Health Affairs: Twin Articles On Truly Reforming and Rebooting US Coverage & Reimbursement; And A Few Other Updates

Here, I highlight very recent twin blogs in Health Affairs about reimbursement policy reform -- followed by links to a flurry of new articles (and a book) at NYT, WaPo, on perceived excessive health care pricing.

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A few days ago, I had a short blog highlighting a new December 2019 Health Affairs article by Oxford's Kushal Kadakia on reforming CMS reimbursement methods and policies (blog here, article here). 

It turns out that Health Affairs actually published twin articles, both on December 18, on the theme of seriously rebooting and redesigning reimbursement, at CMS and elsewhere in the US health system.

• The first blog, by Kushal Kadakia, takes its launching point from the October 2019 Trump executive order directed mostly at CMS, for example, asking CMS to reform its parallel review process and define "reasonable and necessary."  
• Kadakia blog article here, Trump executive order entry point here.
• Kadakia was part of a 2017 review article by Mark McClellan and others on value based purchasing , spent Summer 2019 at CMS, and is now on a fellowship at Oxford.
• This article basically walks through key points of the E.O. and amplifies it by suggesting ways CMS could actually implement the updates and changes.
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• The second blog is by an all-star cast of Mark McClellan, Morgan Romine, Jeff Allen, Tanisha Carino, and Scott Gottlieb.  
• Blog article here.
• This article highlights the advances in FDA approval processes and resources initiated in 2017 by 21st Century Cures Act, and then states that no similar deep-dive reboot has occurred at CMS (or the rest of the US reimbursement.)  They find flaws in all the major components - coverage, coding, payment, clarity.
• See also a December 2019 request for information from the Hill, asking healthcare stakeholders how US reimbursement might be improved.  Here.  Many of the questions in the RFI focused on reimbursed and would use the input  to design a new  Cures 2.0 bill for 2020.
• Can CMS Fast-Follow FDA's Lead on Communications?  I'd add communications as a fundamental problem.  See a December 2019 article by Peter Pitts about FDA's attempts to improve its two-way communications with industry here.   That could also be a model for adaptation with payers.   
• See the website on the FDA's all-day November 7 meeting between FDA and stakeholders about how FDA could improve its communications: here.  Webpage includes video and 20 PDF presentations.  
• I've put all the agenda, presentations, and unofficial transcript in one 10mb cloud zip file here.
• Why not:  CMS could have similar full day town hall some day about how it could improve processes for NCDs and LCDs.
• In the same vein, FDA published a very good new draft guidance in December on what it considers good trial design for evidence evaluation; entry point here.

Pricing Always In The News

There's almost always something monthly, if not weekly, news about US pricing.   The New York Times' Margot Singer-Katz had a long lead article on perceived excesses of US pricing on December 27, 2019 - here.   

Although not brand new, the Washington Post online was highlighting, as part of 2019's year-in-review, an August 2019 article by Eli Saslow about long lines of poor citizens shuffling into courtrooms being sued by their local hospitals, for example, after two-hour $8000 emergency room stopovers.  Here.  (In fairness to the rural hospitals, Saslow notes many are teetering on the edge of bankruptcy themselves, just like their patients.)   NPR and others reported how a woman saw her doctor for a head cold and ended up with $20,000 of marked-up out of network shotgun testing virology bills (here) - many of which her insurer paid.

And there's usually something new every week or two regarding surprise billing legislation on the Hill; see a flurry of letters form House Energy & Commerce to the major national insurers released on December 18, here. 

Meanwhile, 360Dx  had a (subscription) article by Adam Bonislawski, discussing surprise billing laws at the state level and impacts on labs, here.  Citing in part Erin Duffy's work on health pricing policy at USC.

 Health Prices: The Late Uwe Reinhardt's Last Book

Since I first heard of his work doing a healthcare MBA in 2000, I've tracked Princeton health economist Uwe Reinhardt, whom I  heard speak once at a conference.   He died unexpectedly of sepsis at age 80 in November 2019.   

He was based known for the argument that US healthcare doesn't so much use any more resources than other countries, but simply has higher pricing (2003 here, and 2019 update here.)

Second to that, we also have much higher administrative costs (see NYT December 31 on docs and nurses buried in paperwork, or actually e-work).

In brief, this past week I learned that Reinhardt left a completed book on US health policy and economics, which appeared in May 2019.  Here ("Priced Out;" hardcover, ebook, or audiobook).  Reviews here, here.  Videocast of a 90 minute panel discussion hosted by KFF, here.  Let me also note, the book brings together many good graphs in one place.

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Update 2/11/2020

This article notes that the October Trump Executive Order requested modernizations at CMS, and the twin articles in Health Affairs elaborated on that Executive Order.

The Trump budget plan summary for FY2021, released in early February 2020, also contained similar quotations about CMS coverage policy (essentially echoing Trump's own October 2020 executive order):

https://www.hhs.gov/sites/default/files/fy-2021-budget-in-brief.pdf. 

Improve Clarity and Transparency
of the Medicare Coverage Process
Many stakeholders find the process and standards for the Medicare coverage determination process lack clarity. This proposal requires CMS to issue additional guidance around the Medicare coverage process, including sub-regulatory guidance on the evidence standards that CMS utilizes in assessing coverage and the process to appeal coverage determinations, in an effort to improve clarity around Medicare coverage. [Budget Neutral]



Strengthen the Parallel Review Process 
to Streamline Medicare Coverage
The Parallel Review program is a collaborative effort between the Food and Drug Administration (FDA) and CMS that reduces the time between FDA approval of a device and Medicare coverage of that item. This proposal strengthens the existing parallel review process to improve device manufacturer participation and increase transparency. [Budget Neutral]

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Thanks to a former CMS senior official for pointing out that these Trump 2021 paragraphs are pretty similar to Obama 2012 paragraphs in a document called bioeconomy blueprint:

https://obamawhitehouse.archives.gov/sites/default/files/microsites/ostp/national_bioeconomy_blueprint_april_2012.pdf

Expanding the Coverage with Evidence Development Program to Drive Innovation: Reimbursement for medical treatments is a powerful driver of industry investment. Under the Coverage with Evidence Development (CED) program, Medicare reimburses for promising new technologies that do not currently meet the standard for full coverage. The CED program requires more evidence to be collected to determine full potential benefit of new technologies. The CED authority has existed for more than a decade but has been applied sparingly. The Centers for Medicare & Medicaid Services (CMS) is poised to implement the next phase of CED by better defining the parameters and guidance for CED so it can be used more widely and effectively as a driver of innovation. CMS believes that the lessons learned during the initial implementation of CED can inform its more frequent use and create predictable incentives for innovation while providing greater assurance that new technologies in fact fulfill their initial claims of benefit.



Reducing the Time to Market by Implementing Parallel Regulatory Reviews for Medical Products: FDA approval and CMS coverage significantly influence the development and commercial success of new medical products. The time required for FDA and CMS to sequentially review new medical products—often multiple years—is frequently cited as a disincentive for innovators and investors in the medical technology industry. A significant portion of this delay is due to the fact that most sponsors of new products approach each reviewing agency separately, first working to meet the evidentiary requirements of the FDA and only later focusing on the requirements of CMS. To address this problem, the FDA and CMS initiated a pilot program for the parallel review of medical devices, creating a pathway for new medical products to be simultaneously reviewed by both agencies. By engaging CMS earlier in the process, the parallel review program is expected to limit the duplication of effort on the part of product sponsors and agency reviewers and reduce the time it takes new products to enter the market and receive payments from Medicare and other providers.

Very Brief Blog: Health Affairs Reviews, Highlights Trump Executive Order on CMS Innovation and Coverage

Update: I missed it up front, but also on December 18, 2019, McClellan, Romine, Allen, Carino, and Gottlieb also had a separate article in Health Affairs focusing on updating CMS coverage and payment.  Here.

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Recall that on October 3, 2019, President Trump signed an executive order focused on healthcare technology innovation and improvement the coverage process at CMS - entry point here.

On December 18, 2019, Kushal Kadakia, an Oxford Rhodes Scholar who spent the past summer at CMS, writes a Health Affairs blog focused on the potential value and impact of the Executive Order, and how it could be implemented.

• Blog here - worth reading.

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The Executive Order "Improving Medicare" from last October opens with a statement that Medicare for All would destroy the US healthcare system, but goes on to have a series of bullet point ideas for improving CMS coverage and CMS-FDA coordination.  The E.O. goes on with passages like these:

Within 1 year of the date of this order, the Secretary shall propose regulatory and sub-regulatory changes to the Medicare program to encourage innovation for patients by (a) streamlining the approval, coverage, and coding process so that innovative products are brought to market faster, and so that such products, including breakthrough medical devices and advances in telehealth services and similar technologies, are appropriately reimbursed and widely available, consistent with the principles of patient safety, market-based policies, and value for patients.... (etc)

There are 12 total suggestions.

We hear a lot about the convergence of surprise billing momentum from the public press to the White House to the House to the Senate. 

As reflected in Kadakia's blog, Medicare innovation shares momentum at both the White House and on the Hill.   Legislators recently requested information from the public on how to improve biomedical innovation (aka 21st Century Cures 2.0) with equal focus on CMS as on FDA.  (My Cures 2.0 comment here).

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Kadakia was coauthor in 2017 on an article with Mark McClellan, "Improving Care And Lowering Costs: Evidence And Lessons From A Global Analysis Of Accountable Care Reforms,"  here.

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On Twitter, Scott Gottlieb highlighted the December 2019 annual report of the FDA director at CBER, Peter Marks MD PhD; here.

Very Brief Bog: FDA New Guidance on Clinical Trial Quality and Weight of Evidence

On December 19, 2019, the FDA issued a new 21-page draft guidance document on what constitutes "substantial evidence" of clinical effectiveness, for the purpose of drug and biological trials.   The historical high benchmark has been two "adequate, well-controlld" randomized controlled trials.  However, as long ago as 1998 guidance (here) FDA considered the circumstances of particular drugs and diseases. 

See:

• RAPS trade journal article here.
• FDA press release here.
• Extensive quotes from Deputy Director Amy Abernethy.
• FDA web page for the new draft guidance here.
• Actual PDF here.
• Federal Register announcement; submit comments til February 18, 2020; here.
• For a negative viewpoint, that the guidance and other FDA actions makes FDA too loose and liberal, see Endpoints, here.

To my eye, there are other FDA guidances say very little that's new (e.g. you get the "I could have written this" feeling.)   This one is quite interesting.  While there are many books and articles on designing sound clinical trials, this is a pretty good 21-page birds-eye summary of some of the most important in's and out's in trial design and trial interpretation.   

While the context is guidance for drugs and biologicals, many of the considerations are similar for diagnostics and devices.

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Contemporary with this guidance, see a December 23 WSJ article on data-mining for real world evidence to support drug trials; here.  

Not directly related, but also this month, flurry of news articles on "hidden medical device failure reports" in the MAUDE device database - e.g.  Kaiser Health News here.  See the FDA"s home page on its SENTINEL initiative here.  For recent publication by FDA's head of devices, Jeff Shuren, here.

See a Health Affairs blog on FDA communications with drug developers here, and a Health Affairs blog on coordinating FDA and CMS decisions to encourage innovation here.

FDA held a November 7 all-day workshop on clinical trial design (separate from but related to this draft guidance document on clinical trial design appearing in December).

• See the website on the FDA's all-day November 7 meeting between FDA and stakeholders about how FDA could improve its communications: here.  
• Webpage includes archived streaming video of the workshop and and 20 PDF presentations.  
• I've put all the agenda, presentations, and unofficial transcript from November 7 in one 10mb cloud zip file here.

Very Brief Blog: Guardant Announces Expanded Coverage of G360 LBx Test from MolDx

CMS generally releases new proposed and new final LCDs on Thursdays.

According to a press release from Guardant on 12/19/2019, MolDx has finalized a proposed LCD, from earlier in the year, giving expanded coverage across cancer types for its Guardant360 assay.

See the press release here.

See a link to the LCD at CMS here.  I've put a cloud PDF copy here.

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Last March, the LCD was released as DL38043 (Palmetto MAC).  At least for Jurisdiction J, the comment period closed June 20, giving exactly 6 months from the comments-close to the appearance of the final LCD (which is effective in +45 days from now).   It may be a lesser net time lag if some MolDx MACs ran a later comment cycle that Jurisdiction J.   MolDx may have been waiting for the release of a draft revised NCD for the national CMS NGS NCD, which appeared about October 28.

The "response to comments" document is online here (A57866).

PAMA Delay, Promoted by ACLA, SIGNED BY PRESIDENT

Update:  The budget act, including the PAMA delay, was signed by President Trump.

Any PAMA price cuts for CY2020 will continue.

CY2021 will have 15% price cuts for the minority of codes whose 2017 survey prices are still, in CY2020, more than 15% above the 2017 survey.  Here.

The next PAMA data collection is delayed from 1Q2020 to 1W2021, but the data source dates will remain 1H2019.

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The LAB act was formally introduced into Congress earlier in 2019, but many bills are introduced that die before entering actual legislation (the tadpoles to frogs metaphor). See June 2019 trade press here.

As 360DX reports today (December 18), the LAB act and its one-year delay of PAMA has been introduced into 1600-page omnibus financing bills that are now circulating on the hill.   360DX here.

Currently, CMS would run a data collection cycle in 1Q2020, to set three-year prices beginning January 2021.   The data collection would be based on lab claims paid in 1H2019.

LAB Act would stop the clock for a year, while also looking at flaws in the PAMA design process via a required investigation by the MEDPAC - the Medicare Payment Advisory Committee.

A December 1 article at AACC covers the same topic and notes there is still a federal lawsuit pending against CMS's regulatory interpretation of PAMA statute - here.   The court case lost at the first federal level, but on appeal, it had a win which sent it back for re-review at the first federal level again on different grounds.

At least one version of the Hill language is here, see page 1428 (Section N, HHS, Subtitle A Medicare, Medicare section 105 (of 8 sections).)  This is a typical legislative pathway; lots of 4-page little bills introduced by themselves during the year get rolled up as "page 1,428-31" of an omnibus bill at the end of the year.

I've put a cloud version of one version of the spending bill here.

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Legal eagles will note that some aspects of the bill shift around, such as whether the PAMA report would be conducted by the National Academies of Science on the one hand or MEDPAC on the other. 

Very Brief Blog: Catching Up with 21st Century Cures Act 2.0; Comments Due December 16

In late 2016, Congress passed the 21st Century Cures Act, a series of actions aimed to improve the efficiency and effectiveness of the FDA and promote other improvements to biomedical research.  See Wikipedia here, FDA here. 

In November 2019, Congr. Degette and Upton opened a request for comments on topics that could be included in a new 21st Century Cures "2.0" bill in CY2020.

See press release here, see 2-page PDF request for comments here.

See trade press here, here, here.

Per the request for comments, Cures 2.0 would want to "modernize coverage and access to life-saving cures" and modernize the health delivery system.  One significant focus is digital health.  Another focus is improvements at both FDA and CMS.  For example, the request states, "As a key goal is to support access to life-savings cures, we would like to explore how reform of Medicare coding, coverage, and payment could better support patients’ access to innovative therapies."  Yup, that would be good.

Comments can be submitted to cures2@house.mail.gov per the request for information and the deadline is listed as December 16, 2019.

The areas of interest called out in the request for comments are:

1. Modernize coverage and access.
2. Digital health and digital platforms including coverage and reimbursement.
3. Reduce the delay from FDA to coverage (CMS), including coding and logistics.
4. Real world data.
5. Help families and caregivers support their loved ones with illness.

Very Brief Blog: Myriad Gets ADLT Approval for MYCHOICE / $4040 Price

CMS updated its ADLT list on December 11, adding the Myriad MYCHOICE test.   Code and descriptor are pending, but the initial PAMA price (which is the initial list price) will be $4040.

See the updated CMS ADLT info PDF here.   For more on where to find this stuff at CMS, here.

click to enlarge

The chart shows that 2 of 7 ADLT tests belong to Myriad.  Its melanoma test is an ADLT because it's a sole source LDT that is a MAAA that is covered by CMS.  The MYCHOICE test is an FDA-approved sole source test, the other class of test that qualifies for MAAA coverage. 

Myriad MYCHOICE is on the January/February AMA CPT PLA code agenda (here).
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FDA.  The FDA home page for MYCHOICE (PMA P190014) is here.  The 45-page PLA review by FDA is here. 

Trade Press.  Genomeweb covered the FDA approval back in October, here.   Some open-access press on MYCHOICE from October is here:  

     According to Myriad, myChoice CDx is the first and only tumor test designed to determine homologous recombination deficiency status by detecting BRCA1 and BRCA2 (sequencing and large rearrangement) variants with comprehensive assessment of genomic instability using three biomarkers: loss of heterozygosity, telomeric allelic imbalance and large-scale state transitions.
     “Today’s approval marks a historic milestone for the myChoice CDx test after more than 10 years of development and demonstrates Myriad’s commitment to pioneering science and collaboration with pharmaceutical partners in order to accelerate precision therapies for people with cancer,” Myriad CSO Jerry Lanchbury, Ph.D., said in a statement.

Enhanced Pricing.  The regular off-the-rack price for BRCA 1,2 sequencing and Dup Del analysis at CMS is around $1700 for CY2020 (AMA CPT code 81162).   ADLT law provides list pricing (following by annual mark-to-market repricing) for FDA cleared or approved sole-source lab tests, so MYCHOICE as an ADLT is priced independently of legacy pricing for BRCA CPT codes.

An article by NEJM editor Longo discusses genomics and ovarian cancer discusses MYCHOICE, December 2019, here.
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Coding.  ADLT codes require a product-specific code, typically either an AMA PLA code (which end in U) or a special CMS HCPCS code (which will begin with U).   With an October 23 approval, Myriad likely would have missed the October 10 PLA deadline earlier this fall.  (We know from the October/November AMA public PLA agendas that MYCHOICE wasn't in the cycle).   We don't know if they are applying for a January cycle PLA code from AMA or a CMS U-Code for 1Q2020.

Very Brief Blog: Silicon Valley Bank Issues 2019 Report on Digital Health Industry

This week, I had the chance to attend the third annual SoCalBio Digital Health conference in Santa Monica (here).

The meeting opened with an excellent presentation by Milo Bissin of Silicon Valley Bank.   The 37-page slide deck is online - here.   

Related, see a deep dive article by Dave Muoio at MobiHealthNews on "recent breakups" between the biopharma and Dhealth industries - here.

Brief Blog: Consensus Paper on How to Define Clinical Utility in Microbiology Diagnostics

In any part of the diagnostics community - from PET scans to exomes - you can't swing a cat without someone saying that payor standards for clinical utility are too high and too vague.  This blog guides the reader to a new paper on molecular microbiology and clinical utility, Miller et al., 2019.

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Frustration between the diagnostics industries and payors becomes productive when it leads stakeholders in diagnostics to come together for consensus papers.  For example, in 2012/2013, CMS was deciding whether it would cover newly-FDA-approved amyloid PET scans for Alzheimer's disease.  Rapidly, the Society for Nuclear Imaging and the Alzheimer Association convened stakeholders to produce a best practices guidance for this new technology (here; Johnson et al., here). 

When FDA issued warning letters about historically valid LDT tests for pharmacogenetics in early 2019, the Association for Molecular Pathology rapidly produced a best-practices statement (here).

Here's a new example.

Hospitals and microbiologist have complained about inadequate coverage and payments for molecular microbiology despite the booming capabilities of this field (see an insightful October article in 360Dx, Ketchum, here).   Stakeholders are now putting pen to paper to write about what standards are appropriate for evidence before payment and adoption for these new categories of tests.

 See the excellent multi-stakeholder review of clinical utility for advanced microbiology testing, Miller et al., published recently in the Journal of Clinical Microbiology - here.   The authors represent  the American Society of Microbiology (ASM) Clinical and Public Health Microbiology Committee and the ASM Corporate Council.  (There's a subscription trade journal article about the Miller publication - see Johnson, at 360Dx, here.)

Miller et al. is a 13-page page publication with 61 up-to-date citations, and it forms a good review of clinical utility (CU) for diagnostics, with a focus on microbiology.   The authors note four different approach to CU in molecular microbiology:  (1) clinical decision making, like revised Rx; (2) improved patient clinical outcomes; (3) improved workflow in the lab (including turnaround time), and (4) reduced costs.  Well worth reading for a great application of general principles poured into a specific topic area.

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For a 2016 paper on clinical utility of molecular pathology sponsored by AMP, see Joseph et al. here.  (See also my article, "A quartet of papers on molecular reimbursement," 2018, here.)

For some court cases that grew out of the CMS noncoverage of Amyloid PET scans in Alzheimer's, here.

Very Brief Blog: Legislation Improved, Re-Introduced, Supports Breakthrough Devices at Medicare

In August 2019, I reviewed the complex several year history of improvements on breakthrough device coverage at CMS - here.

One item I discussed was Breakthrough Bill coverage legislation - from the prior Congress.   Similar legislation has now been updated and improved and introduced in the House.  It's introduced by Congr. DelBene of Washington, with 5 cosponsors.

• See AdvaMed press release here.
• See MDDI here.
• See MedTechDive here.
• See text of HR 5333 here.
• Expect title as, "The Ensuring Patient Access to Critical Breakthrough Products Act of 2019."

Every year there are always a lot more bills numbered and introduced, than passed, but it's great to see this legislation moving forward on its pathway.

Going back to my August 2019 blog, I mentioned that CMS had been working on rulemaking related to breakthrough devices.  No news on that front.

AdvaMed writes:

The Advanced Medical Technology Association (AdvaMed) issued the following statement from President and CEO Scott Whitaker on the introduction of legislation in the U.S. House by Reps. Suzan DelBene (D-Wash.), Jackie Walorski (R-Ind.), Tony Cardenas (D-Calif.), Gus Bilirakis (R-Fla.), Roger Marshall (R-Kan.), and Terri Sewell (D-Ala.) to streamline Medicare coverage and reimbursement processes for innovative medical technologies:  

“CMS has made great strides in recent months to ensure Medicare beneficiaries have access to the most innovative medical care, and this important legislation would build on these critical reforms,” said AdvaMed president and CEO Scott Whitaker. “We thank Reps. DelBene, Walorski, Cardenas, Bilirakis, Marshall, and Sewell for their leadership and their commitment to ensuring patients and physicians benefit from breakthrough medical technologies in a timely manner. We look forward to working with Congress, CMS, and other key stakeholders to move the bill forward.” 

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Note, as of 12/10, the bill is numbered and a website created but the text of HR 5333 was not entered online yet.

Very Brief Blog: AMA CPT Posts Agenda for February Meeting in SF (Feb 6-8)

The next AMA CPT editorial panel meeting will be February 6-8, 2020, in San Francisco.

• The AMA home page for all the 2020 meetings is here (see table of dates at table-symbol).
• The "Meeting Overview" page is updated on a rolling basis for the next meeting; find it here for the SF meeting.
• The actual PDF agenda for the February 2020 meeting is here, with a short description of each code proposal.
• One month after each meeting, a "Summary of Panel Actions" is posted, here.

Pathology codes run on an early public comment cycle, which ran Nov 20-Dec 4 this year.  All other codes up for the February CPT meeting have a comment cycle extending to mid-January.   See the PDF agenda for details.

Lab code proposals include 4 drug assays, a MAAA code for bacterial vaginosis, one single-gene code for BCAT1 IKZF1, four or five additional MAAA codes including for pulmonary and liver fibrosis.  There are two GSP codes (NGS services), one for epilepsy panel and one for copy number analysis.  PLA codes for the January cycle will be voted on for finalization briefly during this CPT meeting.

In other service areas, over a dozen codes for non face to face telehealth services are proposed, and about 36 codes are scheduled for possible deletion due to very low utilization.

Partial view of Feb 2020 Lab CPT Proposals - full PDF here.

Future CPT code cycles in 2020 include February 12 applications for the May 14-16 Chicago meeting, and June 30 applications for the October 1-3 New Orleans meeting.

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PLA (Proprietary Lab Analysis) codes have a different calendar; the next deadlines are January 8 and April 1, here.  AMA processes and finalizes PLA codes on a quarterly basis in six weeks or less.  Fourth-quarter 2019 PLA Codes (aka November 2019 PLA Agenda) online here.  There were 13 PLA codes on the November agenda.

News Item: Company Touts $599 Whole Genome, Suspends Operations, Needing Cash

The highest-rated article today on Genomeweb is an open-access article about Veritas Genetics suspending operations.  See the article here.

• Veritas, a Harvard Med School spinout, raised $30M in 2016, and a total of $42M.
• Per Genomeweb, it offered whole genome for $999, BRCA for $199, 26-gene panel for $299.
• Recently offered whole genome for $599.
• Suspended operations "due to adverse financing" when "planned financing fell through."

CMS Posts Final New Lab Test Prices for CY2020

On December 4, 2020, CMS released pricing for some 90 new CPT codes for CY2020, as well as final decisions on several codes being reconsidered during CY2019 due to the appeals process on prices set for CY2019.

The CMS home page for Clin Lab Fee Schedule (CLFS) files is here.

The ZIP file for the new prices is here.

My copy of the summary file is in the cloud directly, here.

CMS released the files in several ways.  Two files are comma-delineated files, one summary and one complete.   CMS also released a two-worksheet Excel file with all the data in two tabs.

Closing Out the Results of Gapfill CY2019

CMS also released final MAC prices for codes under the gapfill process during 2019.  See earlier blog on these codes here.   Generally, there were no changes between proposed and final MAC gapfill prices.  See final CMS file for 17 codes in cloud here.

Update January 2020:
I got a FOIA 57 pp PDF of public comments on the GAPFILL prices.  I put it in the cloud here; four companies made comments.

New Codes for 2020: Highest Gapfill Cohort Ever*

About 37 of the 87 codes (the 87 excludes codes removed from the process) enter the gapfill process for CY2020.  This is more than double the codes gapfilled currently in CY2019.

In the gapfill process, the multiple MACs set proposed prices in the spring, there is a public comment process in the summer, and CMS sets final prices in the fall (in this case, December 4).

Changes from Proposed to Final

12 codes were converted from crosswalk to gapfill during the fall public comment process.
1 code was changed from gapfill to a crosswalk.
3 codes were crosswalked again, but to a different crosswalk.
2 codes were removed from pricing because they are now ADLT codes.
1 code was deleted.

CMS Prefers Single Simple Crosswalks

Of the approximately 50 codes crosswalked, the vast majority had a single simple crosswalk.  6 codes were crosswalked to the sum of 2 codes, and 1 was crosswalked to the sum of 3 codes.   2 codes received  fractional crosswalks (one x 0.5, one x 1.5).   PLA codes were used as the crosswalk target 7 times.

PLA Codes

Since the majority of codes are PLA codes (72 PLA codes in the final pricelist), they are worth assessing separately.  Of 72 PLA codes, 36 or 50% were gapfilled.

Of crosswalked PLA codes, 22 were crosswalked to only one regular CPT code. 7 were crosswalked to another PLA code.  7 were crossed to a multiple or stack of regular CPT codes.


Appeal Codes: BRCA Unchanged

Most of the appeal codes, including BRCA price appeals, were not successful and CMS will retain CY2019 pricing in CY2020.

Reconsiderations for 2020

Parties dissatisfied with the pricing results just released by CMS may submit reconsideration requests for 60 days (30 days for gapfilled codes; see CMS webpage at link above.) 

Regular reconsideration requests will cause the pricing for that code to be taken up de novo next summer.  CMS usually receives several such appeals each year.   It has no short term effect on pricing. 

Far less common, reconsideration of a code just gapfilled by MACs to a final price for January 2020 is different,  When this occurs, it is a reconsideration by CMS staff who assess whether the MAC gapfill price was irrational, and should be adjusted.  This process is handled internally and rapidly by CMS staff.

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CMS issued special additional comments wherever it disagreed with both the advisory panel and public comment.   In general, CMS explanations of rationales for price selections are better this year than in past years.

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*
An early version of this blog undercounted the gapfills for 2020 as 20, not 37.

Very Brief Blog: Some Cancers May Be Driven by Extrachromasomal DNA; Potential Drug Target

Over the past year or two, there's been a boom of interest in non-chromosomal oncogenes and the role they may play in some tumors.  For a number of years, we've known that tumors can be a rapidly evolution genetic mess, with missing chromosomes, extra copy numbers of oncogenes, fusions, and other alterations.

UCSD medical scientist Paul Mischel and team made a splash with a November 20 publication in Nature, documenting more about these tiny circular extrachromosomal elements (ecDNA), as well as showing they can over-express the oncogenes of interest, just like a fusion-driven oncogene that is "always on." 

Because normal tissues aren't driven by ecDNA, future drugs that eliminate ecDNA might be a magic bullet against some of the cancers, or at least, powerful assets in multi-drug regimens.

Some entry points:

• UCSD's Paul Mischel MD at Wikipedia here.
• Mischel lab at UCSD's Ludwig Cancer Center here.
• Mischel lab website here.
• Nature new paper here:   Wu et al. (2019) Circular ecDNA promotes accessible chromatin and high oncogene expression.  Nature (epub 20 November).
• Nature Reviews Cancer paper here:  Verhaak, Bafna, Mischel (2019)  Extrachrosomal oncogene amplification in tumour pathogenesis and evolution.  Nat Rev Cancer 19:283-8.
• Trade Press:
• Live Science here.
• Fierce Biotech here.
• New York Times - November 20 - here.
• Website for start-up biotech company, Boundless Bio, here.
• Raises $46M, September 2019, here.
• Mischel listed as founder; Zachary Hornby as CEO (Linked In here).

Verhaak, Nat Rev Cancer, Fig 01.  Bottom, EM of microcircular ecDNA.

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Mischel and I were just a couple years apart in the pathology residence and neuropathology fellowship at UCLA (circa 1994). MIschel's background includes college at Penn, med school at Cornell, residency at UCLA, molecular biology fellowship at UCSF, and faculty positions at UCLA and currently UCSD.

Very Very Brief Blog: FDA Posts Decision Summary for Nanthealth Tumor Exome (182pp)

On November 12, 2019, FDA approved use of the NantHealth tumor somatic, germline, and exome test.   See entry point here with additional background and links.

FDA has now released the 182-page review document - K190661 - here.   See also a deep dive article at Genomeweb here.   The FDA home page for the device is here.

I haven't read the whole FDA review, but it shows the commitment of the FDA to finding creative ways to approve very advanced NGS diagnostics with huge amounts of sequencing data.

Very Brief Blog: Seema Verma's September Blog on Program Integrity; RFI Due Nov. 20

CMS and HHS got a lot of press for wide-ranging new proposed rules regarding anti-kickback-statute and Stark laws, released for public comment October 9 (entry point here).  Generally, these aim to make value-based-contracting easier, but specifically, they usually leave out the lab industry (as if no good value-based healthcare contracts could involve the lab industry).

Here's another CMS program integrity workstream:

I had missed a lengthy Seema Verma blog on October 21 in which she discussed wide-ranging CMS efforts on the program integrity front.  Worth reading; here.  (Hint: She specifically calls out scandals in the two areas which are orthotic braces, and lab genetic testing.)

See a trade press article about Verma's blog here.

At the same time, CMS Program Integrity released a 12-page view of how they frame their changing mission, including a Request for Information (e.g. a request for public comment).  The RFI comments are due November 20, but even if you miss that deadline, the RFI may still be worth a look.

And finally, CMS Program Integrity also released a 14 page view of how they want to leverage advanced technologies, including AI or Machine Learning for medical review. 

Very Brief Blog: CMS Follows Administration Goals, Releases Price Transparency Rules

A major theme of the Trump Administration this year has been healthcare pricing, including surprise billing (here) and price transparency (for June 2019 executive order, here.) In late September, a number of stakeholder groups urged the Hill to move forward with surprise billing legislative, which had lost momentum.

For price transparency, the eagle has landed; on Friday, November 15, the Trump administration releases final and major price transparency regulations.  HHS views price transparency as a matter it can address through de novo regulation, whereas most surprise billing issue fall outside of Medicare or Medicaid and would require legislation.

Somewhat confusingly, today's release has two different components, and one part is a second and "final" part to the annual OPPS final rule, most of which was released November 1 (here).  In that rule, CMS merely stated concisely that "We intend to [issue] a forthcoming final rule."  Here it is.

Then, there is also a separate PROPOSED rule, which has its own website and its own fact sheet.

Headline:  The OPPS Final Rule "F2" governs hospital requirements for publishing price transparency.  While I believe past state legislation has defined this as chargemasters, CMS defines this as per payor negotiated rates.   All rates need to be available to a patient, but 300 key rates need to the public.  Meanwhile, the PROPOSED rule is about insurers posting negotiated rates.

• For CMS/HHS press release, here.
•    For CMS fact sheet on the rule (CMS-1717-F2), here.
•      Those who want to read the 1717-F2 rule (in typescript form, 331pp), here.
•         CMS webinar on the final rule here (Dec. 3).
• Now, there is also separate from that, a PROPOSED rule.
•    For fact sheet on PROPOSED rule, (CMS-9915-P) here.
•      Those who want to read the 9915-P rule (in typescript form, 219pp), here.
•    Since 9915-P is a PROPOSED rule, it has a 60 day comment period (to mid January).
• For WSJ article, here.
• For a September background WSJ article, here.  ("Push Sparks Furor")
• For a November 20 update, WSJ, hospitals vow to sue CMS, here.
• The Economist, Nov. 23 issue, Op Ed here.  Deep dive article, same issue, here.
• Healthcare Dive here.  Medcity News here.  Pro's and Con's article at Vox, here.
• Health Affairs here.
• AHA and other hospital groups issued a joint statement that they disliked the rules here.
• Opponents gear up for the courtrom, here.

Puzzler:

I haven't read these line by line.  But for hospitals, CMS clearly asks them to post negotiated rates per payor, and CMS then asks them to post lowest and highest negotiated rate "anonymously."  If I've listed ten payer rates by name from 1 to 10 for cost, then posting the lowest & highest rates anonymously seems impossible.

Footnotes:

With all the fuss about transparency, all CMS prices have been posted online for a decade or two, physician offices, imaging, lab tests, hospital based surgery, inpatient, outpatient, drug prices, and so on.   Nothing secret about all of that.

And with commercial insurers, while there has never been mandatory posting of contracted rates, either from the hospital side nor from the payer side, there's one thing hiding in plain site.  These rates are sent out by the millions, tens of millions, hundreds of millions, into the public space via Explanations of Benefits.   I know if my imaging center charged BCBS $1200, got paid $319, and my copay was $35.   I know if my doctor charged BCBS $225 for an office visit, got paid $87, and my copay was $20.   While these circulate by email, by postal mail, such agreements and rates circulate in society in hundreds of millions of documents.  Easy to access?  No.  But different in a fundamental way from a true "secret."

Very Brief Blog: CDC Releases Antibiotic Resistance Report; CMS Tie-Ins

Watching the 6 am cable news in a Boston hotel prior to today's Personalized Medicine Coalition conference held at Harvard Medical School, local news provides a 30 second clip about a new CDC report on antibiotic resistance in the US.

Some sources for New CDC Report:

• STAT summary of new CDC report on antibiotic resistance, here.
• CDC homepage for the new 2019 report, here.
• Download the actual 148-page report from CDC, here.
• The new report updates the prior 2013 report.
• Pages 41-47 focus on diagnostics.

Some policy tie-ins at CMS:

• CMS administrator Seema Verma had an Op Ed in Stat last wek on CMS efforts on antibiotic resistance.
• November 6 Op Ed in Stat, here.
• August 2 Op Ed by Verma in Health Affairs, here.

As detailed in her November 6 Op Ed, recent CMS efforts to encourage antibiotic best practices and drug development include (1) raising the New Technology Add-on Payment for inpatient costly drugs (albeit only for 2-3 years per new drug), (2) upgrading the DRG payment for some DRGs that involve sepsis, and (3) finalizing Conditions of Participation to require hospital antibiotic stewardship committees.   Updates 1 and 2 were in August final inpatient rulemaking (entry point here); the CoP requirement was a special rule issued September 25 (entry point here).

BARDA and PAC-CARB

For those who aren't familiar with it, the national biodefense agency BARDA provides substantial funding for antibiotic resistance technologies (including diagnostics as well as drugs), and an international public-private funding agency, CARB-X, is an innovative approach to funding.

There is a President's Advisory Commission on Antibiotic Resistance (PAC-CARB), which last spring held a special session to urge HHS to finalize the Conditions of Participation for hospitals to require antibiotic stewardship committees.   HHS also is producing a second five-year National Action Plan for coordinated federal efforts in antibiotic resistance policy and investments (here).

Antibiotic Stewardship Programs: JC, CMS, CDC

Antibiotic Stewardship Programs (ASPs) are required both by the Joint Commission on hospital accreditation and CMS, but CMS worked to insure its requirements were met by meeting JC requirements.   Both sets of rules are predicated on Core Elements of ASP's, produced several years ago by CDC.  CDC is said to be in the midst of revising the Core Elements in the next month or two.

IDSA, Pew Foundation

Two of the independent organizations heavily involved in antibiotic stewardship policy are Infectious Disease Society of America (IDSA) and Pew Foundation.

Diagnostics and Hospital Budgets

On October 31, 2019, 360Dx ran an excellent (subscription) article discussing how "one of the hottest categories in diagnostics is antibiotic resistance testing," while such new molecular tests frequent collide against fixed hospital inpatient budgets.  And fixed outpatient budgets too - Medicare since 2014 bundles all clinical chemistry and microbiology tests to hospital outpatient visits or surgeries (with an exception only for human genetic tests). 

DISARM Bill and AdvamedDx

On the Hill, the DISARM bill has been introduced in both houses.  This is the Developing an Innovative Strategy for Antimicrobial Resistant Microorganisms Act of 2019, see press release here and full bill here (S. 1712).  DISARM would pay for certain priority antibiotics on an average-sales-price basis for Medicare inpatients, on the requirement that hospitals participate (1) in the CDC national data registry for antibiotic resistance (NHSN) and (2) have ASP in place [the latter is now required by CMS, which it wasn't when the bill was introduced]. 

In a six-page public letter to the Senate, in July 2019, AdvamedDx suggested that the DISARM bill should have more policy initiatives related to diagnostics (here).  Advamed's proposed revisions include requiring a lab director on ASP committees, and upgrading lab technology with faster turnaround times and clearer reports with better decision support capabilities electronically integrated. 

(On the latter point, Biomerieux is supporting advanced analytics software to take the diagnostics lab far beyond historic "sensitivity and resistance" reporting; here. BARDA is also supporting Beckman Coulter to integrate advanced EHR-based algorithms with lab test reporting in sepsis, here.)

Medicare Won't Cover FDA-Approved HIV-1 Genotyping Due in Cancer Patients, Due to Stupid Policy Glitch

In March 2018, CMS released a blanket policy for all uses of NGS testing in Medicare patients with cancer.  The policy limits NGS testing to patients with "advanced cancer" (metastatic, recurrent, stage 3 or 4).   By my reading of the NCD, and I think most readings, the limits are absolute, as the policy is worded, it applies to all NGS tests and doesn't distinguish by type of NGS test.  Therefore, if you had a small skin cancer and a doctor ordered the FDA "Sensa" HIV-1 NGS-based resistance test, Medicare wouldn't pay for it. 

Obviously, CMS staff were thinking of tests like NGS Foundation One test (which they were reviewing at the time) when they limited all NGS test payment exclusively to "advanced cancers."   The policy really has got to be updated to only control testing in areas the NCD actually reviews (I read Medicare law this way; here).   If an NCD reviews A and B, they can then create policy cover A and perhaps not cover B; but they can't non-cover topics C or D that they never reviewed.

Very Brief Blog: Digital Therapeutics Alliance Release Suite of Documents

In September, the FDA released a number of documents in its continuing efforts to stay abreast of digital health (entry point here).

This week, the Digital Therapeutics Alliance issues a press release and its own suite of documents.

• See the DTA website here.
• See the new press release here, with a series of links therein.
• Topics include:
• Code of Ethics here.
• Product Best Practices here.
• Categorization of Digital Health (umbrella), Digital Medicine, Digital Therapeutics here.
• Another product categorization table here.

Partial screenshot of DTx table

I've put today's document versions into a zip file in the cloud here, but check DTxA website for updates.

FDA Clears Whole Exome Tumor Test for NantHealth; 510(k)

On November 12, 2019, NantHealth announced it had received a first in class FDA clearance for an NGS-based whole exome test.   In addition to sequencing some 19,000 genes and 39 million base pairs, the test reports the same 468 cancer-relevant genes reported by the Memorial Sloan-Kettering IMPACT test, a predicate test for NantHealth.  IMPACT was a de novo clearance in November 2017.  Nanthealth's test also reports tumor mutational burden (TMB.)

The branded name is OMICS CORE.

• See NantHealth press release here.
• See open access summary at Genomeweb here.
• See open access at Clinical Omics here.
• FDA tracks the test as K190661 here.
• See the 180-page FDA decision summary, K190661, here.
• See Genomeweb on the decision summary, here.

The 57-page 2017 FDA evaluation of MSK IMPACT (DEN 170058) is online here.  it will be very interesting to see the FDA's published validation requires for whole exome in Nanthealth's FDA review.

It's hard to be sure from the short press releases, but it may be that the test reports the 468 genes (like IMPACT) but uses exome to calculate TMB (or for research data).

NantHealth's most recent investor call, November 7, is online here.  NantHealth was up 10% today, to $0.76 with a market cap of $85M.  (Current assets are about $28M; retained earnings are -$918M; initial valuatoin was $1.7B.)  In 2017 and 2018, each year NantHealth had about $85-90M revenue against net lincome (loss) of about $175-190M.

Horizon Watch: The FDA's Payer Communications Page (Includes CMS Parallel Review)

I noticed that the FDA has updated its consolidated Payor Communications webpage, with multiple sections and links, as of September 2019.

• See the FDA Payor Communications Page here.
• See the FDA Drug & Device Payor Communications Guidance, here.
• 26 pages, PDF, June 2018.
• See Gottlieb statement about the value of FDA-Payor interactions, here.
• See an archived commercial webinar on FDA's package of  payor communications at Icon, here.

Sections on the FDA Payor Communications Page include:

• An overview and background section; 
• A voluntary Commercial Payor section
• Includes Aetna, Kaiser, Cigna, Humana, etc., and evidence groups like ECRI; 
• Instructions and contact information for the "CMS-FDA Parallel Review" process.  

Note that the CMS Parallel Review process is very rare, used in full only twice in a decade. 

At the bottom of the webpage are a number of links to various Commissioner statements, Federal Register publications, etc.    For example, FDA last held a "Payor Summit for Medical Devices" three years ago, in 2016.

You can also request an FDA speaker to come talk about these policies at an event or conference (instructions on the webpage).

CMS Updates PAMA and ADLT Pages; Offers to Create G Codes in Lieu of PLA Codes

I don't have screen shots of every CMS page edition, but I think they've significantly revamped their webpages for PAMA regulations, PAMA reporting, ADLT applications, and rapid quarterly HCPCS codes.

They now have a sort of consolidated PAMA Regulations page under the Clinical Lab Fee Schedule division that offers one-stop shoping, usually to online documents but sometimes to other web pages.

See the CLFS home page here.

See the PAMA regulations home page here.

There are successive sections, each with a few links, for PAMA reporting rules, PAMA reporting computer system, ADLT applications, and an application for a quarterly CMS code (in lieu of a PLA code.)

Of note, there is a webpage, updated 10/15/2019, that I hadn't seen before.  Here, CMS welcomes your quarterly application of a lab code, which will start with "U" (rather than G).  The codes move as fast as PLA codes; for a January 1 deadline, you get an April decision and a July effective date.  CMS won't give you a unique HCPCS code if you have, or if you are applying for, an AMA CPT code.

CMS will issue codes for ADLTs and FDA cleared or approved tests.  The 7 page PDF application is here.

Very Brief Blog: CMS Posts Final PFS, OPPS Annual Rules On Time

Despite not posting proposed annual policymaking for the physician fee schedule and hospital outpatient policy until late July, with comment periods running until ;ate September, CMS was able to release final rulemaking for CY2020 on November 1, giving the public the required 60 days notice before January 1.

CMS releases "inspection copies" or typescripts now; typeset Federal Register versions will appear around November 12 (OPPS) and November 15 (PFS).

• The consolidated Federal Register page for CMS announcements is here.
• Hospital Outpatient Policy page here.
• OPPS inspection copy typescript here. 1113pp.
• Federal Register Final Rule, Nov 12, 84FR61142, 351pp, here.
• OPPS Fact Sheet here.
• OPPS Addendum ZIP Files (Such as APC rates and CPT to APC assignments) here.
• Physician Fee Schedule Policy page here.
• PFS inspection copy typescript here.  2475pp.
• Federal Register Final Rule, Nov 15, 84FR62568, 996pp, here.
• PFS Fact Sheet here.  Quality Program Fact Sheet here (28pp PDF).
• A PFS press releases emphasizes reducing provider burden and improved quality metrics, here.
• PFS addendum ZIP files online here.
• Consolidated Discoveries Zip File
• To save hunting and pecking, I've putting the several rules, press releases, OPPS Zip Excel files into one 32 MB open access zip file in the cloud - here.

The PFS rules includes several new opioid abuse policy programs, one for general outpatient care, one for new bundled payments for Opioid Treatment Programs (OTP, aka methadone centers).   The latter program had threated to bundle all monthly urine tox lab fees into a single payment of a few dollars but CMS revised this to include more sophisticated testing.  See a public letter from Aegis, a leading tox lab, on the problems CMS would have caused with the original proposal (here).  The opioid test policies get their own press release here.

The OPPS rule, for the lab industry, was notable for proposed changes to the infamous and complex outpatient hospital Date of Service rule.  CMS is making no significant changes except to add an exclusion re blood banks at 42 CFR 414.510(b)(5) [typescript p. 1105].  (Text here).  Within the 1-14 day time period after an outpatient blood draw or biopsy, the lab that performs a human molecular test must bill for the test and the date of service is the date of test performance.  This means that whether a hospital or an outside reference lab performs, for example, an EGFR test on a lung biopsy, it must be billed as "date of performance" not "date of collection" which is the usual CMS DOS.  Said differently, if a hospital runs an EGFR gene test and a PSA test on the same vial, the EGFR test has "DOS" as date of performance, while the PSA test would have DOS as date of collection, except that in the OPPS setting the PSA but not the EGFR is bundled.  Note the same distinction of two DOS from one vial applies also for a physician origin blood sample handled and run the same day at Quest or Labcorp.  

CMS proposed to start a new Part A/B program for prior authorization with several surgeries that CMS feels are likely to be abused, like blepharoplasty.  Despite complaints, CMS is finalizing this.  I had my doubts that this was likely a program that CMS could implement well, due to the very minimalistic staffing of its MACs with RN or MD staff, but maybe it can if volumes are low.  Prior auth services will be CPT codes associaited with blepharoplaty, botulinum injections, panniculectomy, rhinoplasty, vein ablation.  Particular providers can be released from prior auth rules if they have high pass rates on submitted cases.  There were questions whether CMS had authority to institute Part A/B prior auth (see inspection copy, 992ff).  

Also in the OPPS system, CMS proposed cutting payments for the Heartflow advanced digital imaging service from $1500 to $750; the final price chosen will be around $900.  (Earlier article here). (Inspection copy, 255ff).   Flipping from the OPPS to the PFS rule, CMS proposes that some 3D imaging rendering CPT codes (e.g. 76376, 76377) may be misvalued (inspection copy, 174ff).

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CMS floated a plan for hospitals to push standard charges for increased transparency; CMS deferred action on this topic (inspection copy, 926ff).  Much ink had been spilled since July on this topic; entry point here.

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Related to the July announcement of multi-modal programs to improve CKD, ESRD, and renal transplant care, CMS proposed changes to the "expected donation rate" which is part of qualifying as a transplant procurement center; see OPPS inspection copy 927ff.