During the first quarter of 2013 all eyes have been focused on early coverage and pricing decisions for molecular tests during the gap-filling transition to the new molecular pathology (MoPath) Current Procedural Terminology (CPT) codes. Like most molecular tests, tests utilizing next-generation sequencing (NGS) technology face challenges in establishing positive reimbursement decisions from payers and […]
During the first quarter of 2013 all eyes have been focused on early coverage and pricing decisions for molecular tests during the gap-filling transition to the new molecular pathology (MoPath) Current Procedural Terminology (CPT) codes. Like most molecular tests, tests utilizing next-generation sequencing (NGS) technology face challenges in establishing positive reimbursement decisions from payers and proving clinical utility. But NGS-based tests face an even greater battle for reimbursement since testing volumes remain low and the technology does not yet have dedicated CPT codes, making the desired test transparency virtually impossible.The new MoPath codes are intended to bring greater transparency to laboratory coding for tests and allow payers to better track test utilization. But standardized evidence thresholds to prove clinical utility remain elusive, and test developers must pursue coverage and reimbursement conversations with each payer individually. “There is a great deal of uncertainty when it comes to reimbursement in part because of the deficit in education in molecular testing as a whole,” says Jerry Conway, vice president of reimbursement and payer strategy for Foundation Medicine (Cambridge, Mass.). “As the system of payment evolves to accommodate other molecular technologies that have been on the market longer and drive higher volumes of testing, NGS tends to be back-burnered.” With the vast amounts of resources being dedicated to the transition to MoPath CPT codes in 2013, many fear that establishing reimbursement for NGS-based tests, may get pushed back even further in the queue. “The CPT system is just not structured to incorporate innovation as fast as it occurs,” Conway tells DTTR. “But in sharp contrast [to the reimbursement system] is the rapid migration of NGS to the clinic. Providers see the promise of being able to analyze enormous amounts of DNA data and to distill it down to actionable information.” The Promise of Next-Gen Technically NGS is capable of generating much more information than traditional molecular diagnostic assays at greater speed and volume. The research community is adopting NGS for complex genomic analyses, and NGS-based testing is emerging in clinical practice for applications such as pediatric inherited disorders and somatic mutation panels for treatment selection in oncology cases. As the number of known mutations of clinical significance increases, so too is the case that NGS is becoming the most cost-effective means for assessing all of these variants. “We can anticipate for the foreseeable future that the current NGS paradigm will continue to evolve with improvements in performance, accuracy, and instrumentation options that will further facilitate clinical translation,” writes the Whole Genome Analysis Working Group of the Association for Molecular Pathology (AMP) in a report published in the November 2012 issue of the Journal of Molecular Diagnostics. “The balance of time and effort required for NGS-based research or diagnostics is substantially shifted toward data analysis, as opposed to the technical component required to generate the data.” Most acknowledge, though, that sequencing technology has currently advanced beyond clinicians’ ability to meaningfully apply all of the data generated. “There is a disconnect. Technology vendors rolling out tests are ahead of physician adoption and professional societies,” says Amanda Murphy, an analyst at William Blair & Co. “There are some personalized medicine cancer panels that are well established and it may be cheaper or the same price to look at 20 variants than one in Sanger, so it may be reasonable for sequencing technology to evolve, but whole-genome is way far away. NGS is really in the very early stages.” There is much talk of the rapidly declining cost of genome sequencing. Falloff in production associated-costs are imperative for NGS-based tests to be priced in such a way to make clinical value possible and to generate the large amounts of quality DNA sequence data needed in public databases to find meaningful phenotypic associations. But costs associated with nonproduction activities, including the data analysis downstream of initial data processing, are not factored into the free-falling price models and need to be addressed to make whole-genome or whole-exome sequencing clinically feasible. Lessons Learned From Noninvasive Prenatal Testing Some clinicians have expressed interest in early NGS tests, but test adoption is too nascent to see trendlike behavior on the part of payers, with the exception of in noninvasive prenatal testing (NIPT), where a flurry of coverage activity is beginning to emerge from behind closed-door conversations. Most of the nations’ top health insurance companies including United Healthcare, Aetna, and Wellpoint have announced positive coverage decisions for NIPT using circulating cell-free fetal DNA in maternal plasma. Blue Cross Blue Shield became the first carrier to announce positive coverage not just in high-risk women. “We started to see positive coverage decisions really starting in December,” says Brian Weinstein, an analyst at William Blair & Co. who covers Sequenom. “All that means is that they see the test as medically necessary and will cover it for their members. However, they did not state a price point, so now it is incumbent on the labs running these tests to negotiate plan by plan.” All of the players in the space are in negotiations for pricing and contracting and “some clarity” should emerge in the next couple months, Weinstein says. “From my perspective things are going quite well with reimbursement overall for NIPT. It is a stepwise process with positive coverage happening nearly universally with national payers and moving forwards with regional players,” says Ken Song, M.D., CEO of Ariosa Diagnostics (San Jose, Calif.), which makes the Harmony Prenatal Test to detect trisomies 13, 18, and 21. “This is a tremendous step forward, especially because the technology has really just introduced in the market for one year.” Song tells DTTR that adoption of NIPT tests has been rapid with an annualized rate of 250,000 tests expected to be run this year, across NIPT companies. Both Quest Diagnostics and LabCorp announced in February that they will be offering different companies’ versions of NIPT tests. Will Other NGS Tests Follow? In addition to NIPT, payers are covering some multigene sequencing panels, more often performed with Sanger or microarray-based sequencing. As the technology transitions to NGS, for reasons of cost and complexity of data analysis, these targeted testing approaches are likely to lead both in adoption and in receiving reimbursement. “There are some lessons learned from NIPT,” explains Song. “First, the clinical value proposition is very clear. NIPT is improving upon something done today. With so many companies’ genetic or sequencing tests they think have such great clinical value, but it is not part of the current standard of care or physician workflow. . . . Secondly we have [collectively] generated a tremendous amount of study data, with 6,000 patients alone in our lab. Having value, improving upon the existing market, and a ton of clinical data is a recipe for success.” But outside of NIPT, Murphy says NGS volumes are low, and given the existing coding structure, even when tests are being performed, they are still flying under the radar of payers. “In cancer, as in other disease states, payers understand some of the issues that are surfacing as molecular testing is performed on a marker-by-marker basis and recognize the importance of transitioning to NGS testing over time,” explains Conway. “It is therefore critical that NGS providers obtain sufficient funding in order to drive the development of adequate evidence through well-designed clinical trials, publications in peer-reviewed journals, and advocacy for inclusion in guidelines. . . . We have to generate the data to support the payers’ decisionmaking process.” As for Foundation Medicines’ comprehensive genomic analysis for cancer care, the company says that it is hard to determine what the impact of the MoPath CPT changes will be this year, but it is steadfast in its belief that the entire molecular diagnostics industry must continue to “take steps to build the case for a value-based approach to reimbursement.” NGS claims starting in January 2013 will need to use the new MoPath Tier 1, Tier 2, and/or miscellaneous (81479) codes. Conway emphasizes there could be 10 different ways to build a spreadsheet using a combination of Tier 1 and Tier 2 codes, and different payers may want claims delivered in unique ways. The AMP says that “it is close” to finalizing a framework proposal for CPT coding for NGS assays that it will then submit to the American Medical Association in the hopes of obtaining NGS-specific CPT codes. To obtain a CPT code, test developers must have demonstrated clinical utility. Also complicating efforts to obtain NGS CPT codes is the issue of interpretation of test results, which some argue should be billed on the physician fee schedule with a component for professional services, which laboratory Ph.D. genetic experts are not eligible for.
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