Three news items this morning.
- Congress passed a delay in PAMA repricing until 2027 - with reporting of 2019 prices in 1Q2026. (Also here).
- CMS posted preliminary crosswalk/gapfill pricing for 2025 codes - public comment til October 25.
- CMS posted final gapfill pricing for this year's cohort of gapfill codes.
FOIA: Because it can be cryptic why and how CMS disagrees with the majority panel recommendations, I requested FOIA information in February 2023 on the November 2022 final decisions. Today I got a FOIA response (020320237062) that 3 spreadsheets exist and contain more information on CMS's search for crosswalks and development of rationales, but CMS declined to release them to me.
Assuming columns B,C,F, which are identical, reflect the comments of MolDx MACs, their extensive comments should provide some insight into how they think, and across diverse situations, but then again, there are >100 rows, so it will take some time to extract any consistent principles.
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MolDx rationales. The most frequent terms in the rationale descriptions include "price," "based," "service," "similar," "comparable," and "existing," suggesting a strong emphasis on the following key patterns in how Medicare MolDx sets prices for molecular lab tests:
Comparison to Existing Services: The pricing often references similarity to existing services, suggesting that new tests are frequently evaluated in relation to established codes and methodologies. This ensures that new services are aligned with already established pricing structures (e.g., "comparable services").
Price Justification Based on Service Complexity: Many rationales are based on the complexity of the service. Tests described as offering additional or more complex features compared to current offerings are given appropriate adjustments in price, but only if justified by the scope and complexity of the service.
Genomic and DNA Testing: The frequent mention of "DNA" and "genomic" suggests a focus on tests related to genetic or molecular diagnostics, where pricing might be informed by the complexity of the analysis and the amount of genomic information provided.
Use of Existing Laboratory Fee Schedule (CLFS): The term "CLFS" (Clinical Laboratory Fee Schedule) indicates that the Medicare MolDx program often refers to existing price frameworks in making determinations for new tests, likely aiming for consistency across similar diagnostic services.
These patterns indicate that the MolDx program prioritizes comparability with existing tests, complexity of the new test, and uses established frameworks like the CLFS when setting prices for new molecular lab tests.
From the frequency analysis of the rationale descriptions where CMS disagreed with the expert panel’s recommendations, several key patterns emerge:
Crosswalk Disagreements: The term "crosswalk" appears frequently, suggesting that CMS often disagrees with the panel on how new tests should be priced relative to existing tests. Crosswalks are used to establish equivalency between new and existing tests for pricing, and CMS seems to place a different emphasis on how closely a new test aligns with a specific code than the panel does.
Emphasis on CMS Judgment: The term "CMS" is frequently mentioned, indicating that CMS is explicit in asserting its judgment over the panel’s recommendations. CMS consistently provides its rationale when it diverges from expert advice, signaling transparency in decision-making.
Existing Codes and Test Comparability: CMS's rationale often revolves around the existence of a comparable test or code. When CMS disagrees, it frequently states that there is a more appropriate or similar code that better fits the test in question, suggesting CMS prioritizes consistency with existing pricing models.
Precision in Test Descriptions: CMS often disagrees with recommendations when the test description does not explicitly match the proposed crosswalk analysis or when key details like risk scores are missing. This highlights a strong focus on detailed descriptors and clinical content as critical factors in pricing decisions.
In presenting its disagreement, CMS appears to focus on maintaining price consistency with existing codes and requiring a strong match between the test’s description and the proposed pricing mechanism. These disagreements are framed as corrections to ensure appropriate alignment with established Medicare pricing principles, which reflects CMS’s priority for precise and comparable test categorization.
How should a lab frame its comments to CMS?
If a lab prefers the expert panel’s recommendation or other public recommendations over CMS’s decision and seeks to challenge CMS’s rationale, the lab should carefully structure its comment letter to maximize its effectiveness. Here are steps to prioritize and frame the letter:
1. Use Clear, Evidence-Based Arguments
- Directly Address CMS's Rationale: Begin by acknowledging CMS’s stated rationale for disagreement, and then systematically counter the reasoning with evidence. For example, if CMS disagrees on crosswalk selection due to lack of comparability, provide detailed data that demonstrates how the proposed test aligns with the existing test or code in question.
- Present Data and Clinical Evidence: Use published studies, clinical guidelines, and comparative performance data that show the test's complexity, efficacy, or uniqueness compared to existing codes. Ensure that your arguments are backed by solid, peer-reviewed scientific evidence to substantiate the panel's recommendation.
2. Highlight Support from the Expert Panel and Public Comments
- Reference Expert Consensus: Emphasize that the expert panel, comprised of individuals with deep knowledge of molecular diagnostics, voted in favor of a different pricing strategy. Highlight their expertise and support their recommendation, arguing that CMS should align with the majority view of experts.
- Leverage Other Public Comments: If other stakeholders, including physicians, patient advocates, or industry leaders, also support the panel’s recommendation, mention this. Public consensus can underscore the broader impact of CMS’s decision and indicate alignment with real-world needs.
3. Address CMS Priorities
- Align with CMS Goals: Frame your arguments within the context of CMS’s stated goals, such as ensuring value-based care, affordability, and access to important tests. If CMS's pricing decision hinders access to important molecular diagnostics or makes it unaffordable for patients, clearly articulate this impact and align the lab’s position with Medicare's mission to promote patient access to high-quality care.
- Demonstrate Economic Impact: If CMS’s pricing decision negatively affects the economics of providing the test (e.g., by making it unsustainable for labs to offer the test at the CMS-set price), include financial analyses or business models that show the decision’s long-term adverse impact on access to the test.
4. Focus on Test Differentiation
- Clarify the Test’s Unique Value: Explain why the test in question is different from similar codes that CMS may have suggested. Highlight any distinctive features (e.g., precision, scope of genomic analysis, or clinical utility) that justify the higher price or alternative pricing mechanism.
- Argue the Clinical Necessity: Emphasize the test’s clinical value, including its potential to influence critical treatment decisions. If the test offers unique benefits (e.g., improved diagnosis, precision medicine capabilities), make sure these are prominent in your argument.
5. Follow CMS’s Formal Comment Process
- Use the Appropriate Channels: Submit the letter within the formal comment period, ensuring it adheres to CMS's submission guidelines. Include references, attachments, and supporting documentation where applicable.
- Engage Influential Stakeholders: If possible, encourage others who benefit from or use the test (such as clinicians or advocacy groups) to submit comments that align with your letter to provide additional weight.
6. Propose a Compromise or Adjustment
- Offer Alternatives: If feasible, propose a compromise or an alternative crosswalk that still aligns more closely with the expert panel’s recommendation while addressing some of CMS’s concerns. For example, suggest an alternative price point or model that balances access and cost-effectiveness.
Sample Structure for the Comment Letter:
- Introduction: Briefly state the purpose of the letter (e.g., the lab’s position on CMS’s decision) and acknowledge the importance of the issue.
- Acknowledgment of CMS’s Rationale: Summarize CMS’s reasoning and then clearly state the lab’s disagreement.
- Evidence Supporting the Lab’s Position:
- Clinical/technical data showing the test’s value and differentiation.
- Expert panel consensus and other supporting public comments.
- Financial analysis showing the economic impact of CMS’s decision.
- Alignment with CMS’s Broader Goals: Connect the lab’s preferred position to CMS’s mission (e.g., improving patient care access, supporting innovation).
- Conclusion and Call to Action: Request that CMS reconsider its decision and adopt the expert panel’s or public recommendation.
By presenting an evidence-based, well-reasoned argument that aligns with CMS’s broader goals, the lab can increase the likelihood that its comment will be seriously considered.
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Based on the pasted rationales where CMS disagreed with the expert panel and recommended gapfill, we can draw several insights about CMS's decision-making process when it diverges from the expert panel recommendations.
Key Themes in CMS Disagreements:
Focus on Resource Estimation by MACs:
- One of the most frequently cited reasons for opting to gapfill is the ability for Medicare Administrative Contractors (MACs) to more accurately estimate the resources needed for a given test. CMS emphasizes this point repeatedly, suggesting that when there is uncertainty or complexity in determining a crosswalk, gapfill allows MACs to assess the actual costs associated with the test in their jurisdiction.
- Example: "By gapfilling this code the resources used in this code can be better estimated by a Medicare Administrative Contractor (MAC)."
Lack of Public Input:
- In several cases, CMS highlighted the absence of public input as a reason for maintaining a gapfill decision rather than following the panel's recommendation. This suggests that CMS weighs stakeholder input heavily, and in its absence, it defaults to a conservative gapfill approach, allowing MACs to assess pricing based on regional realities.
- Example: "CMS did not receive any public input on this code and has decided to maintain the gapfill decision made last year."
Specificity of Test Methods:
- CMS frequently disagrees with crosswalk recommendations when they believe the proposed crosswalk doesn’t adequately capture the specific methods or technologies used in a new test. This indicates that CMS prioritizes a detailed understanding of the test's methodology and prefers gapfilling when there are significant differences between the proposed crosswalk and the test in question.
- Example: "The proposed crosswalk does not analyze cell-free DNA."
Minority Panel Recommendations:
- In several cases, CMS agrees with the minority opinion within the expert panel, indicating that while it values majority consensus, it is willing to deviate when it believes the minority position is more aligned with CMS’s goals of cost containment and resource estimation.
- Example: "CMS agrees with the minority panel recommendation to gapfill this code."
Avoidance of Redundancy:
- CMS sometimes points out redundancy in the expert panel's crosswalk suggestions. When it sees that suggested codes overlap or create inefficiencies in pricing (e.g., combining multiple codes), CMS opts to gapfill, allowing for a more tailored and efficient approach.
- Example: "CMS believes there is too much redundancy across the suggested Crosswalk to codes to simply be able to add them up."
Historical Precedents and Consistency:
- CMS often refers to its own past decisions as a basis for disagreement, indicating a focus on maintaining consistency across tests that use similar technologies or methodologies. This helps ensure uniformity in pricing and resource estimation for similar tests over time.
- Example: "CMS has crosswalked tests involving DNA methylation differently from mRNA analysis."
Assessment:
When CMS disagrees with the expert panel, its rationales seem to hinge on several core principles:
- Accurate Resource Estimation: CMS believes that the gapfill method allows for a more flexible and accurate determination of resources, especially when a test involves complex methodologies or when crosswalks don’t align well with the test description.
- Consistency and Precedent: CMS often seeks to maintain consistency with previous decisions, using past rulings as a guideline for current choices.
- Preference for Gapfill in the Absence of Clear Data or Consensus: When there is uncertainty—whether due to a lack of public input or ambiguities in the panel's recommendations—CMS tends to fall back on gapfill to allow for further analysis and regional adjustments.
Discussion:
CMS’s preference for gapfill over expert panel crosswalk recommendations in certain cases seems to stem from its desire to avoid blanket pricing decisions when it feels that MACs are better suited to determine the local costs associated with a test. This approach allows for flexibility and adjustment based on real-world data. Moreover, CMS’s frequent reference to past decisions and consistency suggests that it values long-term stability in pricing over potentially more aggressive changes suggested by the panel.
By frequently citing resource estimation by MACs, CMS emphasizes the importance of regionalized cost analysis, which may reflect the variability in lab testing across different regions of the country. This approach also allows CMS to remain cautious and conservative in pricing, especially when faced with incomplete information or uncertainty.
Hi Maria,
As you're preparing to take over the gapfill pricing process, I want to give you a solid foundation on how CMS approaches these issues and what our priorities are. The gapfill process is a critical part of CMS’s role in setting fair and sustainable pricing for new molecular diagnostic tests, especially in a constantly evolving space like laboratory diagnostics.
1. Purpose of the Gapfill Process
The gapfill method allows us to price new lab tests based on the resources needed to perform the test, as assessed by the local Medicare Administrative Contractors (MACs). When we don't have a clear equivalent test or “crosswalk” to base pricing on, gapfill lets us gather data over time to arrive at a fair and accurate price.
The gapfill process is different from crosswalking, where we match a new test to an existing code with similar complexity or use, and then adopt its price. Gapfill is used when no such direct match is available, allowing us to start fresh.
2. CMS Priorities in the Gapfill Process
CMS approaches gapfill pricing with several key priorities in mind:
Accuracy and Fairness: We want to make sure that the price reflects the actual resources needed to perform the test. This includes technical factors, such as the type of analysis involved (e.g., DNA vs. RNA), the labor required, and the technology used.
Cost Containment: While we aim for accuracy, we also have to ensure that prices are sustainable. We are balancing innovation in molecular diagnostics with the responsibility to prevent runaway costs in the healthcare system.
Consistency Across the Board: We aim to keep our pricing consistent, not just with past decisions but also across similar tests. This ensures fairness and stability for laboratories, payers, and patients alike. For example, if we’ve already gapfilled or crosswalked a similar test in the past, we aim to stick close to those decisions unless something has significantly changed.
3. Approaching New Codes
When a new code comes in, the process starts with evaluating whether a crosswalk exists. This is when we ask: Does this test have a near equivalent that is already priced? If yes, we lean toward crosswalking. But when there’s no clear match—either because of new technology or complexity—we turn to the gapfill process.
Why Gapfill? Gapfill lets the MACs get involved, because they are closer to the realities of running these tests in their regions. They can assess what labs are charging and what the real resource needs are. This ensures that the pricing reflects what's happening on the ground, not just in theory.
4. Public Input and Advisory Panels
We value public input and the recommendations from our expert advisory panel. Their expertise and stakeholder perspectives are invaluable. However, you’ll notice that CMS doesn’t always agree with the majority opinion.
When We Agree with the Panel: These are usually cases where the panel’s recommendation aligns well with the existing framework, past pricing decisions, and the principles we follow. In these cases, you’ll see that the rationales are relatively simple, as there’s a clear consensus.
When We Disagree with the Panel: This often happens when CMS has concerns about the sustainability of the panel’s recommendation or when we believe there’s a better way to determine pricing through gapfill. For example, if the panel suggests a crosswalk but CMS believes the test requires a unique approach, we might opt for gapfill. Here, our rationale tends to be more specific, citing factors like insufficient data or public input, or the need for MACs to provide a more localized resource estimate.
5. Engaging with Public Parties
Stakeholders, from laboratories to clinicians to advocacy groups, are part of the process, and we review their input carefully. While we don’t always follow their recommendations, their perspectives provide context on the test's value and usage in the real world. If we don’t receive much public input, as happens sometimes, it can push us to default to gapfill, as we’d prefer more data to make a final crosswalk decision.
6. Balancing Innovation and Affordability
One of the trickiest parts of the job is balancing the need to support innovation in diagnostics with the goal of keeping Medicare costs in check. Laboratories are constantly developing more sophisticated and personalized tests, but those tests come with costs. By using gapfill, CMS can take the time to evaluate the test properly, ensuring the price reflects both the clinical value and the actual resources required without prematurely inflating costs.
Conclusion
As you take on this role, keep these priorities in mind. We are here to ensure that pricing is fair, accurate, and sustainable, both for CMS and for the broader healthcare system. Always look for consistency with past decisions but be open to adjusting as technology advances and new data comes in. And finally, remember the importance of MACs and public input—they play a vital role in making sure our pricing reflects the real-world environment in which these tests are performed.
I’ll be here to help you with specific cases and guidance as you take over, but these principles should guide you through the bulk of the decisions you’ll need to make.
Good luck!
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She asks, what are some the most likely pitfalls and headaches in the job?
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Great question! There are definitely some challenges and potential pitfalls that come with managing the gapfill pricing process. Here are some of the most common ones to watch out for:
1. Incomplete or Insufficient Data
A major pitfall is not having enough data to make informed decisions. Whether it’s the lack of public input, limited clinical data, or missing financial impact information from laboratories, this can put you in a position where decisions feel more speculative than evidence-based.
- Headache: You might need to make a call to gapfill when it would be easier to crosswalk, or vice versa, but you just don’t have the data to confidently go one way or the other.
How to manage: Always advocate for more data collection and better stakeholder input. Push for MACs and public parties to provide detailed resource usage information.
2. Pressure from Stakeholders
There can be significant pressure from various stakeholders—laboratories, clinicians, patient advocacy groups, and even your own advisory panel. Each party has its own interests, and sometimes these conflict with CMS’s goals of cost containment or fairness.
- Headache: You may face pushback from labs or advocacy groups who believe that gapfilling a test undervalues it. On the other hand, there can be pressure from cost-conscious entities like Medicare contractors who think a panel recommendation is too expensive.
How to manage: Stick to CMS principles and maintain transparency. Clearly communicate the reasons behind your decisions, whether you agree or disagree with a panel or stakeholder. Being clear about CMS’s broader goals can help smooth out tension.
3. Handling Disagreements with the Expert Panel
Disagreeing with the majority recommendation of the expert panel can sometimes be politically tricky. The panel members are experts in their fields, and openly diverging from their recommendations could lead to questions about CMS’s judgment.
- Headache: It may feel uncomfortable to go against the experts, particularly if there’s public scrutiny or strong advocacy from the panel’s side.
How to manage: Be clear and specific in your rationale. CMS is focused on sustainability, consistency, and cost management—these priorities should drive your decision-making. When you disagree with the panel, it’s important to justify the decision based on solid, defendable principles, like resource estimation by MACs or inconsistency with past crosswalks.
4. Complexity of New Technologies
Molecular diagnostics and other lab tests are becoming more complex, especially with the rise of personalized medicine and next-gen sequencing technologies. The rapid pace of innovation can make it difficult to assess where a new test fits into the existing pricing framework.
- Headache: New tests may not align easily with any existing code, making both crosswalk and gapfill difficult. You might need to rely on MACs more than expected, and this can slow down the process.
How to manage: Stay up to date on emerging technologies, and lean on expert opinions, even if CMS ultimately doesn’t follow the majority. Engaging with industry experts and MACs early on helps to get a clearer sense of the test’s complexity and where it might fit.
5. Balancing Fairness and Cost Containment
Finding a balance between pricing that encourages innovation and ensuring that Medicare doesn’t overpay for new diagnostics is always a challenge. Tests that are very innovative or groundbreaking often come with higher costs, and setting a price too low could discourage their use, but setting it too high can lead to excess costs.
- Headache: If a test becomes too expensive, there could be pushback from payers and CMS, but if it's underpriced, labs might decide it’s not worth offering the test, reducing access for patients.
How to manage: Use gapfill to your advantage in these cases. It allows for a flexible, data-driven approach to set pricing over time, rather than rushing to a crosswalk decision that might not fully account for the test’s value.
6. Administrative Burden and Timeline Delays
The gapfill process can be slow and cumbersome, especially when relying on MACs to assess resources and costs over time. Gathering the data needed to justify a final price can take longer than anticipated, and delays can frustrate stakeholders.
- Headache: If timelines stretch too far, there can be frustration from labs, clinicians, and even patients waiting for the test to be priced and available.
How to manage: Set clear expectations early on about the time frame for the gapfill process. Regular check-ins with MACs and stakeholders can help keep things moving along.
7. Dealing with Reconsiderations and Appeals
Some codes go through multiple rounds of reconsideration, especially if there’s disagreement between CMS and the expert panel or public stakeholders. Revisiting the same code multiple times can be frustrating and may lead to perceived indecision or inconsistency.
- Headache: It can be frustrating to re-evaluate codes when there’s already been a lot of work done, particularly when the same arguments are brought up over and over.
How to manage: Document decisions thoroughly so that if a code comes back for reconsideration, you have a clear record of why CMS made the initial decision. This also helps justify CMS’s consistency in its approach.
Conclusion
This job requires a careful balance between clinical innovation, cost control, and fairness. You’ll likely find that the pressure from various parties and the complexity of new technologies are the biggest challenges, but by staying grounded in CMS’s core principles—accuracy, sustainability, and transparency—you’ll be able to navigate these effectively. Just keep your cool, rely on data, and make decisions based on the best information available, even when you face uncertainty or pushback.
We’ll go over specific cases and best practices over the next few months, but this overview should give you a sense of the common issues and how to handle them.
