Medicare Toughens Rule on Panel Coding; Effective January 1, 2019

This post correct an erroneous, deleted post from yesterday December 26.

November:  Weirdly Complex Rules for Genetic Test Coding for January
In summary, around November 21, CMS released complex and confusing new rules for genetic test coding, shifting usage from direct CPT codes to 81479, the molecular test unlisted codes.  I discussed this at length in a post on November 21 here.  Basically, it nationalized a longstanding MolDx instruction to use 81479 in lieu of using two or more single gene CPT codes.

December:  CMS Tweaks Panel Coding Instructions for January
On December 12, CMS issued a further update to panel coding rules (CMS does not specify between chemistry and genetic panels in this rule).   CMS upgraded language from "should" to "shall" - if all components of a CPT panel are provided, the lab SHALL bill that CPT panel code.  The stimulus was a harsh GAO report that CMS was doing to little to enforce correct coding of panel codes (here).  Congress also asked CMS to pay more attention to correct coding/pricing of panels (here).

The updates are on the CMS Correct Coding Initiative website here.

Below, I list the new December 12 update.   After that, I again list the unusual and complex gene coding rules from November.  All of these are slated to be effective nationally on January 1, 2018.

December 12 Update

Correct Coding PDF Manuals
Chapter 10, Laboratory. Section C.

      The CPT Manual assigns CPT codes to organ or disease oriented
panels consisting of groups of specified tests.  If all tests of
a CPT defined panel are performed, the provider shall bill the
panel code.  The panel codes shall be used when the tests are
ordered as that panel.

     For example, if the individually ordered
tests are cholesterol (CPT code 82465), triglycerides (CPT code
84478), and HDL cholesterol (CPT code 83718), the service shall
be reported as a lipid panel (CPT code 80061)

Essentially the same instruction is found in Chapter 1, Section N, in part:

      The CPT Manual defines organ and disease specific panels of
laboratory tests.  If a laboratory performs all tests included in
one of these panels, the laboratory shall report the CPT code for
the panel.

Cumbersome November Genetic Update
Chapter 10, Laboratory, Section F Molecular Pathology

7. A Tier 1 or Tier 2 molecular pathology procedure CPT 
code shall not be reported with a genomic sequencing procedure, 
molecular multianalyte assay, multianalyte assay with algorithmic 
analysis, or proprietary laboratory analysis CPT code where the 
CPT code descriptor includes testing for the analyte described by 
the Tier 1 or Tier 2 molecular pathology code.  [OK, this one
seems pretty obvious to me, nothing new.]

8. If one laboratory procedure evaluates multiple genes 
utilizing a next generation sequencing procedure, the laboratory 
shall report only one unit of service of one genomic sequencing 
procedure, molecular multianalyte assay, multianalyte assay with 
algorithmic analysis, or proprietary laboratory analysis CPT 
code.  If no CPT code accurately describes the procedure 
performed, the laboratory shall report CPT code 81479 (unlisted 
molecular pathology procedure) with one unit of service.  The 
laboratory shall not report multiple individual CPT codes 
describing the component test results.  If a single procedure is 
performed, only one HCPCS/CPT code with one unit of service may 
be reported for the procedure.  [This proposal deviates massively from
normal coding, but resembles an existing "MolDx" rule applicable in 30
states called "Test Panel Alert" with the same intention but at
the MAC local level.]

9. Procedure-to-procedure edits bundling two Tier 1 
molecular pathology procedure CPT codes describe procedures that 
should not routinely be performed and reported together.  For 
example CPT code 81292 describes full sequence gene analysis of 
MLH1, and CPT code 81294 describes duplication/deletion variant 
gene analysis of MLH1.  In evaluating a patient with colon 
carcinoma (vs. constitutional genetic disorder), it may be 
appropriate to perform duplication/deletion testing if the 
disease variant(s) is (are) not identified by performing full 
gene sequencing.  The same principle applies to other code pair 
combinations of testing for the same gene (e.g., 81295/81297, 
81298/81300).   [Since in these scenarios typically say 2% of patients 
are positive for sequence and 2% positive for Dup Del, 98% of
patients would get Dup Del testing, resulting in mass use of the
-59 modifier.  And the allusion to tumor vs constitutional disorder is
confusing - does this rule apply to both patients? If so, why mention?
Tumors are more likely to have multiple mutations - sequence in Gene A, 
Dup Del in Gene B. Also the main tumor codes incorporate SEQ and
Dup Del testing together if performed, no separate coding, such as
81455 and the PLA code for FMI F1 CDx.]

I discussed the above genetic rules as cumbersome in a November post.  It seems like they would require sudden changes for non-MolDx labs and a lot of new work for non-MolDx contractors.  Also, I've heard that Medicaid must follow NCCI rules, which would be a new big burden.   The rules also would cause confusion due to their deviation from conventional correct coding in settings like "Medicare as Secondary Payer" or other settings where Medicare has to interact with the rest of the coding world.


Note that while other chapters of the NCCI manual for CY2019 have October 31 file dates (103118), the Chapter 1 and Chapter 10 versions in November had November 6 file dates, and they now have December 12 file dates.

(Weblink for post in error)

On Dec 26-27, this link held an erroneous post that CMS had deleted some unusual coding rules for genetic testing, rules that were released on Nov 22.  

While CMS made other policy updates on Dec 12, CMS did NOT change the genetic coding rules.

See original post about the new 2019 genetic coding rules here.

I list the new November rules (for 2019) for genetic tests below.  Thereafter, I also list a potentially important update to the Panel rules (if components of a panel are performed, lab SHALL bill that panel code.)   This latter update was December 12 (for 2019).  The December update on panel billing likely reflects the GAO report that CMS was overpaying for components of panel testing in some circumstances.

##
NOVEMBER UPDATE FOR CY2019

7. A Tier 1 or Tier 2 molecular pathology procedure CPT 
code  shall not be reported with a genomic sequencing procedure, 
molecular multianalyte assay, multianalyte assay with 
algorithmic analysis, or proprietary laboratory analysis CPT 
code where the CPT code descriptor includes testing for the 
analyte described by the Tier 1 or Tier 2 molecular pathology 
code. 

8. If one laboratory procedure evaluates multiple genes 
utilizing a next generation sequencing procedure, the laboratory 
shall report only one unit of service of one genomic sequencing 
procedure, molecular multianalyte assay, multianalyte assay with 
algorithmic analysis, or proprietary laboratory analysis CPT 
code.  If no CPT code accurately describes the procedure 
performed, the laboratory shall report CPT code 81479 (unlisted 
molecular pathology procedure) with one unit of service.  The 
laboratory shall not report multiple individual CPT codes 
describing the component test results.  If a single procedure is 
performed, only one HCPCS/CPT code with one unit of service may 
be reported for the procedure. 

9. Procedure-to-procedure edits bundling two Tier 1 
molecular pathology procedure CPT codes describe procedures that 
should not routinely be performed and reported together.  For 
example CPT code 81292 describes full sequence gene analysis of 
MLH1, and CPT code 81294 describes duplication/deletion variant 
gene analysis of MLH1.  In evaluating a patient with colon 
carcinoma (vs. constitutional genetic disorder), it may be 
appropriate to perform duplication/deletion testing if the 
disease variant(s) is (are) not identified by performing full 
gene sequencing.  The same principle applies to other code pair 
combinations of testing for the same gene (e.g., 81295/81297, 
81298/81300). 

ADDITIONAL DECEMBER UPDATE FOR CY2019
Word "should" changed to "shall"

The CPT Manual assigns CPT codes to organ or disease oriented
panels consisting of groups of specified tests.  If all tests of
a CPT defined panel are performed, the provider shall bill the
panel code.  The panel codes shall be used when the tests are
ordered as that panel. For example, if the individually ordered
tests are cholesterol (CPT code 82465), triglycerides (CPT code
84478), and HDL cholesterol (CPT code 83718), the service shall
be reported as a lipid panel (CPT code 80061)

Very Very Brief Blog: Medicare Approves a Second ADLT Lab Test (Biodesix "Veristrat" test)

Takeaway:  CMS has endorsed the Biodesix Veristrat test, 81358, as an ADLT, so it will get annual pricing.  The only prior ADLT was FMI F1 CDx, 0037U.
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Medicare's PAMA 2014 law, section 216, created a new pricing system, involving a triennial market-based repricing of the lab fee schedule.

In addition, PAMA defined a new test category, ADLT or Advanced Diagnostic Laboratory Tests.  These tests must be sole-source tests, and must be one of two types, (a) a MAAA type test or (b) a sole source FDA cleared or approved tests. 

CMS controversially added several additional rules for ADLT tests, such as the Type (a) tests must be dissimilar to any existing test.  (This wouldn't make sense for Type (b) tests, since they can be 510(k) tests).  In addition, Type (a) tests must be originated by the laboratory and, at least based on rulemaking tests, not licensed in from academia to a commercialization lab.

The only test until last week that was an ADLT was the Foundation Medicine F1 CDx test, code 0037U.   This test has been priced at its market price of $3500 for three quarters, July 2018-March 2019, after which point, it will be repriced annually at its FMI private payer market price.

Just in time for Christmas, CMS has created a second ADLT test on December 21, 2018. 

• See ADLT web page here.
• See PDF of "approved ADLTs," here.

The Biodesix test is approved as an ADLT test, but not as a new ADLT test (existing code 81358).  Therefore, it doesn't get any first-year special list price pricing.  Since it isn't new. 

However, Veristrat will be repriced annually as an ADLT, rather than every 3 years, as a regular lab test.  Its 2019 price is $2871.

Very Brief Blog: Nerd's Update on AMA PLA Codes at CMS

PLA-ology As We Enter 2019

Section 216 of the Protecting Access to Medicare Act of 2013 revamped the Clinical Lab Fee Schedule, setting it triennially to market prices.  PAMA 2016 also required CMS to create rapid codes for new lab tests, which CMS could do through G-codes.  However, CMS generally hasn't had to troupe out new G codes to fulfill its responsibility, because new proprietary codes - PLA codes - are released released quarterly by the AMA.  See AMA PLA webpage here.  The next PLA deadline is Thursday, January 10, 2019.

The new 2019 CMS Clinical Lab Fee Schedule has 56 PLA codes on it. 

(By today, AMA has also created 22 even newer codes that haven't made it on the CLFS yet.)

Codes present on the CLFS were issued as recently as June 2018, and the codes that were under the recent summer crosswalk/gapfill process were issued between October 2017 and June 2018.

Of the 56 PLA codes on the CLFS, 18 are under the "gapfill" process for CY2019.   (This means they will be pricing by local MAC contractors in 1H2019). 

They gives us a library of 38 PLA codes that *have* been priced by CMS, some as recently as this fall.

All the PLA codes that active for 1H2019 will be part of the next PAMA pricing cycle.   This next cycle is expected to collect market prices in 1H2020 based on insurance payments to labs in 1H2019.

PLA-ology or PLAtistics

The priced codes range from $15, for 0039U, a high avidity DNA antibody measurement (BioRad), to 0036U, $4870, exome tumor and somatic analysis, from the Weill-Cornell genomics laboratory.    0036U was crosswalked into the PAMA price for exome sequencing (81415).   (Note that there is institution across the street in NYC, Memorial Sloan Kettering, which has an FDA-cleared tumor gene panel test, MSK IMPACT, 0048U, which is being gapfilled).

Near the top of the price chart is the Foundation Medicine F1 CDx test, 0037U, 324-gene tumor panel, which as a FDA-approved ADLT receives an annual market-based price for itself.  It is currently $3500.

• 7 PLA codes price under $100.  
• 8 price above $2000.   
• That leaves 23 priced between $101 and $950.

Below, I give a chart of PLA codes that are priced by CMS, followed by a "click to enlarge" graphic of code names and prices.

click to enlarge

Anyone who's read this far seriously needs to get some new hobbies.  The data has a median of $247 and a mean of $918, with a (parametric) standard deviation of 1343.  Of course, the data is highly skewed and not a normal distribution (Excel skew value = 1.7) which means a parametric statistic like Std Dev is not meaningful. 

Very Brief Blog: FDA Hires Roche's Amy Abernethy For Deputy Commissioner

FDA has hired former Duke academic and medical industry executive Amy Abernethy MD as Deputy Commissioner.

Abernethy, once known for her work on the evidence supporting off-label compendia for oncology (here), is currently Chief Medical Officer for Flatiron Health, which was absorbed into Roche earlier in 2018.

Abernethy sits on boards of the Personalized Medicine Coalition, Athenahealth, and CareDx.

Read more:

• Bloomberg here.
• Cancer Letter here (open access).
• Fierce Healthcare here.
• Forbes here.

Some quotations from Forbes follow.

“She’s a highly regarded thought leader who has held numerous positions of leadership in her fields of interest and distinguished herself for her intellect, her passion for patient care and science, and her collegiality,” Scott Gottlieb, the FDA Commissioner, wrote in a memo to FDA staff announcing Abernethy’s appointment. 

Robert Califf, the previous FDA commissioner and a mentor of Abernethy’s, echoed Gottlieb’s praise. “In my wildest dreams, I wouldn’t have imagined Scott could come up with somebody this highly qualified,” Califf said. “So I think it’s really good for the country. I’m really excited about it.” 

Abernethy says that the role was too meaningful to pass up. “I had always thought I would go into government service, and I have always believed that one of the ways you make change is through policy and regulation,” she says. She hopes to work on speeding up the collection of data that can be used in clinical trials—“Historically, patient-defined concerns were always secondary, and the question is: How do you make the needs of the patient the obvious thing that we’re working on?” she says.

[Adding her interests in] making sure patients get the right treatment at the right time, including by using more genetic tests, an idea known as precision medicine. “The more we have precision medicine the more it means we stop doing things that don’t work,” she says.

Very Brief Blog: CMS Releases CY2019 Full Lab Fee Schedule

On Friday, December 14, CMS releasd the full CLFS fee schedule for CY2019. 

There aren't surprises; CMS is implemented PAMA cuts released in November 2017 for CY2019, and CMS is releasing gapfill pricing or new code crosswalk decisions that had been posted in recent weeks.*

Find the fee schedule here.

BRCA

New codes and pricing become effective January 1 related to BRCA testing, as shown in this table:

Gapfill

18 codes are under the gapfill process.

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Tidbits.

New code for inherited disorders panel, pan-ethnic, 81443, is the same price as Ashkenazi disorders panel, 81412 ($2448).

The CLFS has 2,015 lines, although some lines are duplicates with and without a QW CLIA waiver suffix (which doesn't change pricing, but allows the code to be paid outside a CLIA lab).   If you ordered every test once, it would cost $232,665.57.

The least expensive test is 81005, urinalysis, $2.41.  The most expensive is family member exome sequence (81416, $12,000) which logically should not be more than proband exome analysis (81415, $4780).   31 tests are over $2000.

As the result of gapfill pricing in recent months (over 20 stakeholders commented to CMS on this topic), whole genome sequencing is $5031 (81425), $2709 (81426 for family member), and $2337 (81427) for re-analysis.

After one of the longest journeys I have followed, and several years of changing prices at CMS, and a gapfill year, Sep9 landed at $192 (81327).  This represents the FDA-approved Epi proColon test.

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* I haven't manually checked if any proposed final gapfill prices from October 2018 have altered.

Obamacare "Struck Down;" Read Ruling Here; Judge Nixes CMMI and Biosimilars, Too

Update.
    January 2, 2019, article in SLATE reviews interim events and opinions, here.  Link to 30 page ruling by Judge O'Connor "staying" the impact of his decision but affirming his confidence in his decision, here.  (In addition to staying the impact, he deals at length with other considerations like assertions the plaintiffs have no standing.)  He argues that a stay is appropriate, although, at the same time, he sees no hint of feasible grounds under which his decision could be reversed during appeal (78 footnotes).

Another Update.
   January 2019 article in Health Affairs, here.
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Every news website today leads with news that "Obamacare has been struck down."   Rarely, an article provides a link to the actual 55 page ruling.

• NPR article summarizes ruling here.
• Actual 55 page judge's ruling here.
• The judge opens by writing, "A court must determine whether the Constitution grants Congress the power it asserts."
• The ruling as a whole has a number of instances of clever writing and wordplay.
• The ruling, as a matter of jurisprudence, has been criticized by many quarters; here.
• Axios points out that by striking the whole ruling, judge has struck down US Biosimilars Law, funding for the Indian Health Service, and the CMS Center for Innovation (on which Trump's fall HHS speech on drug pricing depends).

Washington Post notes that the ruling was not unexpected, as the judge was highly critical of Democratic state attorneys-general pro-Obamacare arguments in an earlier hearing (cited here).  Not helping would be the Administration's determination in June not to defend the ACA against this court action to terminate it.  Atlantic says that Chief Justice Roberts set up the chutes-n-ladders legal game that is now playing out and didn't need to, here.   Bloomberg asserts it's lose-lose for GOP, here.  Atlantic adds that "plaintiffs have no standing," here.  Slate collates legal pundits, mostly negative, here.

Fans are out there, too.  Author at The Federalist likes the O'Connor ruling a lot, here.  For a thorough and readable 39-page, 292-footnote, scholarly review of the case leading up to moment before Judge O'Connor's ruling, see Blackman, in press, here [click Download This Paper.]

The Jenga Game

Recall that several years ago, Supreme Court ruled that Obamacare was constitutional under Congress's taxation authority.  A mandatory tax element (for having no insurance) was resulting discontinued by the Tax Cuts and Jobs Act of 2017.   The theory here is that with a razor thin majority in the Senate, the Congress couldn't repeal Obamacare, but they could repeal one sliver of it, which might lead the rest to topple via a subsequent judicial ruling.   (Example of Jenga game, here.) Judge sees himself as one domino in a row of dominos, writing "the 2010 Congress enacted the ACA, the 2017 Congress sawed off the last leg it stood on (p.54)."

Nothing is Severable:
ACA as Consumer Insurance vs ACA for Medicaid & for CMMI 

WaPo writes that the judge concluded that the insurance requirement was "essential to and inseparable from the remainder of the ACA."   But the same WaPo articles states that by contrast, in June, US DOJ asserted that "many other parts of the law could be considered legally distinct and thus can continue."

• For example, Congress has passed many laws on Medicaid, and part of ACA expands Medicaid.  
• The Patient Centered Outcomes Research Institute is a creation of ACA.   
• And it's funded by a tax.
• ACA created CMS Center for Innovation, which has been a showpiece of several 2018 Trump administration efforts, including the bold recent one to potentially benchmark US Medicare drug prices to European average prices.   
• That very high-visibility Trump proposal stands on top of the CMMI authority, which is inside the ACA, which is axed by this ruling.  
• US Biosimilars law was issued inside of ACA.   For more, see National Law Review here.  While legally inside the ACA, this portion even had its own name, Biologics Price Competition and Innovation Act. 

Judge O'Connor does not parse the diverse sections of the ACA, but writes simply that "the Court adheres to Congress's textually expressed intent and binding Supreme Court precedent to find the Individual Mandate is inseparable from [all] the ACA's remaining provisions."  

The judge continues that: "the ACA includes many other integral regulations," but cites by name only those obviously related to conventional insurance, e.g. children remaining on parents' plans to age 26.  He simply describes the ACA's "hundreds of minor provisions [in] 900 plus pages of legislative text" as "complement[ing] the above mentioned major provisions."

After citing an 1879 case about the limits of judicial construction (e.g. to limit a part of a statute), and stating that "federal courts lack a roving license to flip through the US Code with a red pencil," judge concludes that ACA, Public Law 111-148, as a whole, is invalid.

See here:

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Severability - More.

Judge acknowledges that defendants do make arguments that, "by eliminating the shared-responsibility payment [AND] leaving the rest of ACA intact, Court should infer that Congress intended to preserve the balance of the ACA." (see page 52-54). 

But he disagrees.

In addition to citing an 1879 case about the limits of judicial construction [court not competent to pick and choose among parts of ACA], see lengthy footnote 34 against arguments in favor of more severability within the ruling.  Argues to 1928 case, Frost.  Quotation that "Frost's bite is not available [here.]"  Adds:  Frost is not a license for courts to reach out and hold unchallenged constitutional acts unconstitutional as a remedial safety valve...Because of how Texas structured its challenge, the district court [e.g. the writing judge]  is presented with a narrower menu of options with respect to severability. No one—not the Plaintiffs, not the Intervenors—has challenged the constitutionality of the TCJA."

And:
"Federal courts lack a roving license to flip through the U.S. Code with a red pencil to void one statute in order to save another."

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He Knew that She Knew that He Knew...

I wrote above that the Congressional tax action of 2017 foreseeably led to the 2018 court ruling.  The judge acknowledges that chain of events, as written above.  Judge notes that Congress did not strike down the Individual Mandate but rather the tax based on the individual mandate.  But the Individual Mandate, solo, had been ruled unconstitutional [not valid under Commerce Clause], at which point we only still had an ACA since it was saved by the existence of the tax, since Congress has tax authority.  But now, Congress has deleted the tax-text.

Judge doubles down on the message.  Congress knew it was unleashing a game of falling dominos:

"The 2010 Congress memorialized that it knew the Individual Mandate was the ACA keystone; Supreme Court stated repeatedly that it knew Congress knew, and knowing the Supreme Court knew what Congress had known...." 

Although I don't know if he knew it, Judge's citation to Blackman (vide infra) would include a SCPTUS quotation from Fausto (1987):  "Congress is presumed to act in full awareness of existing judicial interpretations."

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Inseparable?  Dependent on Tax Authority?  We Can Do That!

If you take for granted Judge O'Connor's position that the ACA, all 1000 pages of it, are inseparable, AND that it would depend on tax, not commerce, authority, there's lots of that.  It's got Medicaid in it, driven by taxes, so you've got legal Medicaid, legal taxes, and you've already said the other 999 pages are inseparable.  There's a tax on the medical device industry - that's one page of 1000, but we've stipulated inseparability.  There's also a tax on health insurance, which funds PCORI, the patient centered research agency.

Most Satirical Outcome

Supreme Court agrees with its prior position and O'Connor's ruling, that the now-deleted individual tax clause was pivotal to the commercial health insurance parts of ACA.  But SCOTUS determines that other parts are severable, and remands back to Judge O'Connor to figure out which pages of the 1000 pages are separable, and which not.

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Individual Tax and Hall of Mirrors

Ever since NFIB v Sebelius, there's been a hall-of-mirrors game.  That ruling - from a sharply divided Supreme Court - ruled that Congress doesn't have authority (under the commerce clause) to force people to buy insurance (since per that decision, it can't regulate non-purchasing as "commerce"), but it does have authority (like it or not) to put a tax on people who don't buy insurance, since its tax authority is nearly unlimited.   What if you put a tax of $1 on everybody, then refund the $1 to everyone who buys insurance?   Another angle is that without the individual mandate, the law may not make a lot of sense (due to insurance death spirals, etc) but conservatives would argue it's not the job of the courts to decide whether a law passed by legislators "makes sense" or not.

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Law Article Cited In Press

In the final footnote, Judge cites Blackman, "Undone: The New Constitutional Challenge to Obamacare."  It's in press in Texas Law Review, while the PDF can be downloaded open access here (39pp).  This is essentially a law-professor-level review (with 298 footnotes) of where ACA stood coming into 2018 and at the moment before Judge's decision.  Blackman cites Fausto, 1987, that "Congress is presumed to act in full awareness of existing judicial interpretations." (his fn 272).  Blackman, like O'Connor, favors an inseverable approach to striking down ACA, but like O'Connor, gives no moment of attention to its diverse non-insurance sections such as PCORI and CMMI and Biosimilars.

In an interesting wordplay, Blackman writes (p.37) that "the individual mandate and the tax cut can exist independently, but cannot exist simultaneously.  If the tax cut is invalidated, the individual mandate remains constitutional.  Conversely, if the individual mandate is invalidated, the tax cut remains constitutional.  Call it Schrödinger's Mandate."   
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Tweetwatch.

President Trump tweeted, "As I predicted all along, Obamacare has been struck down as an unconstitutional disaster." [block capitals omitted]   Obamacare, even with this ruling, was not "unconstitutional" til the 2017 tax reform.  It was effective law through a Supreme Court case in 2012.  It remained effective law through a second Supreme Court case in 2015.  Even this week's ruling only states that the law became unconstitutional after the 2017 tax act.  Not that it had been unconstitutional all along since 2010.

Very Brief Blog: AMA Posts Agenda for February 2019 Mtg; Dullsville for Lab Tests

The next AMA CPT meeting will be February 7-9 at the Westin La Paloma in Tucson (overall agenda here). 

Thursday February 7 is the CPT annual meeting, mostly policy updates and discussions.  February 8-9 is the Editorial Panel session for new codes.

The new codes have been posted.   If you were interested in commenting on lab codes, the public posting was November 19 and comments to November 30.   If you are interested in seeing and perhaps commenting on other codes, they are posted December 7 and comment open to January 17.  See the code level agenda here.

For the lab industry, not much.  Tab 13 deletes administrative MAAA code 0009M.  Stay awake, there's more.  Tabs 14 and 15 elevate Tier 2 codes to Tier 1, which is good news for fans of Palb2 or PIK3CA.   Tab 24 would create a Category III code for a stem cell cytotoxicity assay (my guess is this could have been proposed either as Cat III or PLA). 

About 50 Category III codes (as old as 0058T and as new as 0405T) are scheduled for a sundown discussion (more like sunset, I'd say).   

Very Brief Blog: My Brief Adventure with DTC Testing

Having worked in genomics policy for years, I have never explored DTC testing.  I ordered panel testing from Color and microbiome testing from Ubiome. 

Ubiome 

Ubiome testing was easier than I thought (you tap the paper with a swab).  A report took several weeks.  (A) I had no "pathogens," (B) my normal flora was "normal," and a range of I guess (C) particularly healthy bacilli (various lactobacilli) were reported separately.

Color

Kit. Color sent a simple kit with an empty vial to spit into.   After about 30 days, it provided a hereditary cancer panel, a heart health panel, and so far at 6 weeks has reported 2 of about 14 CYP genes. 

Cancer & Cardio.  I had no hits on the cancer panel (recall that the general prevalence of e.g. BRCA is well below 1%).

This wasn't surprising; Color "warns" you, so to speak, that most people will be negative in their tests.  And my extended maternal/paternal history is unusually negative for any cancers. 

I also had no hits on the cardio panel either (and I have no family history for A-Fib, for sudden death, or for familial hypercholesterolemia). 

CYP.  The first two available CYP genes came with strong click-through warnings not to change any meds without talking to a physician.   I was normal (intermediate) for CYP2C19 and CYP2D6. 

Color tells me that twelve more pharmacogenetic genes will be reported, but in up to six months.  I'm curious if I'm slow for CYP1A2, since I'm hypersensitive to caffeine.

Caveats.  I assume these tests look for the more common variants and if they aren't there, the default is "normal."

Glitches.

• Despite clicking around, I couldn't find a list of the 12 (yet to be reported) CYP genes.
• Despite clicking on a cardio link that promised "learn more about these genes," I didn't learn anything.  
• So I'd be left googling Wikipedia to figure out what cardio gene MYH7 was.   
• (I can guess that KCN and SCN are K+ and Na+ channels, but maybe my PhD in neuroscience helps there.)
• The "learn more" click for cancer was more helpful; for example, I learned if my APC gene was positive I'd have a very high risk of CRC. 
• Based on the various direct-to-consumer email traffic to me from each company, I believe each test was "ordered by a physician," somewhere, based on my age/sex/and very basic clinical checkboxes during enrollment.

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Cardio genes were:  ACTA2, ACTC1, APOB, COL3A1, DSC2, DSG2, DSP, FBN1, GLA, KCNH2, KCNQ1, LDLR, LMNA, MYBPC3, MYH11, MYH7, MYL2, MYL3, PCSK9, PKP2, PRKAG2, RYR2, SCN5A, SMAD3, TGFBR1, TGFBR2, TMEM43, TNNI3, TNNT2, TPM1.

Cancer genes were:  APC, ATM, BAP1, BARD1, BMPR1A, BRCA1, BRCA2, BRIP1, CDH1, CDK4, CDKN2A (p14ARF), CDKN2A (p16INK4a), CHEK2, EPCAM, GREM1, MITF, MLH1, MSH2, MSH6, MUTYH, NBN, PALB2, PMS2, POLD1, POLE, PTEN, RAD51C, RAD51D, SMAD4, STK11, TP53

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Aside.  While my Color cardio panel was negative, I do have strong maternal/paternal loading for common hypertension of aging, both parents having had poorly controlled hypertension and dying of cardiovascular causes (father 60, mother 80). 

Accordingly, from my early 50s to late 50s my blood pressure switched from around 90/60 to around 150/100, and it seemed completely unrelated to sodium.  A daily generic tablet keeps my BP around 115 instead of 150, so I'm lucky.  I confirm BP control periodically with a Qardio bluetooth arm monitor linked to my iPhone.   But none of this issue is flagged by the Color cardio panel, which looks for rare things like potassium channel mutations.

At the podcast Tech Tonics, Harvard professor Sek Kathiresan recently discussed polygenic modeling of cardiac risk (here).  I might have that; but my hypertension-of-aging isn't something picked up by single disease genes like SCN5A.

Very Brief Blog: Gottlieb TweetWatch: Tweetorial on IVD, Happy-Tweets with CMS

In the past week, Washington news on IVD/LDT policy has included:

• December 6, Policy outlook/overview by Gottleib and Shuren at FDA, preceding new legislative draft. Here.
• December 10, Hill releases new 200 page model for FDA legislation.  Here.
• I've heard that Hill is taking comments til early February.

Perhaps lost in the whirlwind events - today, December 12 Gottleib announced biosimilar policy for insulin - does this guy ever sleep? - were some equally interesting but less high profile Gottleib tweets.  

First, he issued an extended TWEETORIAL on FDA and diagnostic tests, and the differences between IVD/LDT.   See PDF in cloud here.

Second, he traded happy back-patting tweets back and forth with Seema Verma of CMS:

Third, and this went viral, he conveyed a Dr Seuss style poem after CDC warned about hazards of unbaked cookie dough (making CDC the Debbie Downer of the federal twitter landscape):

Very Brief Blog: SUPPORT Act is Federal Legislation Affecting Lab Sales Practices to All Payers

In October 2018, Congress passed the SUPPORT Act, an omnibus opioid abuse legislative package.  An "11th hour" addition, Section 8122, could affect lab practices to all payers, not just Medicare and Medicaid.   Practices include compensation for blood draws, on-site phlebotomists, sales force compensation, etc.

• Legislation here (Section 8122).
• Covered in Dark Report, December 3, 2018 (subscription)
• Open-access discussion at Epstein Becker Green, here.
• Open-access discussion at Mintz law firm, here.
• Memo on the ACLA website from Alston & Bird, November 26, 2018, here.
• Letter from ACLA to HHS re: anti-kickback improvements; letter mentions Section 8122.  Here.
• Washington Post here.  

At a glance, to me, I would have thought the law applied to relationships between opioid treatment centers and tox labs serving opioid treatment centers.  But it applies to opioid treatment centers OR labs, regardless of whom the lab is dealing with.

(According to Dark Report, p. 9, this is scope is "open to debate" in view of the legislative history and intent, or, "applies to all laboratories and to all services.")   Everyone agrees it's a criminal provision.

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The law develops out of an earlier bill, HR6878, Eliminating Kickbacks in Recovery Act, EKRA, but the SUPPORT Section 8122 is not exactly the same.

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Pop Quiz.

What is LEIE?  The HHS OIG list of excluded individuals and entities.  When was it last updated?  Today!     How many entities are on it?  70,847.  How many are entities (clinics, pharmacies, DME suppliers)? 3087.  How many are people?  67,760.  How many are labs?  45.  How many are hospice owners/employees?  35.  Related to infusion centers?  40.  Government employees related to the Health Resources Services Administration (HRSA/HHS)?  3.  Government employee of Substance Abuse and Mental Health Administration?  1.

By the way, if you want someone's name, address, and birthday, without breaking into Target's computers, they're here.  Youngest birthday seems to be April 29, 1990 (28).  There appear to be a couple dozen earlier than 1910, predominantly classed general practitioners. 

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December 10, 2018: Legislators Release New 200-page Draft Diagnostics Legislation

Last Thursday, December 6, FDA released a rather quirky statement on its intention to encourage innovative diagnostics while regulating LDTs.  LDTs would be regulated by new methods, risk-based, and including "pre-certification" aka self-certification.   The statement, released in a series called "FDA Voices," opened with a statement by Commissioner Scott Gottlieb, then a statement by CDRH leader Jeff Shuren, then a statement from the legal team, Lauren Silvis, focusing on hazards and risks of unregulated LDTs (bad cop?).

December 7, as publicized by Genomeweb here, the Hill has released a new 200-page version of legislation that would greatly reform the FDA's approach to clinical diagnostic tests.

• See the 200 page legislative online here.
• It's now called VALID - "Verifying Accurate Leading-Edge IVCT Development Act of 2018."
• This legislative version follows a prior draft legislative proposal in May 2017, and a 60-page FDA version of a better idea released in August 2018.
• It includes pre-certification as law, something that FDA has been proposing in speeches and pilot programs.
• Biocentury here, AACC here.  Sen. Hatch here.
• I've heard from DC experts that legislators are welcoming comments until early February, and that the 200 page bill has some holes in it, as it was put together quickly.

Can such an act possibly pass in this section?  You can assume not (a couple legislative days left.)  Sen. Hatch (retiring) regrets he will not be around, in 2019, to see the possible future action on the bill.

Stay tuned for CY2019 and a new Congress.

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Steeply Falling Valuations: HLI, Nanthealth, Vermillion

Wall Street Journal has posted a story that Human Longevity Inc (HLI) is raising funds under the strictures of a "down round," which has lowered the valuation from $1.6B  eighteen months ago, to $310M today (negative 80%).   The round would raise $25M under rules (WSJ uses the word "onerous") that would protect new investors.   WSJ story here.  MedCity here.   (MedCity links to a cloud term sheet which I don't believe WSJ did (here).)

According to the Journal, employee headcount has fallen from 300 to 150, and "its chief executive officer, chief medical officer and chief operating officer all departed in 2017, according to their LinkedIn profiles."   Google suggests that Chief Technology Officer has also been a rapidly passed-along title.

Other Declining Valuations

Other declining valuations include NantHealth, which was valued at $18.54 on 5/28/2016 and 79 cents per share today (4.2%).   

Another example of downward valuation would be Vermillion, which markets ovarian cancer laboratory tests.  VRML started at $310, on 11/1/2000, during the original internet/biotech bubble.  However, after slipping to $30 in the 2002 selloff, it later rose to $123 in September 2003, falling to 30 cents in December 2008, and rising to $32 in February 2010, related to FDA and CMS approvals.   On December 7, 2018, it closed at 52 cents.  Over the past four years, sales in 2014-2017 at Vermillion are about $2-3M per year, GAAP losses around $10-20M per year.  If you roll back to quarterly investor calls around the time of FDA approval (9/2009) and Medicare LCD coverage (3/2010), I believe (from memory) the company's management forecast was for revenue very near term in $millions, then $10s of millions within a few years.

Very Brief Blog: FDA Recognizes ClinGen Database for FDA Genetic Tests

Continuing its effort to smooth new pathways for FDA review of genetic tests of all types, FDA announced it has recognized ClinGen / Expert Curated Human Genetic Data as a database that may be referenced in submissions.

FDA press release (December 4, 2018) here.
For a Twitter message chain, see #fdarecognizesclingen here.

FDA cites its April 2018 guidance on use of databases in genetic test submissions.

Journals and Trade Journals 

Genomeweb covers the December 4 ClinGen story here, and cites back to a recent article in Genomeweb here about a special issue of the journal Human Mutation, here.   Volume 39, Issue 11, November 2018, had a series of open-access articles on ClinGen and Clin Var.

Very Brief Blog: FDA Releases 20-page Device De Novo 510K Proposal

As FDA promised in recent weeks, it has released new policymaking that would update and codify the existing de novo classification process.  De novo requests have risen from 22 in 2012 to 100 in 2017.

• The published copy of the rulemaking is online here.  83 FR 63127-46, 12/7/2018.  
• Comment is open for 90 days (March 7).
• See a detailed pre-release discussion by MedTech Dive here.
• Press at Genomeweb here.  News at RAPS, here.   
• Nice review at Forbes by Yiannis Mouratidis, here.

Rules will be placed at 21 CFR 860.1, and under a new Subpart D to Section 860 when finalized.

In part, FDA states that the new rulemaking will increase the clarity and efficiency of the process, and (my reading) place into formal regulations some rules that may be similar to various prior guidances (some of which which FDA cites).  Regulations also have the force of law, which guidance documents do not have.

The de novo process dates to 1997 and was "streamlined" in 2012 by allowing direct classification of some new devices into the de novo process, no longer requiring a rejected 510(k) application.   My sense is that FDA has proceeded for years by policymaking by "guidance" and "process" and has not kept 510(k) or "de novo" regulations up to date.  (See here; for more background here and here).  Here, FDA dusts off 1998 regulations lost to the sands of time at 21 CFR 860 and updates them to reflect current statute and processes.

See the 17 page October 2017 De Novo guidebook here.

Context

Class II Exempt-from-Review Changes

In other 510(k) news this year, FDA published rules regarding when Class II devices would be exempted from review in June 2018 (final rule 83 FR 25910), here. 

This includes some direct to consumer genetic risk tests used for wellness purposes, for example.   See FDA's regulatory classification for genetic risk tests at 21 CFR 866.5950 (issued November 7, 2017, revised June 5, 2018), here.  FDA received at least one comment that it was making genetic test review too easy.

Last Week's News: Making 510(k) More Rigorous

Today's FDA regulation on 510(k) de novo is separate from a press announcement on November 26 that FDA would seek to toughen up 510(k) predicate usage, here.   Takeaway: To the extent that 510(k) predicate usage is made more rigorous, more tests would be shunted into the 510(k) de novo pathway.   So they are trying to oil the path for de novo before those new devices are shunted into it.

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Forbes author Mouratidis recently reviewed AI in pharma trials, here.