Journal Club: New Paper on LBx MicroCosting (Kramer et al., November 2022)

There are a few good papers on micro-costing for next generation sequencing and other forms of genomics, but not a lot.  And when they are produced, they're often vague on the critical role of overhead, or ignore that variable completely.

Here's a comprehensive look at micro-costing for circulating tumor DNA testing, November 2022, from Kramer et al, a Dutch group.  The authors take a comprehensive approach, including "personnel, materials, equipment, overhead, and failures."  Alternative policies and protocols give outputs that range from $199 to $9124 per sample (most scenarios $300-1000, all-in total costs and overhead).  

Note, however, that the models are academic and don't account for actually running a business or running clinical trials for products, or handling prior auth, dealing with diverse payors, or regulatory approvals.   They specifically remark that some important costs were left out, even with this elaborate model.   Find the article here and open-access, with supplements including the Excel model:

https://www.jmdjournal.org/article/S1525-1578(22)00309-9/fulltext

There's an old joke that you ask an economist or an accountant how much is 2+2, and he asks, 'How much do you want it to be?"   Behind that, there are different accounting systems for different purposes.  I recall from MBA school, there are at least three entirely different accounting systems to be aware of, financial accounting (generally accepted accounting principles, GAAP); tax accounting (following tax law); and activity-based accounting.   Other types of accounting are designed for investors, e.g. return on equity.  More recently, see challenges in the accounting for entities that are primarily intangible assets (see Capitalism without Capital, by Haskel & Westlake).   Unfortunately, in "applied economics," even basic accounting terms can be badly unused, often with blissful ignorance of the mistakes.  ("I didn't go to four years of medical school [graduate school] [residency] to use common accounting terms correctly.")

Kramer et al. have one of the most intellectually interesting approaches I've seen.   Besides a diverse range of inputs and overhead, plus accounting for batch size or total samples per year, they provide supplemental tables that cover 5 different methodologies:

1. Digital PCR,
2. PCR (model 1),
3. PCR (model 2),
4. Mass spec,
5. NGS.

Be sure to download the supplemental tables which are critical to the various use cases and arguments. Costs are presented in orthogonal cost breakdowns, one for cost category (personnel, equipment, sequencing, etc) and one for phase (pre-analytical, analytical, overhead, failure).   

One take-home lesson: There's no $100 genome here.

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As noted in the paper, see also the website, https://cfdna.nl/coin-home-english/  .

The authors point to another group doing a recent microcosting, although restricted to the NGS method, Kramer ref. 35,  Pisapia et al. 2022.  

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For an economically sound analysis of regualtory costs of VALID ACT for labs, see Huang et al. 2021 here.

Brief Blog: Dark Report Article on Lab Test Fraud

The November 21, 2022 issue of Dark Report has an article on genetic test fraud, focusing on a group of separately enrolled Medicare labs collectively known as "McNamara labs."  Per DOJ and Dark Report, $174M in false claims are alleged.   

I found a 30 page indictment PDF online here.   The report names 4 lab entities, some of which allegedly did not have the capability for genetic testing.   Such labs acquired samples, referred them elsewhere for lab processes, then billed Medicare for them.

Two rules are involved (aside from medical necessity concerns.)   First, lab tests billed by Lab A but referred out for lab work by Lab B, must be submitted to CMS by Lab A with a referral modifier on the claim line.  The DOJ document specifically alleges that claims lacked this referral modifier (PDF page 13).

Second, the tests referred out can only be billed to Medicare by Lab A under a strange rule called the 70/30 rule.  This is a law that a lab can only bill out in this way, if it meets a standard, that it actually does perform 70% of the tests that it bills.   Numerous online resources explain this (here, here, here).

• The original 70/30 statute is SSA 1833(h)(5)(A).

As far as I understand, the statute is based on number of tests.  So a lab could accession and refer out 300 $1800 BRCA tests ($540,000), as long as it performed 701 $3 glucose or hematocrit tests ($2103).  (This is my impression; but I'm not an attorney).

Labs Can Be Looked Up

The CY2020 billing patterns of the labs cited in the 30-page indictment can be looked up at a CMS website of paid claims (paid to which docs and which labs); I'll leave this as an exercise to the reader.  When I spot checked, the labs named by DOJ were high billers of 81408 and other Tier 2 codes; one was on Canal Street by the French Quarter in New Orleans (NPI '00340.)  I had seen some of the lab names before simply by trawling the 2020 CMS records for high payments on gene test 81408.

Through 2021, the lack of Tier 2 genetic test code edits in some Southern states was scandalous (here).

70/30 Rule?

The Dark Report article notes that, possibly, the 70/30 rule was being violated (while adding: there is not enough evidence to say).  

I didn't see any reference to the 70/30 rule at all in the indictment, unless I missed something.  As noted, lack of "referral lab billing modifier" was alleged by DOJ.  The title of the Dark Report article is a little ambiguous; "Lab allegedly billed Medicare for tests it did not perform," here not meaning the tests were never run by anybody, but that they were not run by the lab that billed.

The article appears to ask rhetorically whether a performing lab B, under a situation where the acquisition lab A still is the billing lab, might have responsibilities to report something.  This isn't directly part of the 70/30 rule at 1833(h).   But in May 2020, Reuters reported that PerkinElmer's reference lab was being probed for its role as a performing laboratory for tests acquisitioned and billed elsewhere.  Here.  However, other sources quoted PerkinElmer that it was not a investigation target, here.

   

Very Brief Blog: Medicare Enrollment Update Facts

November 2022, CMS releases updated Medicaid/Medicare enrollment numbers.

Total enrollment in both CMS programs and the ACA Marketplace is 157.9M (adjusted for 12M dual enrollment in Medicare/Medicaid; and of the 157.9, 14.5M are in ACA Marketplace plans).

$83.5M in Medicaid (includes duals), 7M in CHIP (children's care).

64.9m in Medicare, of which, 34M in traditional Medicare and 30M in Medicare Advantage.

https://www.cms.gov/pillar/expand-access

CMS Finalizes New Code Pricing for CY2023

On November 28, 2022, after market close, CMS posted final prices for new lab test codes for CY2023.

Find the zip file at this page, and search for CY2023 Final Payment Determinations.

I've also posted a copy, a Google Sheets cloud version, here.

Brief Analysis

There are 104 agenda items.  The final decision on 34 codes is "gapfill."   A change analysis suggests that CMS made changes in 15 codes, of which 12 were a shift from a crosswalk to gapfill.  No codes shifted the other way, from gapfill to crosswalk.  Just 3 codes were a shift within the crosswalk to a different crosswalk.

Those 3 shifts in crosswalk were a related triplet of codes (0308U, 0309U, 0310U) were all shifted from crosswalk of 81506 to 0163U.  The codes are Prevencio codes for 3- or 4-protein cardiology MAAA tests, and 0163U prices them at $390 (the Beacon BeScreened CRC test).  

Only 6 of the crosswalked codes were crosswalked to a pair of codes or rarely, a multiple of a code.  The rest of the crosswalks were simple crosswalks to a single code.  

By my tally, of the crosswalk targets, 44 were regular CPT codes and 26 were PLA codes.  Of the PLA codes, 0203U was used as a crosswalk target 4 times, and 0175U and 0163U each 3 times.

Quest Alzheimer Amyloid Test

CMS had proposed to price the Quest LDT serum amyloid Alzheimer test 0346U to a very low price (around $20) but this is one of the 12 codes that switched from crosswalk to gapfill in the review process.  I'm sure this was a big relief for Quest.   In next year's pipeline, we'll probably see coding and pricing for the FDA-approved Fujirebio amyloid test, which is a CSF based test.

PGX Codes

I noted in a blog that there were a range of PGX panels under pricing review, and that the prices seemed to jump around in a willy-nilly fashion I could not understand.   There were no changes to these final PGx prices, except the general CPT code panel 81418 was switch from a $742 crosswalk to the gapfill method.

ADLT Policy?

In agenda FACA #34, ALM #62, 0326U, in the "rationale" CMS says it will gapfill the code in question rather than crosswalk it.  However, they also seem to newly raise a question as to their positioning on using ADLT codes as the target for a crosswalk price.   CMS did not mention this in prior publications or in the annual public meeting, so they seem to be raising a new policy issue in an obscure way (buried inside of 1 of 100 comments today.)

Appeals

You can file an appeal until January.   Appeals merely result in the code being taken up again, as if new, at the Summer 2023 pricing meetings for CY2024.   Appeals do not change the 2023 price published today.

CMS writes:  We welcome reconsideration requests on our final determinations for the basis of payment.  All comments must be submitted electronically by January 28, 2023 to the following CMS mailbox: CLFS_Annual_Public_Meeting@cms.hhs.gov.  When submitting reconsideration requests, please refer to the specific code and its rationale.

Nerd Note on Price Stability re PAMA Years

Codes that are crosswalked in this posting will change to new PAMA prices in CY2024, if the crosswalked target code was in use in 1H2019, the reference period for PAMA CY2024-2026.   

I believe if a new 2023 code is crosswalked to a code released after 1H2019, a code which has no data for 1H2019 PAMA collection, then, the price of the crosswalk target and of the new 2023 code remains the same until the crosswalk code is mature enough to go into the next PAMA cycle (data 1H2025, collection 2026, pricing 2027).  But by that time, the new 2023 code will also be active in 1H2025,  so it will get its own PAMA price and be detached from the crosswalk target code.  (Whew!)

Journal Club; Wahida, Nat Rev Cancer, 6 Riddles for Precision Oncology

I love research and clinical applications in oncology that go beyond "the sequence" alone (e.g. recent unexpected work on chromothripsis, genomic instability, here, here.)  

Here's an excellent article with a broad view of molecular oncology and its current puzzles.  Find it in Nature Reviews Cancer, Wahida et al.  Find it here (subscription). 

I would summarize the six riddles as:

1. Timing.  Is it critical to start precision therapies early, before multiple driver pathways accumulate?
2. When is a mutation pathogenic?  Which of several, in a tumor, is the most important driver?  Why do some conditions (from adenomas to endometriosis - have "pathologic" mutations but are not cancer?
3. Are mutations tissue-tropic?   Such as BRAF having different impacts in different tissues of origin.
4. Which tumor clone should be targeted?  Are therapies "irrelevant" to some parts of the tumor?
5. Are the roles of age, sex, microbiome bigger than we suspect?
6. When, and based on what biomarkers, do we switch to immunotherapy?  What about specific mutations (epitopes) rather than gross tumor mutation burden?

See the first author's twitter here.  See his Twitter-summary ("tweetorial") of his article here.

National Academies: Focus on Diagnostics, Equity, Other Implementation Topics

A couple months ago I had the chance to speak at a Washington forum by National Academies of Science, Engineering, Medicine, on diagnostics and health equity issues.

Here's a new article in JAMA Health Forum by NASEM on its goals and programs.  The article focuses on the "National Leadership Incubator" for diagnostic excellence, and outlines its key goals.  Find it here:

https://jamanetwork.com/journals/jama-health-forum/fullarticle/2799031

The authors write,

• Few cross-cutting, disease-agnostic funding models have specifically been designed for leadership development related to research and implementation on patient safety, quality, and equitable health care system improvement. 
• The NAM DxEx Scholars program served as a leadership incubator focused on transforming the implementation of diagnostic excellence through the lens of health equity. The inaugural cohort included scholars from a wide variety of clinical specialties. 
• Scholars met virtually to learn foundational topics related to diagnostic excellence, cognition and clinical reasoning, equity and inclusion, systems thinking, patient engagement, data science, and change management. 
• Each scholar had an assigned project mentor with expertise relevant to their project and also formed topic-focused groups within the cohort to promote collaboration and peer mentorship. The program culminated with an in-person summit where scholars shared their scholarship and implementation and sought guidance to expand their reach beyond the fellowship.
• The inaugural NAM DxEx scholars identified the following 5 foundational themes to improve the diagnostic process: (1) there is no diagnostic excellence without equity; (2) uncertainty is ubiquitous; (3) diagnostic safety frameworks are universally applicable; (4) data science and machine learning can be applied to the diagnostic journey; and (5) the diagnostic process must always be guided by the patient’s voice.

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Bonus citation.

In September 2022, PAC CARB (President's Advisory Council on Combating Antibiotic Resistance) held a public meeting on pandemic & AMR issues.  Meeting documents (usually includes transcript) are not posted yet.  But three topics included:

https://www.hhs.gov/ash/advisory-committees/paccarb/meetings/upcoming-meetings/september-12-2022-public-meeting/index.html

(Note, that link will likely change when moved from "upcoming" status to "past')

Module 2: Diagnostics

Understanding the Human Diagnostic Communication Network (Labs, Public Health Departments, and Providers) 
Kim Musser, New York Department of Health Wadsworth Center

Developing New Human Diagnostics in an Emergency Situation
Jean Patel, Beckman Coulter

Current Capabilities and Capacity for Diagnosing Fungal Infections and Resistance
Tom Chiller, CDC/Mycotic Disease Branch

The above videos are here: 

https://www.youtube.com/watch?v=8xc1VdgnCJo&list=PLrl7E8KABz1HnWhPMHKxSqPUjh3V4VK0Q&index=8

FDA Head of Oncology Points to New Approaches to Cancer Diagnostics

See an article by Angus Liu at Fierce Biotech, quoting FDA head oncologist Richard Pazdur on new approaches to oncology in vitro diagnostics. Find it here.

For quite a while, FDA has approved drugs "to be used with an approved diagnostic" without naming the diagnostic.  Meanwhile, FDA approved diagnostics based on a specific named drug.  For example, EGFR drug "Exkivity" is paired on label to a Thermo Fisher test, and the similar EGFR drug "Rybrevant" is paired to a Guardant test.

Fierce Biotech writes,

• [As] FDA oncology chief Richard Pazdur, M.D., sees it, [current] companion diagnostics don’t serve patients that well.
• Existing cancer companion diagnostics are bundled with the specific cancer drugs they’re approved for. But the FDA is looking to get around this one-drug-one-test situation by looking at “minimal performance criteria” of tests, Pazdur said.
• The concept of a minimal performance criteria, Pazdur said, would allow doctors to use any test that meets those standards, rather than having to stick to specific tests. But the idea doesn’t preclude testmakers from developing and selling drug-specific diagnostics, he added.
• The FDA’s medical device regulators are working on a pilot program to implement that proposal, Pazdur said. The director of the Oncology Center of Excellence made the comment during a discussion with FDA Commissioner Robert Califf, M.D., at the Friends of Cancer Research annual meeting on Thursday.

See more at the original open-access artice.

Very Brief Blog: Laura Beerman's Health Policy & Medicare Articles

Several interesting articles by healthcare journalist Laura Beerman over at Health Leaders Media.

In a November 21, 2022 article, she profiles a new CMMI strategy document, and draws parallels to a recent September 2022 strategy report also from the same CMS division.  Find it here.  

A few weeks ago, Beerman had an article profiling CMS's start-and-stop efforts to produce a novel technology coverage policy (e.g. "TCET").  Her article was triggered by a CMS policy piece in JAMA Internal Medicine and sets that publication into a context.   Find it here.  

She also had a nice recent article on electronic adjudication of pre-authorization here.

For her homepage of recent articles, here.  Per Linked In, Beerman has been with Health Leaders since 2004.

National Academy on Rapid Diagnostics for Antibiotics: Full Records for October Workshop

National Academies of Science and Medicine, in DC, run a busy schedule of public workshops, and on October 13-14, 2022, they held one on diagnostics for antibiotic resistance.

The meeting video is archived, along with all the decks, and these workshops usually result in a 100-page report six or twelve months later.

Find the meeting home page here:

https://www.nationalacademies.org/event/10-13-2022/accelerating-the-development-of-rapid-diagnostics-to-address-antibiotic-resistance-a-workshop

See also this page.

I've clipped some key text from the meeting homepage, below.  Note that the text opens with links to other homepages for topics at NASEM.

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On October 13-14, 2022, the Forum on Drug Discovery, Development, and Translation, the Forum on Medical and Public Health Preparedness for Disasters and Emergencies, and the Forum on Microbial Threats hosted a public workshop for stakeholders to discuss the current landscape of rapid point-of-care diagnostics to address antibiotic resistance, consider challenges and opportunities for spurring innovation, and discuss practical next steps for accelerating the development of new diagnostic tools.

Background

The use and misuse of antibiotics contributes to the rise in drug-resistant bacteria – a serious and worsening threat to human health. Addressing the problem of antibiotic resistance requires measures to spur innovation and ensure the prudent use of existing drugs. Rapid point-of-care diagnostics can play an important role in avoiding unnecessary use of antimicrobials by providing clinicians with the right information at the right time to help them make decisions about appropriate drug treatment for patients. Diagnostics also have the capacity to support early detection and diagnosis of drug-resistant bacterial infections, enable disease surveillance, and help prevent disease spread.

The public workshop featured invited presentations and discussions to:

• Examine the current state of rapid diagnostic development, including examples of successes and limitations of current approaches.
• Consider the unique challenges for the development and use/uptake of rapid diagnostics in health care settings (e.g., feasibility of clinical utility studies)
• Consider gaps that rapid diagnostics may be best-suited to address (e.g. tools to support targeted treatment decisions in the healthcare setting, tools to enable real-time surveillance based on routine hospital data).
• Discuss practical short- and long-term opportunities for spurring the development of new diagnostics that can help address antibiotic resistance.

CMS Delays MEDCAC on CED From Dec 7 to Feb 13/14, 2023

 Last September, CMS announced a public advisory meeting - MEDCAC - on its coverage with evidence development criteria (CED).  In conjunction, AHRQ issued a 35 page report on the current criteria.  Original blog here.

On November 17, CMS announces a new date of February 13/14, 2023.  This will allow stakeholders more time to read and comment on the background document (now released in a 43-page version, but with the same two key questions).   Also, CMS will release a "question list" for the MEDCAC by December 31, giving the public at least six weeks to consider them.

See the update page here.   From Pearl Harbor Day to Valentine's Day.

See the new 43 (not 35) page AHRQ document here.

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CED may be a key component of the administration's technology initiative, TCET, Transitional Coverage for Emerging Technologies.   I was disappointed last fall that the meeting structure, and report, focused on "criteria" for CED rather than purposes, choices, and value creation of CED.   The criteria are sort of apple pie ("the study is sponsored by an organization that can complete it successfully," or "the rationale of the study is well-supported by evidence.")   Obviously, nobody, absent such guidance, would otherwise have enthusiastically endorsed CED by an organization manifestly unable to complete it, or eagerly approve a study design that made no sense.   I noted at the time you could build a road that fulfills all design criteria (correct asphalt, correct width, correct signals and correct speed limit) that goes nowhere.

Very Brief Blog: OIG's Annual CMS Lab Report Delayed to 2023 (Not Fall 2022)

This report appeared in late December 2022 here. 

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Since PAMA 2014, the OIG has been tasked with producing an annual report on lab industry spending in Medicare (both Part B labs and hospital outpatient labs).

I noticed today, the CY2021 report, which normally would appear in Fall 2022, is calendared to appear in 2023 this time.  So it's later than typical years.

See my October 29 report on the horrifyingly abnormal Part B spending on literally bizarre genetic test patterns in CY2021, based on my analysis of newly released CMS raw data for CY2021.  Here.  

https://oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000725.asp

Very Brief Blog: 2/3 of Lung Cancer Patients Miss Precision Opportunities

 A new paper, from collaboration between the consultancy Diaceutics and Personalized Medicine Coalition, finds that a majority of lung cancer patients face unnecessary barriers in access to precision oncology.

The study, by Sadik et al., appears in Journal of Clinical Oncology/Precision Medicine, and is open access.  The authors modeled that for about half of lung cancer patients, they never get appropriate biomarker measurement.  Of those with actionable results, at least 30% do not receive the indicated treatment.

Find the open access publication here.

Find the PMC press release here.

For a subscription article on the Diaceutics/PMC results, see Genomeweb here.   At the same place, for a related early-November subscription article, "Industry Coalitions Push for...Comprehensive Genomic Profiling," see here.  And over at Nature Clinical Oncology, see a brand new November 15 article on global barriers to oncology drug access, without which access, biomarkers alone in any number don't accomplish much - here.

See a 2022 paper on the rate of morbidities from biopsy (supports LBX) here.

CPT Web Page for Feb Meeting; New Tumor Genomics Lab Codes!

CPT has set up a web page with agendas and registration for the February 2-4, 2023 Editorial Panel meeting.  The format will be "hybrid," with the bricks & mortar part in La Jolla.

Find the web page here:

https://www.ama-assn.org/about/events/cpt-editorial-panel-hcpac-annual-meeting

CPT applications were due November 2, and the submitted items are released in two tranches:

• The first agenda release is lab codes, because lab codes must go through multiple subcommittees and need an early start; 
• Other CPT codes (non-lab) will be released later.   
• Process: 
• The title of the code is released, and interested parties can request a confidential information packet on the code of interest, and after reading it, submit comments.   
• This process moves VERY fast for lab codes so check the new online code list agenda quickly.   

New Tumor Genomics Codes

Over the past six months, workgroups have been working to revise the tumor genomics codes, accommodating trending topics like TMB, so this editorial cycle may be of more than typical interest. Requests are submitted, logged, responded via an AMA web portal called ZenDesk.  Request by November 21, submit comment, if any, by December 2.  

Revisions finalized either at this February 2023 CPT meeting, or at a fallback CPT meeting in May 2023, will be priced by CMS in summer 2023 and published for use starting January 2024.

See the lab item agenda here:

https://www.ama-assn.org/system/files/feb-2023-path-lab-agenda.pdf

Early-Appearing Updates Are Out

The new CPT 2023 annual code book has been published, and includes several new tumor genomcis codes to distinguish DNA/RNA for tumor testing (e.g. 5-50 genes, 51+ genes) such as DNA, or RNA-DNA, or RNA analysis.   The reforms for the February 2023 discussion continue this trend but will be more complex.

MolDx Posts Key Questions for Public Meeting on Transplant Tests

Earlier this month, MolDx announced that it would hold (Palmetto + Noridian) two different public meetings on genomic tests for transplant management. Original blog here.  Last week, when these were announced, CareDx stock bounced up and down between $12 and $16.

They have now posted meeting materials - specifically, agendas and key questions.  There is one set for (kidney & liver) tests and one set for (heart & lung tests.)

Find Kidney/Liver documents here.  November 16, 2-4 pm CT.

Find Heart/Lung documents here.  November 17, 2-4 pm CT.

I've also put the 4 PDFs in one cloud zip file here.

See an unofficial transcript of the Kidney meeting, here. Of the Heart/lung meeting, here.

MolDx CAC on Transplant Tests: Noridian versus MolDx Wording

 

As I noted in a November 2 blog, in mid-November the Noridian and Palmetto MACs will hold a joint public advisory meeting on their LCDs for circulating-DNA-based kidney and liver graft rejection.  Original post here.  

There are some subtle differences between the Noridian announcement of the agenda, and the Palmetto MolDx one.

Noridian	MolDx
The Centers for Medicare and Medicaid Services (CMS) assigned Noridian Healthcare Solutions, Jurisdiction E and Jurisdiction F the task of developing Local Coverage Determinations (LCDs).    Noridian requested an internal reconsideration of the Molecular Diagnostic Testing for Acute Rejection LCD after noting unexpected utilization patterns that are outside of expectations based on evidentiary review and manufacturer documentation.    The A/B MACs participating in the MolDX Program seek to learn from the experts’ analysis of the selected literature regarding the clinical utility of molecular diagnostic testing for acute rejection. The SME discussion may inform proposed revision(s) to relevant policy (LCD) as part of a contractor-initiated internal reconsideration.	Noridian Healthcare Solutions along with Palmetto GBA will host a Multi-Jurisdictional Contractor Advisory Committee (CAC) Meeting via teleconference on November 16, 2022, from 2–4 p.m. CT. Discussions will focus on Molecular Diagnostic Testing for Acute Rejection in Kidney or Liver Allografts.
The purpose of the CAC meeting is to provide a formal mechanism for healthcare professionals to be informed of the evidence used in developing the LCD and promote communications between the MAC and the healthcare community.   For this CAC, invited Subject Matter Experts (SMEs) are asked to examine and discuss selected published articles related to Molecular Diagnostic Testing for Acute Rejection in Heart, Lung, Kidney and Liver Allografts and rate their level of confidence in the literature by responding to a series of Key Questions.   During the CAC meeting, discussions between the invited SMEs and contractor (CMD) facilitator(s) will be recorded. Any stakeholders and the general public are invited to register for this meeting and listen to these discussions in real-time; or they may also listen to a recording of the meeting and access a transcript of the discussion posted to the contractors’ website following the event.	The Centers for Medicare and Medicaid Services (CMS) assigned Medicare Administrative Contractors (MACs) the task of developing Local Coverage Determinations (LCDs).   The purpose of the CAC meeting is to provide a formal mechanism for healthcare professionals to be informed of the evidence used in developing the LCD and promote communications between the MAC and the healthcare community.   The CAC panel will be asked to discuss the clinical literature related to Molecular Diagnostic Testing for Acute Rejection in Kidney or Liver Allografts and rate their confidence in a series of Key Questions.   Discussions will occur between CAC panelists and Contractor Medical Directors. The public may attend; however, questions from the public will not be entertained.    Interested stakeholders are invited to listen via teleconference; however, advance registration is required. Registration is available at CVENT Kidney or Liver Allografts.   Once registered you will receive the teleconference information via email prior to the meeting. Lines will remain muted throughout the conference except for the invited CAC panelists and the MAC hosts.

I don’t know what the “unexpected utilization patterns” are, but my memory is the LCDs in this space are pretty vague about specific indications or rules or frequency for medical necessity, and that vagueness may be raising issues.

 

Noridian

https://web.cvent.com/event/3fe72b43-dc24-4090-9b8b-fdf67af7713e/summary

 

Palmetto

https://palmettogba.com/palmetto/jmb.nsf/DIDC/VN8Y8XLZGA~Medical%20Policies~LCD%20Development%20Meetings

Photo.

2021 Category III Codes: Extreme Concentration of Usage Continues

Around November 1, CMS released Part B utilization by CPT code for CY2021, here.  I primarily discussed MoPath utilization.  I did a supplemental blog on ADLT utilization here.  

In this blog, I do my annual analysis of Category III or "T" codes.  CMS lists 260 active Cat III codes for CY2021.  Total payments for 2021 were $185M, but highly concentrated.

Only the top 30 had more than $100K in utilization.   Only codes in the top 75 had more than $10,000 in utilization.  Just about half had $1000 or less in utilization, many of those being "0".

The top 11 codes had more than $1M in payments, of which 5 or about half were related to ophthalmology.  The top code, 0191T, an anterior segment ocular procedure, had $122M in payments or 66% of all payments for all of the 260 Category III codes.

The top 4 codes had 85% of payments, for the 260 codes.  As to pricing per use, about half of the top 11 codes paid more than $1000 per use.

Click to enlarge.

0055T (the bottom code) is a bizarrely over-aged Cat III code and somehow remained Cat III even with years of use and >8000 uses per year (in Medicare).  For CY2023, the oldest codes are 0042T and 0054T, 0055T.   

MolDx Updates Multiple Technology Assessment Forms

MolDx divides its coverage rules among three sources, LCDs, billing articles attached to LCDs, and Technology Assessments, which are found on the MolDx website.

On November 2, 2022, MolDx updated a number of tech assessment forms.

• NGS PF 004, TA for solid tumors.
• NGS PF 005, TA for myeloid cancers.
• NGS PF 006, TA for inherited cancer testing.
• MRD PF 016, TA for minimal residual disease testing

For example, if you are testing for inherited risk of cancer in a breast cancer patient, see LCD L38972, its attached billing article, AND ALSO you must see NGS PF 006.   NGS PF 006 lists the genes that must be included in a panel when breast cancer is the reason for testing.   (For example, testing BRCA alone isn't allowed anymore).  

Note that TA spreadsheets often have multiple tabs.

Im hereditary cancer, PF006, if I tally correctly, for breast cancer only panels with at least 11 genes are covered (smaller panels are not covered, because the 11 genes are medically necessary and thus required).  These are PTEN, BRCA 1,2, STK11, TP53, PALB2, ATM, CHK2, NF1, RAD51C, RAD51D.   

 

ADLT Codes 2021: 10% of MoPath Spending, and Mostly "FDA ADLTs"

On October 28, 2022, CMS released data on Part B payments for all CPT codes in CY2021.  

I did an extensive analysis here, including that a third of payments appear to be through "very highly suspicious" codes to labs in a handful of southern states.  

For example, labs that billed 1 or more of EACH ONE of the rare Tier 2 code levels for every elderly Medicare patient they saw.   (This is statistically like every one of the 500 patients in a row each winning the lottery or each having a royal flush).

ADLT Codes   

Since 2018, there's been a rarely used pathway for price setting, called "Advanced Diagnostic Laboratory Test" or ADLT.  These tests are always sole source tests (like Oncotype or Foundation Medicine) and they may be (A) either FDA-approved or (B) a clinically unique MAAA test.   

CMS has approved 12 tests as ADLTs, of which, 4 arrived via the FDA pathway.

Here's a chart segregating the 12 ADLT-priced codes from the other hundreds of molecular codes.  Click to enlarge.

DOLLAR VOLUME OF ADLTs

The dollar volume of all ADLTs in CY2021 in Part B was $208M.   

How does this compare?  All MoPath payments, including microbio and COVID, were about $4B, so ADLT payments would be about 5%.   

However, if you subtract about $1B in COVID testing, and also subtractnearly $1B in highly highly dubious payments, that leaves about $2B in legitimate mopath payments.  At $208M, ADLTs would now be about 10% of the legit 2021 payments.

DOLLAR VOLUME WITHIN ADLTs

As shown in the table above, ADLT prices range from $1755 to $7193.   

57% of ADLT payments go through two codes (Castle 81529 and Foundation 0037U), while 90% of ADLT payments went through four codes (adding 0239U, 0242U).   Or, 8 of 12 ADLT codes had only minimal payments in 2021.

The "FDA ADLTs" are Thriving

FDA codes currently dominate payments.  

While FDA codes were only 4 of the 12 codes, FDA codes garnered $148M or 71% of all ADLT type payments.

MolDx Will Hold Meetings on Organ Rejection Tests

On its public meetings page, MolDx now lists two meetings on the topic of testing for organ rejection.

On November 16, they will discuss tests for kidney and liver graft rejection.

On November 17, they will discuss tests for heart and lung graft rejection.

Generally, MACS post transcripts of the meetings a few weeks later.  Sometimes it's tricky to find where one of the MACs stores these transcripts.  At Palmetto, they are on file here.

Find more information here (note the Nov 16/17 events are on the CAC tab and are indexed by the announcement date 10/31):

https://palmettogba.com/palmetto/jmb.nsf/DID/U0I2M2TFO0

Noridian has updated its website with some text around the CAC purpose.

https://web.cvent.com/event/3fe72b43-dc24-4090-9b8b-fdf67af7713e/summary

The Centers for Medicare and Medicaid Services (CMS) assigned Noridian Healthcare Solutions, Jurisdiction E and Jurisdiction F the task of developing Local Coverage Determinations (LCDs). 

Noridian requested an internal reconsideration of the Molecular Diagnostic Testing for Acute Rejection LCD after noting unexpected utilization patterns that are outside of expectations based on evidentiary review and manufacturer documentation. 

The A/B MACs participating in the MolDX Program seek to learn from the experts’ analysis of the selected literature regarding the clinical utility of molecular diagnostic testing for acute rejection. The SME discussion may inform proposed revision(s) to relevant policy (LCD) as part of a contractor-initiated internal reconsideration. 

The purpose of the CAC meeting is to provide a formal mechanism for healthcare professionals to be informed of the evidence used in developing the LCD and promote communications between the MAC and the healthcare community. For this CAC, invited Subject Matter Experts (SMEs) are asked to examine and discuss selected published articles related to Molecular Diagnostic Testing for Acute Rejection in Heart, Lung, Kidney and Liver Allografts and rate their level of confidence in the literature by responding to a series of Key Questions. During the CAC meeting, discussions between the invited SMEs and contractor (CMD) facilitator(s) will be recorded. Any stakeholders and the general public are invited to register for this meeting and listen to these discussions in real-time; or they may also listen to a recording of the meeting and access a transcript of the discussion posted to the contractors’ website following the event.

Some contacts immediately asked me, what does this mean:  "utilization patterns that are outside of expectations."   I have no idea, directly.   Possible considerations would be, for example, if testing was biweekly and they expected monthly, or if monthly if they expected quarterly.  My memory is that these LCDs are pretty vague on indications for testing, or frequency of testing, and now after a year or two MACs are facing the results of the vagueness.   The way the paragraphs are written also suggests there may be some daylight between what the Noridian team thinks and the MolDx full-time team.

The description of the same meeting on the Palmetto website is a little different.

https://palmettogba.com/palmetto/jmb.nsf/DIDC/VN8Y8XLZGA~Medical%20Policies~LCD%20Development%20Meetings

Noridian Healthcare Solutions along with Palmetto GBA will host a Multi-Jurisdictional Contractor Advisory Committee (CAC) Meeting via teleconference on November 16, 2022, from 2–4 p.m. CT. Discussions will focus on Molecular Diagnostic Testing for Acute Rejection in Kidney or Liver Allografts. 

The Centers for Medicare and Medicaid Services (CMS) assigned Medicare Administrative Contractors (MACs) the task of developing Local Coverage Determinations (LCDs). The purpose of the CAC meeting is to provide a formal mechanism for healthcare professionals to be informed of the evidence used in developing the LCD and promote communications between the MAC and the healthcare community. The CAC panel will be asked to discuss the clinical literature related to Molecular Diagnostic Testing for Acute Rejection in Kidney or Liver Allografts and rate their confidence in a series of Key Questions. Discussions will occur between CAC panelists and Contractor Medical Directors. The public may attend; however, questions from the public will not be entertained. 

Interested stakeholders are invited to listen via teleconference; however, advance registration is required. Registration is available at CVENT Kidney or Liver Allografts.

Once registered you will receive the teleconference information via email prior to the meeting. Lines will remain muted throughout the conference except for the invited CAC panelists and the MAC hosts. 

Follow up to CMS Abusive MoPath Spending: The Wacky Tier 2 MUE's

 Since 2019, CMS and OIG/DOJ have been releasing intermittent announcements about lab fraud - e.g. "Operation Double Helix."  Since at least 2020, I've been using CMS public databases to looking up the billing patterns of indicted or convicted (or pled guilty) labs, showing that they had medically unbelievable (or medically unfathomable) patterns of genetic test billing.   This past week, CMS released national lab use data for CY2021, and the fraud is higher than ever - based on the same patterns.  The abusive or unbelievable/unfathomable payments are nearly $1 in every $3 for molecular pathology.  Nearly all the payments are in Novitas/FCSO states and go to places with names like "ABC Lab" that rapidly appear and disappear.  See my current deep dive article here.

Generally, these labs have extraordinarily high billing for Tier 2 codes (CPT 81400-81408).  Generally, each patient that shows up gets one or more uses of every single Tier 2 code, which is beyond belief.  These are rare codes - for example, for genes that cause seizures in babies - defined by the AMA as uncommonly used, uncommonly needed genes.

One problem - though this is sort of the tail wagging the dog - are the Medically Unlikely Edits (MUE edits) on Tier 2 codes.  For all the other genetic codes, the MUE is "1."  For MUE codes, they run as high as 5 (!) and for 81408, the $2000 code for a handful of very rare, full sequence complex genes, the MUE is 2.   Nobody would possibly have a personal history and physical and symptom list, that then required 5 uses of unrelated rare disease genes in 81404 and 2 uses of more unrelated ultra rare disease genes in 81408.  Nobody, ever, never ever.  The edits are crazy, and have been unchanged for years despite CMS and OIG knowing that billions in fraud flowing through these exact codes.  You can get 21 Tier 2 codes for one single 95 year old patient in one morning.

A fraudster could go through a nursing home in Miami, get cheek swabs from its 100 patients, and bill for $8682 that would autopay - as least very recently, to say the least - in southern MACs.  That's nearly a million dollars for a few hours work.  Doing no more but having set the MUE's at "1" like other genetic tests, would have save hundreds of millions of dollars with a few minutes' effort.

  

CMS Final Rules for CY2022: OPPS and PFS

 After work hours on November 1, 2022, CMS released the Outpatient (OPPS) and Physician (PFS) final rules.

Home page for upcoming CMS documents at Fed Reg:

https://www.federalregister.gov/agencies/centers-for-medicare-medicaid-services

Find the OPPS final rule (inspection copy) here (1764pp):

https://www.cms.gov/files/document/cy2023-hospital-outpatient-prospective-payment-system-and-ambulatory-surgical-center-final-rule.pdf

Find the PFS final rule (inspection copy) here (3304pp):

https://www.cms.gov/files/document/cy2023-physician-fee-schedule-final-rule-cms-1770f.pdf

Find association materials:

PFS Press Release here.

PFS Fact Sheet on shared savings here and on general topics here.

OPPS Press Release here.

OPPS Fact Sheet here.

###
Final OPPS to appear here 11-23:

https://www.federalregister.gov/public-inspection/2022-23918/medicare-program-hospital-outpatient-prospective-payment-and-ambulatory-surgical-center-payment

Final PFS to appear here 11-18:

https://www.federalregister.gov/public-inspection/2022-23873/medicare-and-medicaid-programs-cy-2023-payment-policies-under-the-physician-fee-schedule-and-other

__

I haven't digested these mountains of rulemaking, but one interesting bit.  In the OPPS system, CMS usually packages or bundles any services represented as an add-on code.  For Software as a Service, CMS will be able to pay add-on codes that are SaaS.  CMS states they will continually review and evolve policy in the software area.

In PFS rulemaking, CMS determines newly this fall that a stool cancer test (FIT or Cologuard) is part of a continuous process with a follow-up colonoscopy, so that, the colonoscopy does not require a copay when triggered by a stool test.  However, CMS declined, at this time, to extend the same logic to LBX tests as the first test.   This makes no sense to me; their own logic applies equally to stool or LBX tests.  To be continued, I’m sure

In PFS rulemaking, CMS had uber-complicated rules for discarded drugs and related manufacturer rebates (it's eye-crossing).   See a JAMA op ed on this change, December 19, Gross et al., here, research data O'Donoghue here.

Very Brief Blog: CMS FInishes 2022 Gapfill Process; Other 2023 prices in November

Here information on Final Gapfill Prices for CY2023, and an update on the wait for Final New Code Prices for CY2023.

CMS released 2022 gapfill process lab prices in May 2022, and released final gapfill pricing around October 5, 2022.   Sorry I missed the event at the time.  

• While there isn't an explicit form or process for "final gapfill appeals," the deadline to register a complaint with CMS staff on the final gapfill prices is November 4, 2022.  
• A few times, in ten years, I have seen those last minute complaints result in a price change.
• The vague regulation about gapfill appeals has the catchy name, 42 CFR 414.509(b)(2)(iv).

See the file on the CMS Lab Fee Schedule public meeting (and files) website.

https://www.cms.gov/medicare/medicare-fee-for-service-payment/clinicallabfeesched/laboratory_public_meetings

Scroll down for the heading GAPFILL and see FINAL 2022 GAPFILL PRICES (zip file).  (These are called Final 2022 Gapfill Prices, because it is a 2022 MAC process, but the prices are for the fee schedule of CY2023).

Four Codes  Wanted Higher Gapfill Prices

Four of 35 gapfilled codes were appealed with additional pricing info.  Responses are from MolDx, which controls the median of the national gapfilling process.   Codes 81560 and 0018M (related to transplants) were lifted from only $263 up to $640.  MolDx writes, "there was a pricing factor not previously considered under the Equitable Pricing Model."   The EPM is the process and internal rules that help MolDx navigate from input data to a final price.   Details of EPM are a business secret of Palmetto MolDx (I have a FOIA record with this response).

Two other codes 0245U (a thyroid molecular test) and 0248U (a cell culture cancer test) were raised less dramatically.  0245U is $1266 up from $1195.  0248U is $3033, up from $2698.  Of note, the company with 0248U had two newer PLA codes in the summer 2022 crosswalk process, and CMS proposed to crosswalk them to around $1000 in September.  In an October 2022 AMA posting the same two codes were posted for deletion from PLA.

We can draw three conclusions from the final Gapfill table:

1. MACs don't play "gotcha."  No prices mysteriously changed or dropped, absent requests or appeals.
2. Few companies submit additional information in the summer, at least from the final spreadsheet, it appears only 4/35 had comments.
3. At least this year all codes requesting up-pricing got some, ranging from a few percent to more than 2X.

New Code Prices 2023

In mid September (a bit late) CMS released some 100 new code proposed price for CY2023.  CMS took public comment til mid October, and CMS will release final prices in mid to late November.   

At that point, a stakeholder can file an appeal, but the result is that the code continues at the 2023 price, and brought back into the next summer's pricing meeting again for a possible new price in 2024.

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Final Gapfill Prices ("Final 2022 for CY2023").  Click to enlarge.

Very Brief Blog: CMS Rules Watch (PFS, OPPS)

The countdown to the annual final rules for hospital outpatient setting (OPPS) and physician fee schedule (PFS) is on.  

Every year, proposed rules are published around July 1 (sometimes til July 15) and take 60 days of public comment.  CMS quickly turns around final rules by November 1, to meet a 60 day deadline prior to their effective date of January 1.

So the most likely publication date for new final rules is October 31, November 1, maybe November 2.   However, these don't add up to 100%, and a rare tardy rule may not appear until mid November.

You can track all CMS rules at Federal Register at the link below.   Newly appearing or "inspection copy" typescript rules, appear at top of this page.   They appear days later as permanent "typeset" rules in the Federal Register.  

Rules usually appear after market close, usually after 4 pm Eastern.

https://www.federalregister.gov/agencies/centers-for-medicare-medicaid-services

Timer from Pixabay.

Very Brief Blog: Myriad's Finance News, MyRisk Update, Behind the Veil at MolDx

Close readers of Myriad's November 1, 2022, financial update may have noted this reference to the MolDx program:

• Molecular Diagnostic Services Program (MolDX®) assigned the MyRisk® hereditary cancer test Current Procedural Terminology (CPT) code 81479 and assigned favorable test specific pricing.
• https://myriad.com/investors/news-releases/news-release-detail/?newsItemId=23411

What DEX Says

Free user registration at the DexCodes database managed by MolDx gives 3 tests with MyRisk in the title, with "no coverage" stated for one, and with local prices (e.g. not a fixed fee schedule price) for two other versions.

• Myriad myRisk Hereditary Cancer Test (Test 10621) is a "48 gene" test with "risk of 11 cancer types."  It's listed as COVERED and locally set price $1743.95.
• Myriad COLARIS Plus + myRisk Update is listed as test 722 and as a germline sequencing and large rearrangement test, COVERED, and locally set price $1299.78.
• Myriad myRisk Hereditary Cancer UPDATE Test.  This is listed as NOT COVERED, so there is no price.
• https://www.dexzcodes.com/

Prices online at DEX may lag the most recently assigned prices by a month or two, so exactly $1743.95 might not be the November 1 price noted by Myriad.

"Favorable" is Relative

The description of "favorable" pricing is mixed, as the myRisk test contains BRCA1-2, for which CMS pays about $1824 under code 81162, more than $1743.  However, another coding would be 81432/33, which is BRCA plus 8 or more other genes, for which CMS pays only around $1100, much less than $1743.   

81479 & PAMA

As I described in my recent analysis of CMS 2021 code & utilization data, here, the Unlisted 81479 MoPath code is the highest paid code in Medicare, at $409M in CY2021 (Part B only).   It accounts for 14% of 2021 MoPath payments, or about 20% of non-abusive 2021 MoPath payments (see blog).  While we have no data on state-by-state (or lab-by-lab) usage in 2021 yet, in 2020, nearly all 81479 payments were via the MolDx system.   Rising levels of 81479 payments means that increasingly, much of the Medicare molecular payment system works separately from the PAMA statutory rate setting system.

Myriad as MYGN

On November 1, share price slipped from about $21 to $17 with the announcement.  The one year range is $16-32, the five year range about $12-$50.  (Genomics labs have been volatile; the one year range of Natera is about $26-$120 and CareDx $15-$51).  

Prostate MAAA Tests

From 2021, the 3 main prostate MAAA tests grew from $56M to $82m (up 42%).  Myriad's test grew more slowly (37%) than Veracyte/Decipher (89%), but faster than Oncotype Prostate (5%).