Very Brief Blog: Recent Headlines in Digital Pathology

A CEO in the field explained to me, a few years ago, one of the differences between Digital Pathology and Digital Radiology:  Radiology information (in MRI, CT, PET) starts as digital information.  If we printed out "films" from these modalities, in the 1980s or 1990s, it was a second-hand workaround for an era when fast high resolution workstations were not common.  On the other hand, tissue histology starts with glass slides, not digits.

In late September, digital pathology made the front page of the New York Times, but not necessarily good news.  This was in stories about the $25M raised by Paige.AI as part of an exclusive-access deal to case files at Memorial Sloan Kettering and the back stories about how the deal was made, who got stock shares, etc.  Entry point here.

Some other late September news in Digital Pathology with a few links.

• Startup Proscia pulls in an $8M new funding round for digital pathology software and AI-assisted innovations.  Here.
• Publication that neural network software can correctly diagnose a high proportion of common dermatology diagnoses.  
• Trade journal here, research article Olsen et al. here.
• HealthCare Dive article on barriers versus momentum in digital pathology, here.
• Note that this is a cover article for a forthcoming market sizing report by Signify Research, essay here and report access via here.  
• The summary insights may still be of interest, though.
• Radiant also offers a market sizing report here.

For a 2018 trade journal article and additional linked entry points on artificial intelligence in radiology, here and here.


For a few updates on cervical pathology AI in early 2019, see here and here.  For a couple blogs at FlagshipBio on AI in pathology, here and here.  Another update, April 2019 CAP TODAY re digital Her2 IHC guidelines, here.

Very Brief Blog: AdvaMed Calendars West Coast Dx Summit (San Diego, November 7)

AdvaMed-DX has calendared its newest biannual West Coast Summit for diagnostics innovation and policy.  It will be held in San Diego on November 7, 2018.

See the website here.   Registration is $1095 for non-AdvaMed members and $795 for AdvaMed members (see also extra categories like "government employee.")   

I don't see a posted full agenda yet but the summary is:  "This one-day summit will feature leaders from the diagnostic industry, the investor community, Congress, government and commercial payers, and others."

Very Brief Blog: Ernst & Young Issues 60-page 2018 Medical Device Industry Report

In conjunction with this year's fall AdvaMed meeting, Ernst and Young has issued its annual medical device state of the industry report.  This year it clocks in at 62 pages.

See a trade press article on the report at MedCityNews here.

See the actual PDF report via a link at MedCity just cited, or here.

MedCity portrays the report as an emerging turf war or competition between digital companies (think Google & Verily) and traditional medtech companies, as well as a battle for consumer engagement to facilitate an edge over competitors.   "The battle goes to the swift..."

Very Brief Blog: HHS Issues Report on Data Sharing

Today I had the chance to speak on CMS & Big Data at a conference in Washington sponsored by Academy Health.  Mona Siddiqi of HHS talked about a newly published, 2017-2018 survey of the HHS agencies (FDA, NIH, CMS, etc) and how well they were facing the challenges and the upside potential of data sharing. 

The 34-page report is online here.

Key points, as summarized by Healthcare Dive here, include: 

• Efforts to increase data sharing among HHS agencies are hampered by the lack of a transparent and standardized protocols; 
• While isolated successes in interagency data sharing have occurred, an enterprise-wide data-sharing framework is needed to efficiently scale; 
• The report identifies an array of legal, technical and cultural challenges to enterprise-wide data sharing, along with next steps to advance HHS goals.

Additional trade press here and here.  HHS press release here.

Brief Blog: CMS Head of Coverage Quoted in Trade Press: Data, Not Gloss or Sugar-Coating

The head of the coverage division at CMS, Tamara Syrek-Jensen, quoted today in trade press from the annual fall Advamed conference.

https://medcitynews.com/2018/09/at-advameds-annual-conference-cms-official-to-industry-tell-us-the-truth/

See the full article at link above, but short quotes here:

"When you come talk to us, let’s just have an open, honest conversation,” she said. “At least that’s my preference.” 

In the question and answer session, [the reporter] got up and asked her for clarification saying “it seems like you have encountered dishonest device manufacturers. Can you share?” 

To which the room exploded with laughter and Jensen responded, “So many times. Oh gosh, I took a meeting just last week” to which the room laughed some more. 

She added that while she couldn’t elaborate specifically, it was likely a case of “sugarcoating the data,” but “when you dig a little bit deeper you can tell perhaps that it isn’t necessarily [in reality] how it was being portrayed.”

The Boom/Bust in Medicare Part B Pharmacogenetic Spending: 2013-2017

In 2014, spending on just three pharmacogenetic codes was over $300 million dollars, about 55% of Medicare's MoPath spending for the year.   By 2016, spending was down to $18M, about 3% Medicare's MoPath spending (which was lower in total in 2016 than 2014). 

In the interim, there was rapid production of Medicare LCDs which markedly limited payments for pharmacogenetic testing.  OIG/DOJ had concerns about overuse, Genomeweb here.

I pulled some data together in preparation for an October slide presentation, and I've posted some key screenshots below.

click to enlarge

click to enlarge

click to enlarge

For a broader view of CY2017 mopath codes and spending at CMS, here.

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Data Sources

You can access and download CMS data for all Part B CPT Codes by year, here.   Every year 2000-2017.

I've also put the CLFS codes (80,000 series) in the cloud in one zip file, for the five years 2013-2017, here.  2013 was the first year of the current MoPath codes.


Extra Credit

Let's say you are a lab CFO or lab industry financial analyst.

In 2014, you projected that CYP revenues would be level in 2015, 2016, and 2017 (at $315M per year, the same as CY2014).   In fact, revenues would prove to be only ($108M, $18M, $17M) in those years, creating a gap of ($206M + $296M + $297M).  The total gap between your projection of steady 2014 revenue and actual revenue over three years would be negative $800M.

OIG Interests

A sampling of news articles imaged below.  The drop in molecular spending 2014 -> 2015 was noted in a 2016 OIG report here.

Brief Blog: CMS Posts Its Preliminary Determinations for Codes under Lab Crosswalk Process

This year, CMS is providing "crosswalk" prices for about 100 laboratory CPT codes, including brand-new CPT codes for 2019 and new PLA codes that met the June 2018 deadline.

On September 21, 2018, CMS posted its proposed prices for public comment.

• Find them here.

About 18 codes under the summer gapfill comment and revision process have not been posted yet.

Sometimes in the past CMS has given pretty telegraphic reasons for its choices.  For example, if different stakeholders suggest three codes, CMS might say it has chosen one of the codes "because it is more appropriate."  Well, yes.   This year, CMS gives an introductory explanation of some of its concerns with the range of pricing suggestions.   See the CMS document, but I summarize as:

1. Multipliers.  Stakeholders can suggest multipliers, and CMS can use them, but CMS says that rationales may be scanty or inconsistent.   CMS strongly prefers a crosswalk without any multiplier.
2. Stacking CDLT codes.  PLA tests may seem to bundle multiple existing codes.  Since economies of scale may be uncertain, CMS will tend to recommend gapfill pricing.
3. Lots of genes.  Since only one large-scale code is available (81455, 51+ genes), CMS prefers to gapfill these codes.
4. New BRCA codes.  In 2019 we will be facing a mix of new, revised, or deleted BRCA codes.  For pricing, Tier 2 MoPath codes were used when possible (81405, 81406).

In last year's exercise, in proposed fall pricing, I believe CMS very rarely recommended gapfill, but switched to gapfill for some codes after fall comments.  Here, CMS seems to take the opposite starting position, to recommend gapfill in September more liberally (I believe on 14 codes, agenda numbers 6, 7, 9, 11, 17, 18, 22, 23, 35, 37, 40, 42-44).

CMS used Tier 2 code crosswalks often, such as for BRCA codes and even for codes (Tab 49, 80X00) where almost no one else recommended a Tier 2 code.  I tallied the phrase "CMS disagrees" 10 times, but CMS seems to indicate in its preamble that it "disagreed" 15 times.  Sometimes it's murky, since panel recommendations were occasionally widely split, so CMS might have agreed with somebody.

CMS accepts comment until October 22 at an email posted in the PDF.

Impact on Future Stakeholder Comments and PAMA Expert Panel

If CMS chooses to follow these rules, it reduces the impact of the PAMA expert panel and stakeholder comments by automating more decisions.  High gene count codes or codes that incorporate several codes go to gapfill.  Codes for which multipliers are suggested are likely to get "times 1" without too much debate.   Finally, remaining codes would get the most obvious Tier 2 crosswalk unless a clear single specific crosswalk is obvious. 

Gapfill Process is Better?  Why?

In several codes, CMS states that "the gapfill process will yield better information."  However, medical directors under the gapfill process are unlikely to have any new information that isn't or can't be provided by stakeholders during the CLFS pricing process.  Pretty much anything you would submit to MACs in December you can submit to CMS staff in the same format this summer.

If CMS declines to price small novel gene panels assembled in groups under one new code, because of concerns about (economies of scale), labs will simply bill them individually, in which case they add up individually and there are no economies of scale recognized.

Multipliers Become Small

CMS did allow a multiplier of x2 on a couple codes (e.g. 0061U) but in cases where stakeholders had started by asking for x8 or x12.

Enhanced Analyses - CMS Says Meh?

A few codes with enhanced analysis were proposed to crosswalk to existing prices.  For example, 0046U is FLT3, quantitative, and was crosswalked to 81245, FLT3, qualitative.  (Most panelists proposed gapfill.)   This is a code from Invivoscribe, whose former executive Tim Stenzel MD PhD now heads Diagnostics at FDA.   According to CMS, no stakeholder recommendation arrived for this code.  MolecularMD requested 81206 x 2.5 for its high sensitivity BCR/ABL test, which is FDA approved, 0040U.    CMS proposed 81206, x 1.  Its 510(k) refers to a predicate de novo 510(k) product from Asuragen.


Neurologic Expanded Repeat Genes

A lot of the new codes were neurologic expanded repeat genes (see open access review here); crosswalked to 81401, Tier 2 Level 2, $137.  These numbered close to 30, being most of the codes tab 67 to tab 99.  Exceptionally something else happened (e.g. tab 68, 8X002, AFF2, crosswalked to 81404).  A few codes found in this range were different analyses (e.g. tab 80, 8X014, full sequence).  The granddaddy of this series is 8X026, Huntington's disease (81401).


FISH Code Enters CLFS Pricing Pathway

Traditionally, CMS has classified FISH and IHC as "physician pathology services" set by RVUs on the Physician Fee Scedule, and absent on the CLFS.   Here, AMA code 0053U, oncology, prostate needle biopsy, FISH of 4 genes, is in the CLFS process and being proposed for gapfill into the CLFS fee schedule.  CLFS codes do not trigger copays, and molecular CLFS codes are exempt from outpatient hospital bundling.  Pathology codes (FISH, IHC) do trigger copays and I believe are sometimes bundled to hospital surgical procedures.

Very Brief Blog: OIG Releases 4th Annual CMS Lab Payments Report

PAMA created a new pricing system for CMS labs in 2014, and also a requirement for annual OIG reports.   OIG has issued its fourth annual report, covering both Part B independent lab payments and also Hospital Outpatient Reference Lab payments, for CY2017, in September 2017.

• See the OIG 4th Annual Report here.
• Appendix A provides links to prior OIG reports.
• See coverage at 360DX here.

1% of labs received 55% of Medicare payments for the top 25 tests.

In this blog, I summarized data from Part B CY2017, and also provided links to the CMS spreadsheets.  My article focuses on the top 10 molecular codes.  That article is here.

By code, the highest paid codes were 84443 (TSH), $484M, blood panel 80053, $473M, CBC 85025, $432M, lipds 80061, $415M, and Vitamin D 82306, $348M.   Next up were 22 or more drug tests, G0483, $307M, and A1c 83036, $257M.  The highest molecular test, Cologuard, 81528, came in #12 overall at $117M.

Comparing data from the 2017 CMS spreadsheets for regular Part B independent labs and the OIG summary data (which includes hospital reference labs) allows the hospital lab billing to be imputed at least for the top 25 codes for which OIG provides data.

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The OIG report provides summary data only on the top 25 CPT codes.  Obviously, they could easily provide a cloud link to a table or spreadsheet with all the codes.  

Per the report's Exhibit 2, 1% of labs got 55% of payments; 5% of labs got 79% of payments.  The remaining 95% of labs got 21% of payments. 

Very Brief Blog: NYT Says that Sloan Kettering Pathology/Venture/Startup Deal "Ignites Uproar"

In a article Friday September 21, 2018, New York Times writes that a deal between Memorial Sloan Kettering, its pathology department, and a spinout venture capital funded company has "ignited a new uproar."

According to the Times, MSK's spinout, Paige.AI, received $25M in new venture funding earlier this year and in return for a 9% institutional equity stake, has exclusive rights to findings from a 25 million-patient slide archive.  According to the times, the archive represents not only patient tissues but "decades of work by its world-renowned pathologists." 

The article describes various facets of the project while stating that: "Experts in nonprofit law and corporate governance questioned whether Memorial Sloan Kettering, which is a charity, acted properly in what is known as a related party transaction..."  The concern seems to be that decision-markers in greenlighting the project were also stakeholders in the project itself.

See the article here.   The Times describes this as "a new uproar" because in the last few days the chief medical officer resigned after concerns about publications that lacked full conflict of interest disclosures - here.

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The Times mentioned Paige.AI in a September 14 editorial, but only in passing.  For a February 2018 article about the project launch, TechnoCrunch here.

The Times article today notes that the prior chairman of Pathology (2003-2011) was critical of the deal made by the current chairman (2013-present).

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Update.  In separate news, in November 2018, Mt Sinai Icahn School of Medicine announced $200M investment plans in a genomics/big data/drug development program (here).

CMS Released CY2017 Claims Data by State

CMS posts annual public Part B data three different ways.

• CMS posts national Excel files for all CPT codes with utilization and dollars paid (here).   
• It posts state-level Excel files by MAC subcontract.
• E.g.. the Noridian subcontract for Utah is one file, the Noridian subcontract for Arizona is another file).  
• See the state level 2017 data here.  
• Later - probably around April 2019 - CMS will post physician & lab level claims data for 2017.  
• That will appear here.   

The state level data appears on the linked webpage as three zip files with a dozen or so Excel spreadsheets each.   Each spreadsheet is named by a Part B MAC contracting zone (usually a state).  You need to read the "Part B Carrier Readme File" pdf on the same webpage to uncode the contractor zones that label the spreadsheets.

I've all put a single zip file of all 50-plus spreadsheets plus the PDF index into the cloud in one zip file here.

State Level MoPath Data

While it's often low utility, tedious, or both, to look at state level data, a few examples.

We know from the national file (link above) that CMS paid $115,586,444 nationally for MoPath unlisted code 81479 in CY2017.   We see from these state files that $44,201,329 was paid in SoCal and $14,533,690 in NCal, totalling $58,735,019 for 81479 or 50.8% of the national spending on 81479.

Utah (03502) has historically led the nation in CMS BRCA payments.  Utah garnered 2017 payments of $30,938,308 for 12,360 uses of BRCA consolidated code (Seq, Dup Del) 81162.   This is relative to nationwide payments of $52,484,618 for 21,018 uses of 81162.    In Utah there were 500 payments for BRCA codes 81211 and 1,244 payments for BRCA code 81213 (respectively $1,044,115 and $728,872).

CMS Released CY2017 Part B Utilization Data by CPT Code; Including Molecular Codes

A little earlier than some years, CMS released the national Part B fee for service data for CY2017.   See the data website here.

In this blog, I'll focus on molecular CPT code data, with some brief references to data from CY2016 made available last November (here).

As a baseline from the prior year, for code range 81162-81599, I tallied $479,894,633 in "payments allowed" in 2016, which was about the same as in 2015.  (Sharp, $100M-level cutbacks in pharmacogenetic spending was enough to level the annual year-to-year total of all MoPath payments for a while.)

• Update: Separately, OIG published its fourth annual review of CMS lab payments, which includes hospital outpatient reference labs not included in the Part B data.  Since it includes outpatient reference labs its numbers are always a bit higher.   Here.

Total MoPath Spending Rises, $480M to $644M

For CY2017, the new data, for molecular pathology I tally $644,228,102, a 34% increase year-on-year. 

For all lab spending in this code series, $6.9B.  For example, chem panel code 80053 had 29M uses for $322M dollars at $11 a test.  Net-net, MoPath is circa 10% of lab spending in 2017 data.

10 Codes Get 73% of Spending

As in recent years, MoPath spending is highly concentrated.  Although CMS lists about 175 codes, the top 10 codes get 73% of all spending.  At $118M, Cologuard was 18% of all spending, about tied with the unlisted code 81479.  Oncotype Dx and BRCA 81162 followed with 10% and 8% of spending, respectively.  See table below.

CY2017 Top Ten MoPath Codes (Total Spend $644M)

click to enlarge - Dot Plot of 2017 Allowed Payments by Code

Cologuard Zooms

In CY2016 CMS data, Cologuard was only $62M, on par with BRCA and Oncotype Dx.  In CY2017, it was almost $120M.   Correspondingly:  At end 2016, Exact Science's stock price was about $19, at end 2017, about $50.  (Today it's $76, with a market cap of $9B).

Note that 2016 to 2017 spending rose from $480M to $644M, or +$164M, of which about $60M was accounted for by the growth in Cologuard alone.

BRCA Coding Shifts

BRCA spending totaled $75M, with $52M now being spent under consolidated BRCA code 81162, which pays a few hundred dollars less than the legacy stack coding approach to BRCA (81211+81213), which garnered only about $9M in CY2017.   BRCA panel codes 81432/33, received about $13M for about 12,000 cases.   The shift to 81162 coding impacts CMS spending in 2018-2020, since (legacy 81211+81213) pricing is stable during this period while 81162 pricing drops 10% per year under PAMA.

There is a major revamping of the BRCA code set for CY2019, but coding to services like BRCA1 alone or BRCA2 alone are next to nothing, at least in CMS data.

click to enlarge

Unlisted Code 81479

The second highest code was the Unlisted Code for Mopath, 81479.  At least as of a year ago, nearly all 81479 spending came through MolDx MACs, and almost none elsewhere.  CMS has now asked MACs to report use of unlisted codes by labs (here).   Use of unlisted codes is incompatible with the payment system set up by PAMA.  Use of 81479 rose a little from 2016, $108M, to 2017, $118M. 


Tier 2 Codes

Collectively, the Tier 2 codes (level 1-9) garnered $72M. 

click to enlarge - Mopath Tier 2, Level 1-9

While about 60% of utilization was in Level 1 and 2, these levels had only 28% of payments.  Levels 7,8,9 had 13% of utilization and 41% of payments. 

Tumor Panel Codes

Tumor panel codes for CY2017...81445 had 1,428 uses for $807,000.   81450 had 3,378 uses for $2.2M.   81455 had 4,351 uses for $2.8M.   Together these tumor panel codes were about $6M or just about 1% of genetic/genomic spending at CMS.  Note that 2017 is the same year that CMS proposed its complex NCD on NGS panels in cancer. 

There were no payments for 81415 (exome) or 81425 (genome).

CYP Codes

CYP codes have falling from over 50% of MoPath spending to just a couple percent, from 2014 to 2017.  See separate article here.
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In the data above, I haven't included PLA codes and Admin MAAA codes, which CMS has in a separate spreadsheet.  Impact would be minimal.
It's no masterpiece, but I've included the worksheets used, in the cloud here.

FDA's Gottlieb Gives Major Address on Antibiotics Policy; Cites Need for Payment System Reforms

On this blog, we noted in June 2018 that FDA had used a press release website as an opportunity for Dr. Gottlieb to ventilate some innovative policy ideas about US payments and incentives for antibiotics, here.

On Friday September 14, 2018, the Pew Foundation, which has a major issue in areas like antibiotics and sepsis, hosted FDA Commissioner Gottlieb for a speech on new and innovative FDA initiatives on the major public health issues of antibiotic development and microbial resistance.

• Dr. Gottlieb's prepared speech is online at FDA, here.
• FDA rolled out a new consolidated website on "Emergency Preparedness and Response: Antimicrobial Resistance," here.
• The PEW Foundation website for the event, including Dr. Gottlieb and a panel, is here.
• The speech and panel stream on YouTube, here (1 hr 38 min).
• Unofficial transcript here (32 pp).   
• Trade press on the conference here, here, here.  Coverage at Endpoints here.
• FDA also released a Request for Information seeking input on setting priorities in antibiotics and microbial diagnostics, here.
• For excellent coverage at Forbes by Bruce Y. Lee, here.  
• See also John Rex MD's blog, here.

While the FDA doesn't directly control payment (or payment rules and systems) at all, the speech and panel touched directly on "payment" 8 different times, "econonomic" 9 times,  "incentives" 10 times, "reimbursement" 10 times and "market" 32 times.  "Diagnostic" appears 25 times.

Extensive direct quotations from the PEW event in regard to payment systems and device innovation follow, after the break.

In addition to efforts at FDA, CDC, and at NIH, the federal government funds BARDA, the bioterrorism research fund.  One major effort is an international public-private partnership called CARB-X, aimed to stimulating the early stages of innovation for new-generation antibiotics despite the market forces that make this difficult.  See BARDA here, CARB-X here.   BARDA also has a new 2018 effort in sepsis innovation and in part, diagnostics... here.  Trade press for BARDA's new Division of Research, Innovation, Ventures (DRIVe), here. 

There is also a Presidential Advisory Council on antibiotic resistance, PAC-CARB, here.  (Its next meeting is January 30, 2019; its September 2018 meeting is here, including an Abx stewardship report by Dr Cosgrove of Johns Hopkins here.)

Rick Bright, the head of BARDA, attended the conference, getting a call-out from Gottlieb.

Gottlieb left quickly after his speech, after taking one question from Politico and one from Stat.  The following panel was comprised of FDA senior leadership in the four relevant divisions - Edward Cox from Office of Microbial Products; William Flynn, Center for Veterinary Medicine; Steven Gitterman, Microbiology Devices, CDRH, and Carolyn Wilson, CBER.

For an article from Bloomberg on the antibiotic development crisis, here.  There is also an academic literature on antibiotics R&D economic bottlenecks, see e.g. here and here and here. 

There's an interesting discussion of something I hadn't heard of, a program called SHIELD to create powerful real time EHR based sharing of antibiotic resistance data from hospital labs.  See an impressive deck by FDA's Michael Waters on this, here. See Gottlieb's comments on that topic, below the break, in the transcript.  It's part of a broader set of important efforts called NESTcc.

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In a speech within a week, Janet Woodcock of CDER also took a market-based approach, decrying the impact on generic manufacturers of the monopsony power of drug wholesalers (here).

Brief Blog: What Is the "Society to Improve Diagnosis in Medicine" ??

On September 14, 2018, the trade journal Healthcare Dive carried a story, "Intermountain, Geisinger Form Group to Improve Diagnostic Accuracy."   OK - what?  The tag is, "More than 40 healthcare organizations and patient advocacy programs launched a campaign to cut down on diagnostic errors and ensure timely treatment for patients."

I knew this:  It's a topic the National Academy of Medicine has written about.  See the homepage for their initiatives here.   This workstream inside NAM issued a 2015 450pp report on diagnostic errors in medicine (here) and also held a 2017 follow-up on reducing diagnostic errors (webcast and 37pp briefing book, here). 

Here's the organizational story for SIDM/ACT.

Society to Improve Diagnosis in Medicine (SIDM)

First, the overlying organization is called, the Society to Improve Diagnosis in Medicine or SIDM.   It's homepage is simple:  www.improvedianosis.org  .   A 501(c)(3), its mission statement is: "The Society to Improve Diagnosis in Medicine catalyzes and leads change to improve diagnosis and eliminate harm from diagnostic error, in partnership with patients, their families, the healthcare community and every interested stakeholder."

SDIM Conferences & Members

They have three conferences in 2018/2019:  In Bern this past August 2018, in New Orleans November 4-6, 2018 (11th Annual), and in Melbourne April 28-30, 2019.   Calendar here. 

Twitter here.   

Founding members of SIDM were a group of individuals, there are corporate members (including e.g. Abbott), and health provider and  non profit members (including the Gordon & Betty Moore Foundation and Permanente Medicine).  David Newman-Toker of Johns Hopkins is current President.   Paul Epner is the CEO and founder of SIDM.

The New News:  
40 Organizations in SIDM's New "ACT" Coalition

The "new news" is a September 13, 2018 press release from the SIDM, announcing that 40-plus healthcare organizations launching a diagnostic accuracy effort.  Press release here.  This effort is separately branded as, ACT: [ Accurate Communicated Timely ] For Better Diagnosis.  The full press release is worth reading.  There is a generalistic reference to "federal liaisons" including AHRQ, CDC, CMS, VA, here.

Now, ACT has its own website too:  https://betterdiagnosis.org/ .

ACT has this introduction:  More than 40 of the most prominent healthcare and patient advocacy organizations joined together to form the Coalition to Improve Diagnosis and launched ACT for Better Diagnosis(tm).  The goal is to improve the diagnostic process by identifying and spreading practical steps that everyone throughout the healthcare system can take—from patients and physicians to laboratory scientists and health system leaders. By working together, the Accuracy, Communication, and Timeliness of diagnosis can be improved.  ACT for Better Diagnosis is an initiative of the Society to Improve Diagnosis in Medicine and supported by the Gordon & Betty Moore Foundation and The Mont Fund. 

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click to enlarge - ACT organizations (9/2018)

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Several of the press releases state that the FY2018 Omnibus Appropriations Act has the following language:   The FY 2018 Omnibus Appropriations Act included language emphasizing that improved diagnosis is a “moral, professional, and public health imperative” and requested that “the Agency for Healthcare Research and Quality (AHRQ) convene a cross-agency working group to propose a strategy to enhance scientific research to improve diagnosis in healthcare.”   I couldn't find this wording in the version of Omnibus Appropriations that I had access to (here).  "Moral, professional, public health imperative" is a wording that National Academies have used in regard to diagnostics (e.g. here).





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Sunday Reading: Is Your Dog's Genetic Testing Your Best Health Investment? (Would you ask that question?)

Trifecta of recent articles on the value and the marketplace for pet genetic testing.

DTC - Direct To Cat?

• The original article appeared in Nature, July 26, 2018, by Moses, Niemi, and Karlsson.  It's open access here.
• At the time, see a story on NPR, by Carey Goldberg, here.
• In September 2018, a follow-up story with additional reporting by Jessica Hekman, here.

Health economics for hamsters?

MolDx Proposes Coverage for Pharmacogenetics Panel: A Win for AltheaDx

Palmetto MolDx has posted new LCDs for its October 1 CAC meeting.   Several are duplicates of LCDs that I already recently highlighted because they will appear in the next CGS MAC MoLDx meeting - here.

But also: a new LCD appears. 

This one proposes coverage for a pharmacogenetics test, NeuroIDgenetix® Test for Depression, draft LCD DL37865.   The test was developed by Althea, a San Diego-based genomics laboratory. 

The LCD is quite detailed and will grant coverage of the gene panel test in patients with treatment resistant depression who are -- under age 65.   The company supported a very well done and large randomized controlled trial (685 patients), Bradley et al.  See Pubmed here, journal open access here.  Although a large age range was eligible for the trial protocol, nearly all patients actually enrolled in the Bradley trial were -- under age 65. 

The LCD provides a very detailed clinical setting review, discussion of unmet needs, and lays out a carefully written clinical and technological assessment of the test. 

Public comment is open from October 1 to November 15.

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Note that the lab science of PGx is quite complicated.  If you've never delved into this area, see a review in CAP Today, August 2018, here.  See also an August 2018 Genomeweb article here linking to a Pharmacogenomics paper by Caudle et al. here (PMID 29914287).

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Screen shot from Bradley et al.   The publication is open-access.

Genetic testing raised remission rates (red bars)

click to enlarge

FDA's Gottlieb Speaks Out Strongly for FDA Diagnostics Law Reform; Plus Third-Party Review & Consensus Standards & Dhealth

On September 13, 2018, FDA Commissioner Gottlieb gave a major speech endorsing substantial reforms, including new law by Congress, to help the FDA be innovating in supporting diagnostics and precision medicine.

Recall that on August 3, 2018, FDA responded to the Hill's lengthy diagnostics reform bill (DAIA) with a 60-page model of its own statutory reform for diagnostics review.  The reform would nix the legacy 510K and PMA systems for diagnostics and set up a new review paradigm.   Entry point here.

Today's speech was at the Blueprint for Breakthroughs / Precision Medicine conference sponsored by the Friends of Cancer Research (FOCR).  See agenda here.

Scott Gottlieb's speech is online at FDA here, and a rapid review by RAPS is here.

There's no question that the FDA ship is steaming to legislative reform.  Gottlieb states in part:

In pursuing a new framework for the appropriate regulation of diagnostics, there will be difficult policy decisions to make and tradeoffs on any path to legislation. We know that the FDA must be flexible and open minded to new approaches that best meet the needs of patients so that patients can have confidence in the results and the treatment that comes from it. That’s the spirit of our proposed reforms. 

FDA’s Center for Devices and Radiological Health has taken exactly this approach in providing feedback to Congress on proposed diagnostics legislation.  We have embraced a more modern, flexible approach to promote the extraordinary innovation that’s already well underway in this space, while ensuring patient protections.

In providing the contours for such a pathway to Congress, we’ve proposed new regulatory concepts that reflect some of the core principles we believe are fundamental to efforts to modernize diagnostics oversight.

He goes on to discuss key points from within the 60-page legislative "brave new model" released by FDA on August 3.

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Gottlieb had flagged his interest in statutory reform for diagnostics at his ACLA speech in March 2018, here.

(!!)  Note that the "reform of diagnostics regulation to encourage innovation" as discussed above is also closer interlinked the topics I list below, particularly "third party review" and "use of consensus standards" in applications and approvals review.
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Third Party Review
In other important FDA news, this week FDA released a new guideline for 3rd-party review for 510(k), under which organizations like New York State or CAP might do most of a 510(k) test review.   Here (entry point and links from RAPS).

The draft guidance document is here (22 pp) -- and see a quite interesting 16-page white paper proposing to minimize FDA interference after a 3rd party review; here.  (This minimization of FDA re-review is called, "Giving 3rd Party Reviewers the Tools They Need to Succeed."  Nice spin.)

Harmonization / Consensus Standards

Also, FDA released guidance on use of harmonization and consensus standards, here (entry point and link from RAPS).   Recall that FDA released guidances a few months ago on use of NGS clinical genetic databases as part of validation; this is at least a second-cousin to the concept of consensus standards built into FDA applications and approvals.

Digital Health

FDA also released a joint statement from Gottlieb and from the head of Devices, Jeff Shuren, on the FDA's commitment to innovative review and authorizations in digital health, here.  This particular announcement seems to be a restating of their commitment to innovation and not stopping the trains by over-regulation, but they also note they plan to create a new "Center for Digital Health Excellence" inside FDA soon.

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For comparison see last year's Friends of Cancer Research conference (September 2017):   agenda here, summary here, and FDA deck here.

House Tweaks, Passes LCD Transparency Bill; Moves to Senate

Local Coverage Determination Clarification Act of 2017

Last year and as recently as mid August, this blog covered the progress of the College of American Pathologist's legislative effort to increase LCD transparency.  See my August 17, 2018, blog here.  See an earlier October 2017 blog here.

On Wednesday, September 12, 2018, the House revised then passed legislation on LCD transparency.   See some links here:

• CAP press release here.
• CAP applauds the move, but wishes a few legislative points hadn't been deleted.
• Statement by CAP president here.
• CAP's topic web site here.
• Track HR 3635 text online here.
• Up to the vote, the bill had garnered 81 co-sponsors.
• See a YouTube pitch for the bill by Rep. Lynn Jenkins (R-KS), 5 min, here.
• Transcript here.
• After one day, the video had 1 hit, zero likes, zero dislikes.
• See a September 20 article at 360DX, here.

I've clipped the CAP press release below the break.  Advamed supports the bill, here.

Note - Notably, CMS has still not officially and fully implemented through instructions to contractors, the smaller legislative reform for LCD clarity passed in 12/2016 in the 21st Century Cures Bill.

Youtube - one hit, zero likes, zero dislikes.

Brief Blog: FDA & Payers: Does a New Press Release Make It New?

In February 2016, FDA published a notice in the Federal Register announcing a program through which it invited commercial payers to participate in helping developers understand the differing requirements of payers for coverage decisions and FDA for regulatory decisions.  I covered this and provided links here. 

Now in September 2018, there are a spate of very similar articles about FDA gearing up its integrated program of communications jointly with commercial payers and FDA.   See an article in Health Payer Intelligence here.   The flurry of "new-news" is stimulated by a September 5, 2018, speech by Commissioner Gottlieb at the Medical Device Innovation Consortium, here.   The full speech highlights other FDA innovations related to devices besides the payer consortium channel.

Does "new" rhyme with "deja-vu?"   It happens. (In fairness to my deja-vu assertion, in a blog Gottlieb does mention the PPP or Private Payer Program dates to 2016). 

73 Inquiries Into CMS-FDA Parallel Review

In a September 2018 blog, here, Dr. Gottlieb notes that the agency has logged 73 inquires about FDA-CMS parallel review (towards NCDs) and received 36 formal applications for the same, although only 2 NCDs have resulted (Exact Sciences Cologuard and FMI F1 CDx).   

CareFirst HealthWorx; CareFirst and FDA

Two payers highlighted by Gottlieb are United Healthcare and CareFirst, the latter known for its entrepreneurial investment program HealthWorx.   Besides UHC and CareFirst, other associations to PPP have included BCBSA, Duke, ECRI, Humana, Kaiser, and NICE.

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Company/Payer HEOR communications

A different topic also involves FDA, regulatory guidance, and payers.  In February 2017, FDA issued a draft guidance on communications from companies to payers of data from health economic studies that is not necessarily on the product's FDA labeling; here.  Said guidance was finalized in June 2018, here.   Dr. Gottlieb issued a blog.  For commentary by Peter Neumann and Harry Weissman in Health Affairs, July 2018, here.

News Watch: Genomeweb Article on Oregon's Position on Oncology Gene Panel Tests

For those with a Genomeweb subscription, see Turna Ray's deep-dive story on responses from cancer groups to an Oregon policy statement against coverage of somatic mutation gene panel tests in cancer.

The September 11, 2018, Genomeweb article is online here. 

In brief, the Oregon Health Evidence Review Commission has a busy rolling schedule of policy meetings (calendar here).   Health tech assessment meetings are here.   The June 28 meeting assessed single fraction radiotherapy for palliative care and then assessed "FDA approved next generation sequencing tests."

• See Agenda here, 
• Evidence review materials here (NGS at page 32ff),*
• Minutes here (minutes on Foundation One are just a few sentences).    

The Genomeweb article discusses the role of OHSU's Vijay Prasad, a noted commentator on evidence for precision medicine.  The responses of various cancer groups are discussed.

According to Genomeweb, one of the issues discussed by stakeholders is the pan-cancer coverage under the NCD and the question of who will be tested under a potential Oregon Medicaid program.   One stakeholder notes the differences in approved drugs for lung vs prostate cancer and said the difference was "apples and oranges." 

Data is publicly available for the distribution of recent tumor types in the tissue archives used for FMI and MSKCC IMPACT test authorizations.   I summarize these below.  MSK reported 17 tissue types, 10,554 blocks, of which the top 5 (58%) were lung, breast, colorectal, prostate, and glioma.  FMI reported 38 tissue types, 80,715 blocks, of which the top 5 (58%) were lung, liver, lymph node, brain, and colon.   Prostate, for example, was 8% of MSK cases and 2% of FMI cases.**  Alternately, prostate volume at MSK was 44% of lung volume, but at FMI, prostate volume was 9% of lung volume.

click to enlarge

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Oregon also hosted the OHSU Evidence Based Practice Center, which is supported as part of the national network of practice centers that contract to organizations like USPSTF and AHRQ.

For a negative article on precision medicine in New York Times, appearing the same day as this Genomeweb article, here.

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* Page 6 of this document discusses recent review of Oncotype Dx and a "weak" recommendation for coverage in breast cancer patients with 1-3 nodes.

** For 5 tumors found in both top-ten lists, by percent of that lab's cases, the correlation between the FMI and MSK percentages was r = 0.7.

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2017 FMI 1130 FDA P170019B Tumor Types b.xlsx

Very Brief Blog: CMS Updates Public Meeting Video: Streaming Yes, Youtube Archive No

• CMS has a Youtube channel, CMSHHSgov, available here.
• Through 2017, CMS both streamed and archived video of major meetings.  
• The new policy appears to be streaming-only and no archive.

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For the last several years, CMS has both streamed live its major medical policy meetings (such as MEDCACs and summer CLFS advisory panel meetings), and also, left them archived on Youtube.

See, for example, a summer 2017 MEDCAC here, and a summer 2017 CLFS meeting here.  An additional feature was that the live subtitling was preserved and could be pulled as a sort of transcript by tapping the "three horizontal dots" symbol below the video and clicking "open transcript."

So far as I can tell, the new policy for 2018 is more limited.  CMS continues to stream the meetings - which means, you could record or screen-grab them* - but CMS doesn't seem to post them as an archive any longer.

For example, unless you were in the office to watch and record the MedCAC on oncology outcomes a few weeks ago, on the day it was being streamed, you'll have to wait (potentially months) for CMS to post a transcript of it (assuming they will).  Other meetings, like CLFS meetings, never get a transcript.

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* For example,  I am inferring that MolecularMD captured and posted on Youtube the CMS webstream of its own 18 minute presentation and Q&A on June 25, 2018.  Here.  But the other five hours of presentations are gone.  I'd be happy if anyone can find the whole day's show ion the internet and point it out to me.

Very Brief Blog: Guardant Files for IPO

On September 6, 2018, news releases that Guardant, an oncology liquid biopsy test company in the Bay Area, has filed for an IPO.  Medcity News here.  At Nanylze, here. 

Medicare LCD coverage for Guardant was finalized over the summer, here.

• See Guardant Health's SEC web page here.
• See the S-1 filing here (277 pp).

Underwriters include JP Morgan, B of A Merrill Lynch, Cowen, Leerink, William Blair.

For a July 2018 Bloomberg article about a potential pending Guardant IPO, here.
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As noted at Nanylze, Foundation Medicine rolled out a next-generation of its own LDT liquid biopsy test, now called FoundationOne Liquid, September 2018, here.

For a historical comparison, the archived FMI S-1 filing from 2015, here.

Very Brief Blog: Friends of Cancer Research Holds 7th Annual "Blueprint" Precision Medicine Forum

On September 13, 2018, the Friends of Cancer Research will hold the 7th Annual "Blueprint for Breakthrough" forum Washington, DC, promoting precision medicine.

See the website here:

https://www.focr.org/events/7th-annual-blueprint-breakthrough-forum

It's a half day meeting (8:30-1:00).   It looks to me like registration is required but is free.

Scott Gottlieb MD, head of FDA, gives the opening address.   The first panel features presentations by Katherine Szarama PhD (CMS NCD), and Jonathan Hirsch (Syapse).   Reena Philip PhD, FDA molecular approvals, is also on this panel among others.   The second panel is on "supporting development of high quality diagnostic tests" and includes Timothy Stenzel MD PhD, the new head of diagnostics at FDA, as well as speakers from United Healthcare and Memorial Sloan-Kettering.

See the full agenda at the link above or cut/pasted here below the break (agenda as of 9/5).  The panel is supported and is co sponsored by Alexandria.

See some other fall precision medicine conference dates here.

Weekend Post: Business Models and Med-Tech Innovation

I live in California but frequently work in Washington which gives me a lot of coast-to-coast flights.  In August I had the chance to read two complementary books on business strategy.  These were "Reinvent Your Business Model," a new edition of Mark Johnson's "Seizing the White Space;" and "LEAP, How To Thrive in a World Where Everything Can Be Copied," by Swiss B-school guru Howard Yu. 

Both deal with innovation in a world where the competition comes every closer and the bar moves ever higher. 

Below, I highlight some points from each book and then show a Medtech Take-Away Lesson for each.

Reinvent Your Business Model: White Space and Customer Value Proposition

"Reinvent" describes a world where a company's core business will also be prey to competitors and it needs to constant upgrade its game or move into "adjacent markets," e.g. white spaces that require innovative twists to exploit.  Often, a white space is less competitive but requires altering one's business model.   For example, the iPod moved into a white space when Apple created the ITunes store, which was a wholly new service model for Apple, a desktop and laptop manufacturer at the time.   What Apple learned from ITunes applied forward to its iPad/iPhone App Store, and the rest is history.   Johnson focuses on the challenge of seeing such "white spaces" and exploiting the old core competence while adding the new one.

Johnson also talks about customer value propositions, CVPs, and asks three key questions:

1. How important is the job-to-be-done to customers?
2. How satisfied are customers with current solutions?
3. How well does the new offering get the job done, relative to other solutions?

Medtech Tie-In:  It occurred that most offerings in medtech and diagnostics also try to answer these three questions - we call it an unmet medical need, and improved clinical outcome - and Johnson's three questions capture medtech innovation as well.  (Note that you can't conclude, "if you build it, they will come.")

Medtech Tie-In #2:  In medtech, we have a weird mix of multiple disparate customers to satisfy - physicians, hospital purchasing staff, patients, health technology assessors, payers.  While working within the confines of a legacy and largely fixed payment system. More on that, in the next section.

Find "Reinvent" here and here.

LEAP:  Companies Evolve Onward and Upward

The main point of Howard Yu's book LEAP is that successful companies have to constantly reinvent themselves - clearly not to far afield from Johnson's vision that successful companies reinvent and move into their white space.   

LEAP talks about the history of Proctor and Gamble.  In the 1870s/1880s, it led industrial approaches to making consumer products like soap in giant factories, far above the scale of small business.   By the 1890s, Proctor and Gamble pioneered what we would today call focus groups and effective advertising.    In the 1920s, Proctor and Gamble pioneered bringing more advanced chemistry into the design of household products (something the pharma industry had just discovered in the past decade or two).   This led to Dreft soap in 1935, and Tide in 1946, both landmark product introductions.   Yu's point is that a (1) new type of industrialization, (2) a wholly new school of advertising built on focus groups, and (3) a new approach to consumer soap chemistry were three different core competencies that one company, P&G, was able to roll into over several decades and far ahead of any competitors.

Yu also makes the point that as time rolls on, today's cutting edge becomes tomorrow's commodity as competitors enter and as patents or other thought capital expire or diffuse.  Yu describes three fundamental zones of competition and differentiation:

• Product differentiation
•   Services differentiation
•      Business model differentiation

Product differentiation is obvious; new bells and whistles, faster-lighter, and so on.   Services differentiation can be key: for example, repairing your equipment twice as fast as the competition can repair theirs.   Business model differentiation could be, for example, sell versus lease, or "razor and blades" models or other ways of solving the business interface to your customer.  (Johnson, in Reinvent, presents business model differentiation as the secret sauce that is most often ignored or missed).

Medtech Tie-In:  Yu implies that other industries get faster, better, and cheaper as they roll through multiple cycles of (A) product, (B) services, and (C) business model differentiation.  

In Medtech, what do we always hear?   Don't, for god's sake, try to change physician practice or the way the system finances work (CPT codes, DRGs, and so on).   

If that's true, then medtech is left only with one avenue of differentiation - the first, product differentiation - which is good but only 2/3 of the innovation story, per Yu.   

We make it so difficult to change physician practice, or the way specialties are set up, or the way that forty-year-old codes and payment systems work, that we make many forms of innovation into a forbidden territory, or at least, about as inviting as an icy steep mountainside.  

Find LEAP here and here.

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The issue of complexity of our healthcare administration system is discussed in a new 2018 book by Etienne Deffarges, "Untangling the USA," here.