ccla 2015 annual conference challenges for new technologies: physician and payer education and a...

CCLA2015 Annual Conference

Challenges for new technologies: physician and payer education and a view from the PAMA advisory panel

CARL MORRISON, MD, DVMPresident, CSO, Founder OmniSeq

Executive Director Center for Personalized Medicine Director Molecular Pathology Roswell Park Cancer Institute

Buffalo, NY

DISCLOSURE: Funding member with minority equity interest in OmniSeq, LLC.

BACKGROUND:• Solo equine practitioner, Lexington, KY, 1982-94• Molecular pathology director 2002-present• Assistant Professor, Ohio State University, Columbus, OH, 2002-2007• Professor, Roswell Park Cancer Institute, Buffalo, NY, 2007-present• Surgical pathology 2002-2104• Other pertinent

• CAP Molecular Oncology Committee 2006-2102• CMS Advisory Panel on Clinical Diagnostic Laboratory Tests, 2015

COMMENTS:Expertise limited to oncological based molecular pathology.

My comments are my own and not those of RPCI or OmniSeq.

Dr. Morrison will discuss some of the challenges that gapfill creates for

new technologies such as next generation sequencing. A lookback at

failures for gapfill for Tier 1 and 2 codes will provide a landscape of

pitfalls to avoid in gapfilling new technologies such as GSP codes.

How the gapfill process intersects with the PAMA regulations for

market based pricing of new technologies will also be discussed.

State three key points (education objectives) that your presentation will cover. 1. Why gapfill has failed in the past

2. Challenges to improving the gapfill process

3. How gapfill and value based pricing intersect

Description of Duties

In carrying out the activities outlined above, the Panel may consider and advise on the following issues: Calculation of weighted medians of private payor rates for laboratory tests. Phase-in of reductions in Medicare payment rates based on private payor rates, as required. Application of market rates to establishment of Medicare payment rates. Evaluation and designation of tests as advanced diagnostic laboratory tests are defined in

section 1834A of the Act. Whether to use crosswalking or gapfilling to determine payment for a specific new test. The factors used in determining coverage or payment processes for new clinical diagnostic

laboratory tests. The subject matter before the Panel shall be limited to these and related topics. Unrelated topics are not subjects for discussion. Unrelated topics may include, but are not limited to, the following topics referenced in section 1834A of the Act: definition of an applicable laboratory, definition of a data collection period, treatment of discounts, reporting of more than one payment rate for the same payor, certification of data, definition of private payor, use civil money penalties, and generally, Medicare conditions of payments for clinical diagnostic laboratory tests..

CMS Advisory Panel on Clinical Diagnostic Laboratory Tests



section 1834A of the Act. Whether to use crosswalking or gapfilling to determine payment for a specific

new test. The factors used in determining coverage or payment processes for new clinical diagnostic

laboratory tests. The subject matter before the Panel shall be limited to these and related topics. Unrelated topics are not subjects for discussion. Unrelated topics may include, but are not limited to, the following topics referenced in section 1834A of the Act: definition of an applicable laboratory, definition of a data collection period, treatment of discounts, reporting of more than one payment rate for the same payor, certification of data, definition of private payor, use civil money penalties, and generally, Medicare conditions of payments for clinical diagnostic laboratory tests. .




section 1834A of the Act. Whether to use crosswalking or gapfilling to determine payment for a specific new test. The factors used in determining coverage or payment processes for new clinical

diagnostic laboratory tests. The subject matter before the Panel shall be limited to these and related topics. Unrelated topics are not subjects for discussion. Unrelated topics may include, but are not limited to, the following topics referenced in section 1834A of the Act: definition of an applicable laboratory, definition of a data collection period, treatment of discounts, reporting of more than one payment rate for the same payor, certification of data, definition of private payor, use civil money penalties, and generally, Medicare conditions of payments for clinical diagnostic laboratory tests. .


Gapfill is the future.Extraordinary focus on ADLT(s) given the relative number of tests.

What have we learned?

What have we not learned?Gapfill and how it should work.How to manage historical problems, eg, Tier 2 codes and why the CLFS price is $0.00.Pricing and transparency, eg, GSP codes (81445).


1980s

2012

2013

2014

2015

2016

2017

future

42 CFR 414.508 - Payment for a new clinical diagnostic laboratory test.

• Crosswalking• Gapfilling

PAMA

• Market based

• report private payer rate and volume data

Stacked codes

• Technology assessment

Pricing

1980s

2012

2013

2014

2015

2016

2017

future


• Crosswalking• Gapfilling

PAMA

• Market based

• report private payer rate and volume data

Stacked codes


Pricing

Coding1980s

2012

2013

2014

2015

2016

2017

future

MoPath CPT

• Tier 1• Tier 2

Stacked codes


MoPath CPT

• Tier 1• Tier 2• GSP• MAA

MoPath CPT

• Tier 1 – analyte specific, ~100 codes, typically 1 code per 1 gene, but exceptions of several codes for 1 gene or multiple genes for 1 code

• Tier 2 – not analyte specific, 9 codes each with 50-100 genes• GSP• MAAA

MoPath CPT


• Tier 2 – not analyte specific, 9 codes each with 50-100 genes• GSP• MAAA

Xifin pdUnits 6 mo 2015 =1,351,447

Xifin pdUnits 6 mo 2015 =67,111

MoPath CPT


• Tier 2 – not analyte specific, 9 codes each with 50-100 genes• GSP – 21 codes, each multiple genes• MAAA – 12 codes = 12 unique tests

81445 Targeted genomic sequence analysis panel, solid organ neoplasm, DNA analysis, 5-50 genes (eg, ALK, BRAF, CDKN2A, EGFR, ERBB2, KIT, KRAS, NRAS, MET, PDGFRA, PDGFRB, PGR, PIK3CA, PTEN, RET), interrogation for sequence variants and copy number variants or rearrangements, if performed

81455 Targeted genomic sequence analysis panel, solid organ or hematolymphoid neoplasm, DNA and RNA analysis when performed, 51 or greater genes (eg, ALK, BRAF, CDKN2A, CEBPA, DNMT3A, EGFR, ERBB2, EZH2, RLT3, IDH1, IDH2, JAK2, KIT, KRAS, MLL, NPM1, NRAS, MET, NOTCH1, PDGRA, PDGFRB, PGR, PIK3CA, PTEN, RET), interrogation for sequence variants and copy number variants or rearrangements, ifperformed.

Jan Feb March

April May June July Aug Sept Oct Nov DecYear 1

42 CFR 414.508 - Payment for a new clinical diagnostic laboratory test.• Crosswalking

(a) CMS makes available to the public (through CMS's Internet Web site) a list that includes codes for which establishment of a payment amount is being considered for the next calendar year.(b) CMS publishes a FEDERAL REGISTER notice of a meeting to receive public comments and recommendations (and data on which recommendations are based) on the appropriate basis, as specified in §414.508, for establishing payment amounts for the list of codes made available to the public.(c) Not fewer than 30 days after publication of the notice in the FEDERAL REGISTER, CMS convenes a meeting that includes representatives of CMS officials involved in determining payment amounts, to receive public comments and recommendations (and data on which the recommendations are based).(d) Considering the comments and recommendations (and accompanying data) received at the public meeting, CMS develops and makes available to the public (through an Internet Web site and other appropriate mechanisms) a list of—(1) Proposed determinations with respect to the appropriate basis for establishing a payment amount for each code, with an explanation of the reasons for each determination, the data on which the determinations are based, and a request for public written comments within a specified time period on the proposed determination; and(2) Final determinations of the payment amounts for tests, with the rationale for each determination, the data on which the determinations are based, and responses to comments and suggestions from the public.

(a)

(b)

(c) (d)(1) (d)(2)Proposed Final Rule($rate)

Preliminary Final Rule ($rate)

Codes from AMA CPT Editorial Panel

New codes released by CMS

Public comments

Jan Feb March


42 CFR 414.508 - Payment for a new clinical diagnostic laboratory test.• Gapfill

(a) CMS makes available to the public (through CMS's Internet Web site) a list that includes codes for which establishment of a payment amount is being considered for the next calendar year.(b) CMS publishes a FEDERAL REGISTER notice of a meeting to receive public comments and recommendations (and data on which recommendations are based) on the appropriate basis, as specified in §414.508, for establishing payment amounts for the list of codes made available to the public.(c) Not fewer than 30 days after publication of the notice in the FEDERAL REGISTER, CMS convenes a meeting that includes representatives of CMS officials involved in determining payment amounts, to receive public comments and recommendations (and data on which the recommendations are based).(d) Considering the comments and recommendations (and accompanying data) received at the public meeting, CMS develops and makes available to the public (through an Internet Web site and other appropriate mechanisms) a list of—(1) Proposed determinations with respect to the appropriate basis for establishing a payment amount for each code, with an explanation of the reasons for each determination, the data on which the determinations are based, and a request for public written comments within a specified time period on the proposed determination; and(2) Final determinations of the payment amounts for tests, with the rationale for each determination, the data on which the determinations are based, and responses to comments and suggestions from the public.

(a)

(b)

(c) (d)(1)

(d)(2)

$0.00

Prelim $rate

Jan Feb March


Final $rate(d)(2)

Jan Feb March


42 CFR 414.508 - Payment for a new clinical diagnostic laboratory test.• Gapfill - ADLT

(a) (b) (c) (d)(1) (d)(2)List $rateCode from AMA New code

releasedPublic comments

H. R. 4302—18‘‘(5) ADVANCED DIAGNOSTIC LABORATORY TEST DEFINED.—In this subsection, the term ‘advanced diagnostic laboratorytest’ means a clinical diagnostic laboratory test covered underthis part that is offered and furnished only by a single laboratoryand not sold for use by a laboratory other than the originaldeveloping laboratory (or a successor owner) and meets oneof the following criteria:‘‘(A) The test is an analysis of multiple biomarkersof DNA, RNA, or proteins combined with a unique algorithmto yield a single patient-specific result.‘‘(B) The test is cleared or approved by the Food andDrug Administration.‘‘(C) The test meets other similar criteria establishedby the Secretary.

Proposed RuleAdvanced diagnostic laboratory test (ADLT) means a CDLT covered under Medicare Part B that is marketed and performed only by a single laboratory and not sold for use by a laboratory other than the laboratory that designed the test or a successor owner of that laboratory, and meets one of thefollowing criteria:(1) The test—(i) Must be a molecular pathology analysis of multiple biomarkers of deoxyribonucleic acid (DNA), or ribonucleic acid (RNA);(ii) When combined with an empirically derived algorithm, yields a result that predicts the probability a specific individual patient will develop a certain condition(s) or respond to a particular therapy(ies);(iii) Provides new clinical diagnostic information that cannot be obtained from any other test or combination oftests; …the Act recognize special reporting and payment requirements for ADLTs…Section 1834A(d)(1)(A) of the Act requires the payment amount for new ADLTs to be based on actual list chargefor an ‘‘initial period’’ of 3 quarters,

List $rate

CPT InterpretationLimitation of

coverageCommercial

2015Commercial G2

Intelligence 2013 Difference $ Difference %81235 EGFR Tier 1 NSCLC $239 $609 $ (370) ↓ 61%81275 KRAS Tier 1 Colorectal $148 $474 $ (326) ↓ 68%81210 BRAF Tier 1 Melanoma $110 336 $ (226) ↓ 68%

Evidence of the impact of CMS gapfill on commercial payers since 2013.

What is gapfill?The elements that can and should be considered in the gapfill process according to section 42 CFR 414.508 include:

(i) Charges for the test and routine discounts to charges;

(ii) Resources required to perform the test;

(iii) Payment amounts determined by other payers; and

(iv) Charges, payment amounts, and resources required for other tests that may be comparable or otherwise relevant.

Is there any additional guidance on gapfill?

“…the local Medicare Administrative Contractors (MACs) are responsible for determining the appropriate fee schedule amounts in the first year.”


Jan Feb March


42 CFR 414.508 - Payment for a new clinical diagnostic laboratory test.• Gapfill

(a) (b) (c) (d)(1)

(d)(2)

$0.00

Prelim $rate

Code from AMA New code released

Public comments

Jan Feb March


Final $rate(d)(2)

Laboratory Directors

What is gapfill?

Why has gapfill failed for Tier 2 codes when there is evidence to support that are several million units paid by commercial payers on an annual basis?

Why did CMS provide an unrealistic gapfill price for the next generation sequencing code for 81445 when essentially there is no evidence to support that laboratories are using this code?

Why has gapfill failed for Tier 2 codes when there is evidence to support that are several million units paid by commercial payers on an annual basis?

No good current explanation other than a lack of knowledge among laboratory directors as to how the gapfill process should work, given that there are millions of data points from which to extrapolate data prices.

Why did CMS provide an unrealistic gapfill price for the next generation sequencing code for 81445 when essentially there is no evidence to support that laboratories are using this code, ie, in this instance there is essentially little to no data but yet a NLA was established?

Jan Feb March

April May June July Aug Sept Oct Nov Dec2014


(a)

(b)

(c) (d)(1)

(d)(2)

$0.00

NLA $597

Jan Feb March


NLA $597(d)(2)


In 2014, the Palmetto GBA MOLDX contractor issued a local coverage determination, L36143 for 81445 that was applicable to 4 mid-Atlantic states (Palmetto: SC NC VA WV), two central states (CGS: OH KY), and the west coast and mountain states (western Noridian "JE" CA NV HI, and northwestern/mountain Noridian "JF" AK WA OR ID MT ND SD UT AZ).

On September 25, 2015, CMS released final MAC gap-fill prices on the Medicare fee schedule for 81445 based upon the Palmetto MOLDX LCD L36143. The proposed pricing for this code was

$90.00 in the three Cahaba states (AL GA TN) and $597.31 in the four Palmetto states (NC SC VA WV) with a National Limit of $597 based upon the median of the seven states.


(d)(2)

NLA $597

Jan Feb March


NLA $597(d)(2)


NLA proposed for two codes, 81445 and 81450, which appear to have been determined by data from

only two Medicare contractors, which suggests that the gapfill process was not properly or effectively applied, and at the very least, is not in the spirit of what the gapfill process intends, i.e. to determine a fair price based on consideration of an aggregate of data obtained from multiple available sources.

CMS should have recognized that a price of $90 for 81445 is unrealistic and

should have questioned the accuracy of code usage by the laboratory and the validity of the price submitted by that contractor. If those unrealistic prices were dismissed from

consideration, the national limitation would be based on the submission of a single carrier. Accepting the median of a single value, or even two values, as a legitimate national limitation amount is erroneous in two respects, and highlights several shortcomings in the application of the gapfill process.

Comments


(d)(2)

NLA $597

Jan Feb March


NLA $597(d)(2)


Comments

What is gapfill?The elements that can and should be considered in the gapfill process according to section 42 CFR 414.508 include:

(i) Charges for the test and routine discounts to charges;

(ii) Resources required to perform the test;

(iii) Payment amounts determined by other payers; and

(iv) Charges, payment amounts, and resources required for other tests that may be comparable or otherwise relevant.

2014 Annual CLFS Meeting, Baltimore, MD

(ii) Resources required to perform the test

Arron Bossler, MD, PhD, University of Iowa, representing the Economic Affairs Committee, Association MP• 2014 Annual CLFS Meeting, Baltimore, MD• 2015 Annual CLFS Meeting, Baltimore, MD

Presented micro-costing model for multiple GSP codes; 81415, 81430, 81470, 81445, and 81455.

Data collected and organized by Tynan Consulting & Boston Healthcare Associates from 9 different laboratories.

Minimum cost = $751Maximum cost = $2,265

(ii) Resources required to perform the test

(iv) Charges, payment amounts, and resources required for other tests that may be comparable or otherwise relevant

Gene Alteration TypeActionable

Variants CPT code CLFS priceALK translocation Many 88377 $140.15

ALK SNV* 881479

(81235)*** $329.18***BRAF SNV 6 81210 $178.80 EGFR SNV 11 81235 $329.18

ERBB2 SNV, CNV 1 88377 $140.15 KRAS SNV 16 81275 $196.99

METIndel at exon 14,

CNV** Many 88377 $140.15 NRTK1 translocation Many 88377 $140.15 NTRK3 translocation Many 88377 $140.15

RET translocation Many 88377 $140.15 ROS1 translocation Many 88377 $140.15

$1,686.02

*SNV – single nucleotide variant**CNV – copy number variant*** no code - comparable procedure noted


(d)(2)

NLA $597

Jan Feb March


NLA $597(d)(2)


On September 25, 2015, two additional MACs issued a local coverage determination for 81445, open to comment until December 22, 2015.

The first, DL36376 was released by the NGS (National Government Services MAC) for IL-MN-WI and for New York/New England. While limited to lung cancer is much broader in scope and policy than the MOLDX policy

The second LCD DL36446 was released by Cahaba for AL-GA-TN, and is very similar to the MOLDX policy.

Comments

Why did CMS provide an unrealistic gapfill price for the next generation sequencing code for 81445 when essentially there is no evidence to support that laboratories are using this code, ie, in this instance there is essentially little to no data but yet a NLA was established?

????????????????????????????????????????????

How will PAMA impact the current process?

6/30/15 •Final rules on parameters for data collection

Q1, Q2, Q3 2106 •“Applicable laboratories” to report “applicable information” to CMS

01/01/17 •Prices based on weighted median of private market data to become new payment rates.

01/01/18 •Prices based on weighted median of private market data to become new payment rates.

Reimbursement

Coding practices• Single analyte• GSP Codes

Contracting• Contracted• Non-contracted

Coverage• GSP - lung

Preauthorization• Avoid at all

costs

How will PAMA impact the future of reimbursement for 81445 or next generation sequencing?

Highly dependent on whether or not laboratories seek reimbursement for next generation sequencing from commercial payers.

Reimbursement

Coding practices• Single analyte• GSP Codes

Contracting• Contracted• Non-contracted

Coverage• GSP - lung

Preauthorization• Avoid at all

costs

Personal experience with pricing for next generation sequencing from commercial payers is an elaborate crosswalk.

How will PAMA impact the future of reimbursement for 81445 or next generation sequencing?

Highly dependent on whether or not laboratories seek reimbursement for next generation sequencing from commercial payers.

How will PAMA impact the future of reimbursement for 81445?

What is the future of reimbursement for next generation sequencing for the next 2 years?

A few laboratories will gain reimbursement from commercial payers for 81445, not 81455, in 2016 and 2017 with a limitation of coverage restricted to Stage III or IV NSCLC with a reimbursement rate of $1,750 to $3,500.



Very few laboratories will pursue reimbursement from commercial payers for 81445 in 2016 and 2017 with a limitation of coverage for colorectal, breast, pancreatic, or prostate cancer, but will abandon the cause due to the impact on their current negotiated rate for lung cancer, aka, the elaborate crosswalk.



Most laboratories will pursue reimbursement from commercial payers for 81445 using single analyte methodology and collect from $300 to $1,750 depending on the ICD9/10 neoplasm classification.



CMS will honor reconsideration requests for the current NLA for 81445, reverting the entire process back to extended gapfill, which will coincide very closely with PAMA for a net effect of $0.00 for 2016 and likely also for 2017.

Questions?

Thank you for your time and interest today.

ccla 2015 annual conference challenges for new technologies: physician and payer education and a...

Documents

definition of private

application of market

applicable laboratory

designation of tests

gapfilling new technologies

gapfill process

molecular pathology

payment processes