerns that providing capitated payments to health plans would incentivize the short-changing of medical services to raise the profitability of the M.A. plan.

Therefore, M.A. plans are required to provide all available Part A and Part B services to Medicare patients.  Budgets are closely monitored (including loss ratios) and plans aren't allowed to keep profits by restricting services.  Rather, unspent money is given back to Medicare or distributed as "extra benefits" to members (such as dental or vision benefits) or distributed as lower copays.   The mechanisms to control and budget the base spending (the A and B equivalent spending) and to control any excess profits and define "extra benefits" are a lot of red tape. 

When the issue is ensuring that M.A. patients get "enough" healthcare, the rules make sense.

When health systems and plans can innovate better ways to deliver similar or higher quality care, regardless of convoluted A/B rules, the system doesn't make sense.   Medicare Advantage plans should be able to deliver care through the best and most modern available channels.   Today, where Part B carve-outs and carve-ins and extra benefits are onerously defined by bits of legislation and by extra layers of contracting, innovation is impeded.   For example, the CHRONIC Care Act is a big step forward, but it defines telemedicine as practitioner-based, when it should include other kinds of benefits like preventive medicine and behavioral medicine (for example, diabetes and cardiac prevention programs.)   If a health plan has, say, $100M for physician visits, it should be able to flexibly adapt between telemedicine and in person visits depending on the location, patient mix, clinical circumstances, etc.   No government purpose is served by making the combinations as difficult and over-regulated as possible.   CHRONIC Section 303 is a step in the right direction, but M.A. plans should be given more freedom, within their fixed budgets and existing quality rules.  Section 303 is scored by the highly conservative Congressional Budget Office to save $80M - we should let M.A. plans save money through new technologies whenever they want. 

Legacy Rules Depended on Legacy Bookkeeping

Whatever the intention of the original rules, they depended on legacy fee-for-service bookkeeping, which is increasingly out of step with modern bundled and capitated payments. It may be increasingly impossible to enforce the rules under modern health systems medicine.

Let's say an M.A. plan in San Diego gets $10,000 from CMS per patient.  It passes on $3000 per patient to San Diego Physicians Associates to manage office and outpatient care.    

San Diego Physicians Associates seamlessly provides a range of telemedicine, concierge-like, and preventive services for its $3000 per year per patient capitation.   But these aren't called out separately in its contract with the M.A. plan.  

Thus, it's impossible for the M.A. plan to try and allocate costs among covered and "non covered" telemed and preventive services, because they're capitated somewhere downstream in a modern risk-sharing and bundled system.  

CMS Could Still Track to A/B Finances, But With Less Red Tape and Legal Paperwork

To the extent necessary (and possible)... CMS could still track benefits that fall outside of traditional Part A and B, but this could be kept to the financial reporting level and not the contracting level.  And after M.A. plans provide all A/B services, just like to day when they want extra money that is above their capitation it would require extra contracting.  Just like today.

But let's modernize.  When M.A. plans can provide some selective, cost-saving services within their capitated budget, then they would be free to do so, without additional contracting. 

____

Several blogs appeared in Health Affairs a few days after this October 9 essay and touch on related themes.  On October 17, John O'Shea of Heritage Foundation argues for more flexibility in Medicare Advantage, which will help achieve the goals MACRA is lumbering towards (here).    On October 12, Huilgol et al. make yet another plea for more flexibility in telemedicine benefits, including in urban areas (here).  On October 17, Chernew and Barbey argue we need a better framework for "understanding savings" in value based environments like ACOs (here). 

A November 1 article talks about the increasing daily integration of telemedicine at UPMC, making laborious segregation of Medicare-covered and non-covered services a wasted effort in paperwork (or risk of noncompliance) for MA health plans following Medicare regulations (here).

Very Brief Blog: Q3 Digital Health Investment Reports; MEDPAC disses MIPS

Several reports on the digital health industry and investment climate appeared around October 1, along with trade press.

Rock Health Digital Health Report

San Francisco-based Rock Health released its quarterly report for Q3, tallying Q3 funding for digital health at $1.2B, with an annual total of $4.7B, which will push beyond the CY2015 peak of $4.6B in a year.   On the other hand, there were no IPOs logged.   Rock Health defines digital health broadly, for example, including $100M in new funding for 23andMe.

• Rock Health here.
• Trade press at Becker's here.   
• At HIT Consultant, here.  
• At Healthcare Dive, here.  
• Another article, "Is Digital health industry failing or flourishing?" here.
• The online summary is pretty extensive; the full report is $1499.
• RockHealth also held a digital health conference in SF on October 17-18; see trade journal report here.  Archive agenda here.
• Separately, the Digital Health Maven Project also issues a Q3 report.  Download this 18 page report with free registration, here.
• See another report from ENSPEKTOS, archived at SlideShare, here.

Ernst & Young Releases 94-page Annual Medtech Report

Colncident with the fall AdvaMed conference, Ernst & Young released its 2017 annual report on the Medtech industry, here.

More Hate Mail for MIPS and MACRA

Related to digital health are the digital physician metrics and EHR metrics wired into the MIPS quality reporting systems at Medicare, created inside the 2015 MACRA law.   Last week, the influential MedPAC panel joined the voices of many physician organizations in asking that the cumbersome and overly complex MIPS system be scrapped (here, here; CMS website [one of many] here.)    While MIPS is largely structured by recent statute, ending it would fit the administration's goals of reducing burdensome regulation.

MedPAC's fall meeting echoes themes on MIPS in its June 2017 report (here).  

Very Brief Blog: Transcript of Sept 25 CMS Lab Crosswalk Extra Meeting

Because many people follow this blog by a web news feed, this is notice that I have newly posted a transcript of the September 25, 2017 "extra" CMS laboratory policy meeting on crosswalk-gapfill issues related to PAMA.   The public meeting was held by CMS as a webinar.

On September 25, 2017, CMS held a webinar-based advisory workshop and public comment session on its proposed crosswalks for codes that lacked data in the regular PAMA data capture process.

Unofficial Uncorrected Transcript, 

based on CMS Youtube video archive, 

posted in the cloud HERE.

For more background on the September 25 meeting, see original post here, which also now includes a transcript cloud link. 

Guide to Resources on New Religious Objection/Contraceptive Coverage Policy

On October 6, 2017, the Administration released two interim final rulemaking documents that codify HHS's waivers of the contraceptive coverage requirement of the ACA for religious or moral objectors.  The path to the different documents are usually not cited in press articles, and are provided here.  The regulations published include one document on religious exemptions and a separate, standalone document on moral exemptions; they total 263 pages.

• Coverage at MedPage Today, here.  A deep dive 7000-word analysis at Health Affairs by Timothy Jost, here.  A follow up article on legal challenges, here.
• White House Press Release October 6, here.
• Link back to May 2016 Executive Order, asking HHS to undertaking rulemaking on the issue, here. [*]
• The HHS responded with rulemaking over 150 days at 1.7 pages per day.  
• 2.4 pages per day if working M-F.
• The relevant law as written in the 2010 ACA itself (42 USC 300gg-13), here.
• Note there are two new rules, one "Moral" and one "Religious."
• New interim rulemaking, Moral Exemptions and Accommodations for Coverage of Preventive Services, here.   PDF here.  100 pp [!]
• New interim rulemaking, Religious Exemptions and Accommodations, here.  PDF here.  163 pp [!]
• Although there are the two documents, on page 82, the Moral document states: "We assume that no entities with non-religious moral objections...will  use the accommodation."  So an entity may have a moral objection to contraception that is religious in its basis, but is not expected to have a moral objection that has no religious basis.  The entity itself does not have to be a "religious" entity as long as its objection is religious in basis.   2013 proposed rulemaking was to apply only to religious organizations and entities (see e.g. page 17.)
• The law cites precedent in other laws, e.g. individuals are protected from being forced to participate in abortions by their employer.  
• The two documents are so long because they read like 150-page law review articles.  One footnote reaches 600 words.
• The text of the actual regulations is clipped here (5475 words).
• The statute (300gg-13 above) only states that the required preventive benefits for women shall be those that are created and endorsed by the Health Resources and Services Administration, HRSA.  
• Those were created and published by HRSA in 2011, here.  They were finalized (and can be revised by HRSA) after public meetings in 2010/2011.   
• They were updated in December 2016 (e.g. before the current administration), here.  
• These guidelines appeared to already have footnoted exceptions for religious organizations.  
• See also regulations at 45 CFR 147.130.  Prior to the current rulemaking, these were most recently dealt with in 2015 in rulemaking (80 FR 41317, here.)
• Separately, The Center for Consumer Information and Insurance Oversight (CCIIO) released a new bulletin regarding of enforcement of non-coverage of voluntary abortions by federal insurance.   Health plans offering such coverage must clearly segregate it, in plan documents, and make ultra-clear it is financed separately.  The CCIIO document is here and the Health Affairs deep dive blog is here.
• The goal is to ensure that these Hyde Amendment concepts are rigorously enforced.

_____

Intersection of Separately Describe Preventive and Drug Formulary Benefits?
The new regulations focus entirely on the special women's preventative health benefit, and allowing exemption from its requirement to cover contraceptives as a preventive (no copay) benefit.  Oral contraceptives are also drugs, and might also be regulated by the separate area of legislation that describes ACA drug formularies, which may have copays, but under which drugs must be covered at the greater of (1) one drug in every USP category and class, or (2) the same coverage as the drugs in that state's essential health benefits benchmark plan.  See e.g. Ung et al. 2015 (here).

Word Counts
In the Moral exception document, the word sincere appears 55 times; and 47 times in the Religious exception document.  The word religious appears 222 times in the Moral exceptions document and 305 times in the Religious exceptions document.

[*]  The May 2017 Executive Order was written in such a way as to allow HHS to create exemptions from coverage of all types of women's health benefits, not just contraception.  I did not identify a reference or crosswalk to the Formulary or Essential Health Benefits in the two new regulations.