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April 28, 2014

Payers Wrestle with Reimbursement

Healthcare coverage for genomic tests in the clinic is at issue.

Payers Wrestle with Reimbursement

Medicare administrative contractors cut 2014 reimbursement rates for many molecular tests on average by 25% to 35%. [© vichie81 - Fotolia.com]

  • How private and public payers reimburse for tests is arguably the steepest hurdle to adoption of genomics by clinical practices. Yet reimbursement policies are unlikely to move beyond quick fixes soon, while regulators, test developers, providers and payers wrestle with three questions: Who pays? How much? And what tests are reimbursable?

    “Genomics is only going to achieve its full potential to improve health when the advantage from genomics becomes accessible to all, and healthcare coverage is a vital component of that,” Derek T. Scholes, Ph.D., chief of the Policy and Program Analysis Branch at NIH’s National Human Genomic Research Institute (NHGRI), explained.

    Of immediate concern to professionals is restoring cuts averaging 25% to 35% in 2014 reimbursement rates for many molecular tests approved by the Center for Medicare and Medicaid Services (CMS) last year. CMS allowed first-year rates for 114 new Current Procedural Terminology (CPT®) codes to be set by Medicare administrative contractors (MACs).

    Those rates were mostly lower than the former technology-based “stacking” CPT codes, as MACs and many private insurers deemed many tests unneeded or overpriced. EGRF mutation analysis (CPT code 81235) plunged 76% from $563 to $123.

    “The reimbursement decisions that have been made over the last year that relate with the new CPT codes for molecular diagnostics are an absolute total mess and a disaster,” Michael S. Watson, Ph.D., FACMG, executive director of the American College of Medical Genetics and Genomics, told GEN.

    ACMG, the American Medical Association (which developed CPT), and other groups say the rates will force labs and training programs to close or lay off staff, as reported anecdotally last year. “For many, many things in genetics, CMS hasn’t paid for anything since January of 2013. I know very big labs that have billed $1 million to Medicare and been paid $60,000 in total,” Dr. Watson said.

    CMS sliced reimbursement for CPT code 81211, covering Myriad Genetics’ complete BRCA1 and BRCA2 gene sequence analysis for susceptibility to breast and ovarian cancer, by nearly half to $1,438.14, before revising its rate April 1 to $2,184. When combined with an analysis of uncommon duplication/deletion variants (CPT 81213), reimbursement for integrated BRAC Analysis will be $2,767.

    Those rates will remain through calendar-year 2017—except for some across-the-board cuts such as last year’s sequestration—thanks to the new Protecting Access to Medicare Act, enacted April 1. It bars CMS from reanalyzing codes annually for technology changes.

    “This is an important consideration because it gives us pricing stability and visibility on our current Medicare reimbursement rates for a three-year timeframe,” Myriad spokesman Ron Rogers told GEN.

    That stability will extend, he added, to Myriad tests that include Vectra® DA, a 12-protein blood test for rheumatoid arthritis activity with a current Medicare reimbursement of $575; Colaris® (risks for colorectal cancer in men and women; uterine cancer in women), now reimbursed at $2,612; and Prolaris® (46-gene RNA expression test for tumor growth prostate cancer), for which a reimbursement decision is expected later this year.

    On its website, CMS blamed its initial 2014 rate for CPT 81211 on a low range of test prices ($995 to $2,800) first submitted by MACs. The agency revised its rates after three MACs later reported a range of $2,000 to $2,500.

    As reimbursement policies emerge, payers must look past the hype of clinical genomics and answer some blunt questions about how test costs compare with benefits, according to Michael L. Millenson, president of Health Quality Advisors, and Mervin Shalowitz, M.D., visiting scholar at Northwestern University’s Kellogg School of Management.

    “Because it’s part of mainstream medicine, it should be held to the same standards as mainstream medicine,” Millenson told GEN. “What you have a lot of in the clinical genomics world is belief in place of evidence.”

  • Bringing Genomics Data to the Clinic

    In a 2011 paper published by the Urban Institute, Millenson said moving clinical genomics beyond the hype meant in part bringing clinicians up to speed on genomics due to lack of data or scattering of data across multiple sources.

    NHGRI’s Implementing Genomics in Practice (IGNITE) consortium supports developing methods for incorporating genomic data into clinical care, while its Electronic Medical Records and Genomics (eMERGE) Network has funded pilot studies that include an economic analysis of treating hepatitis C virus genotypes 2 or 3 patients with interleukin 28B. A team led by Jonathan A. Bock of Geisinger Health System found last year that short-term costs ranged from $21,648.92 to $47,972.84—higher than current standard of care ($20,758.92), but about $1,833 less in long-term costs.

    Last fall, two NIH institutes awarded a total $25 million over four years to develop the Clinical Genomics Resource (ClinGen). NHGRI and the Eunice Kennedy Shriver National Institute of Child Health and Human Development (NICHD) are funding three research groups that will develop and curate information on the millions of genomic variants relevant to human disease—including those expected to be clinically useful.

    One group is using computational and informatics tools to determine which genomic variants have strong evidence for association with disease risk. A second is defining categories of clinical relevance for variants, while a third has formed the International Collaboration for Clinical Genomics (ICCG) to foster efforts at developing standard formats for gathering and depositing data into the U.S. National Center for Biotechnology Information’s ClinVar website. As of April 3, ClinVar recorded data on 18,714 genes with 99,113 variations, within 110,768 submissions from 126 entities.

    ClinGen’s initial focus is on “high-impact” genes important to diseases, with a particular treatment available. The first working groups have focused on cardiovascular diseases, germline cancer, and metabolic diseases. “The goal is to first focus on the genes that are known to cause Mendelian diseases because it’s easier to go after those, but then expand the focus and think about the genes that are impacting the more common complex conditions,” Erin N. Ramos, Ph.D., MPH, program director for NHGRI’s Division of Genomic Medicine, told GEN.

    Through these and other efforts, Dr. Scholes expects clinicians and other professionals will grow their knowledge of genomics and start applying it: “You’re going to see the expansion of one or two clinical applications of genomics. But the full integration of genomics into the clinic is going to be a decade-long project.”

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