Molecular Testing in Trouble from Medicare. Who’s on First?

Posted by Judi Space on Tue,Apr 02, 2013 @ 06:00 PM

Only a Bureaucracy as Inefficient and Unwieldy as Medicare Could Create a Mess This Bad and Then Walk Away Whistling, Hands in Pockets

Medicare's decision to stop reimbursing labs for molecular testing threatens both the labs and the patients who badly need these potentially life-saving testsI’m referring to Medicare’s decision to stop paying bills for molecular testing and other diagnostic tests that are transforming the way many life-threatening diseases are being treated.  This is a decision affecting hundreds of labs, including labs performing proprietary tests that target treatments for cancer patients and other serious conditions. To be clear, this is not a decision to permanently stop paying, but to withhold payments until a favorable alternative has been found to the current system of reimbursement.

Could this have come at a worse time, a time at which significant medical and diagnostic gains are being made by molecular testing?

What began as an honest effort to reduce costs has devolved into a quagmire of indecision, with no one taking charge of resolving the mess.  In the meantime, bills from hundreds of labs and health care companies are going unpaid, with no clear resolution in sight. Just how long labs and health care companies will continue to perform these expensive services without being reimbursed is anyone’s guess, but the situation should be causing alarm bell to go off inside Medicare and the Obama administration. 

Here’s How the Medicare Reimbursement System for Molecular Testing Broke Down

First, Medicare, in a much-needed effort to address an abuse-prone billing and reimbursement system, decided to seek an alternative to the billing process known as “code stacking”, a system whereby the costs and reimbursements for diagnostic tests are determined by identifying the codes and associated costs for each step in performing a particular molecular test.  Rather than paying based on the true value of the test, the code stacking system paid for the steps, I.e., the complexity of a test. This of course opened the door to abuse and inconsistency, with some labs identifying and charging for additional steps.

116 New Codes Went Into Effect in 2011, but Medicare Sat Them Out

In order to replace this with a system of paying based on what was being tested form, in 2010 Medicare asked the American Medical Association to create codes for the most critical and common molecular tests. 116 new codes went into effect in 2011, but Medicare decided to wait until 2012 to use the new system, and until then to continue using the old code stacking method until it could set pricing for the new codes.  In the year since, Medicare has done virtually nothing, and (stunningly) has instead decided to have local Medicare carriers assign prices to each of the diagnostic codes! Now, at the last minute, instead of a unified pricing and reimbursement standard, the local Medicare carriers are forced to determine pricing.

Tests Going Unpaid, at Least for Now

As a result, many prices have not been established, and many tests are going unpaid. The market for the development of new tests is being hammered with uncertainty, with many investors sidelined until the pricing issues are resolved. To get by, some contractors are beginning to mirror the pricing charged by the Medicare contractor for California, the only carrier who has managed to set rates. One can question whether a state as large and unique as California should be driving the rates for the US as a whole.  That said, other contractors are not following the California model, and are not getting paid.

On April 30, Medicare contractors are scheduled to submit their 2013 pricing, including their prices for molecular testing. Once this occurs, it is possible that the labs will get paid after the fact. However, this is not guaranteed, and the deadline is not firm.

Is it Fair for Medicare to Delay Payments for Molecular Testing?

One must ask, is it fair for Medicare to refuse to pay for molecular testing simply because they bungled their own deadline for producing a viable reimbursement system? Should the agency be permitted to walk away from the problem by throwing it into the hands of the Medicare contractors, while in the meantime testing labs go unpaid and patients run a growing risk of having to do without potentially life-saving diagnostic testing?

For more information on this timely issue, see the full article that inspired this post on Forbes.


Pennside Partners is a leading pharmaceutical and biotech consulting firm with over 25 years experience. They are headquartered in the United States, the United Kingdom and Switzerland.

Tags: Oncology, Targeted Therapy, Molecular Testing

Will Oncology and Pathology Unite on Molecular Testing?

Posted by Judi Space on Wed,Mar 27, 2013 @ 07:00 PM

For more than a decade, we have been listening to the leaders in cancer research tell us that in order for targeted therapy to work, we must be able to identify who will benefit from it through the use of predictive biomarkers. This is the essence of personalized medicine.

Is molecular testing the key to targeted therapies and a solution to a one-size-fits-all approach?Molecular testing (MT) is becoming the new paradigm for determining an individual cancer patient's course of treatment. Although it is fairly widespread in large academic cancer centers, community hospitals and cancer clinics, where most cancer patients are treated, are often completely out of the loop.

Recently the Association of Community Cancer Centers has sought to better understand the scope of this problem through a survey of its members (1). This survey polled the member institutions' administrators, oncologists, pathologists nurses, and pharmacists (N=52 institutions) about policy, practices, and proceedure related to MT as well as reimbursement issues.

Implementing Molecular Testing: Education of Stakeholders is Key

There are many challenges to the implimentation of MT in the community oncology setting(1).  Chief among them is unwillingness of various stakeholders to work together to make MT a routine proceedure for all newly diagnosed cancer patients. The reality is that testing is already being done on a very limited basis for breast cancer patients (HER2, and ER/PR), but the cancer centers appear to balk at the expansion of similar testing in other cancer indications.(2)

It also represents a great new opportunity to improve the coordination between pathologists and oncologists.

In order to implement MT, The ACCC survey indicated that there should be "champions" that drive the institution toward a coordinated testing program. Most often these champions come from the ranks of the oncologists. They must educate their peers and the institution's administration about the necessity for having a MT policy/proceedure to decide how and when specific tests will be implemented.

Will Oncology & Pathology Come Together Over MT?

Can oncology and pathology unite over molecular testing?The lack of collaboration between pathologists and oncologists is one of the things that's holding molecular testing programs back. Many physicians can't seem to agree on whether MT is necessary, and when. Some don't see the value in personalized medicine, while cancer center administrators see it as simply a line in the budget and are unwilling to spend the time and money in an environment of competing interests.

However, there is safety in numbers. By uniting on the molecular testing issue, oncologists and pathologists will have a greater chance of convincing administrators its necessity.

Is Molecular Testing Costly or Cost Effective?

One of the drawbacks to molecular testing programs is the cost of testing. The decision for doing MT may lie with the payer, rather than the patient's specific needs.  Each assay can run as much as $7,000, which can make insurance companies unwilling to cover the cost in many cases.

However, most oncologists and pathologists agree that molecular testing can actually save money in the long run. The detailed, personal information that it provides can guide an otherwise uncertain treatment plan. A negative test result can save a lot of money on expensive, targeted therapies.

In order for progress to take place, continuing education is essential. This is true of both the medical oncologists and the pathologists. In the rapidly evolving world of cancer drug development, new molecular tests will emerge on a regular basis which will help choose new options for treatment where there were none before.  Pathologists and oncologists must work together to use the test results to guide treatment by identifying who will benefit from specific targeted therapy regimens. 

References

(1)http://accc-cancer.org/education/molecularTesting-Overview.asp

(2) http://obroncology.com/obrgreen/article/Molecular-Testing-Preparing-for-the-New-Normal-in-Community-Oncology


Pennside Partners is a leading pharmaceutical and biotech consulting firm with over 25 years experience. They are headquartered in the United States, the United Kingdom and Switzerland.

Tags: Oncology, Predictive Biomarkers, Targeted Therapy, Drug Development, Molecular Testing, Personalized Medicine

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