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Reimbursement Trends: 5 More New Molecular Tests Get the Medicare Green Light from Palmetto

by | Jun 14, 2017 | Enforcement-nir, Essential, National Lab Reporter, News-nir, Reimbursement-nir

Normally among the slowest payors to accept promising but unproven new tests, Medicare continues to loosen the reins for molecular assays. In May, Palmetto GBA (Columbia, SC), one of Medicare’s most important contractors, issued favorable— albeit limited—draft local coverage determinations (LCDs) for five significant new molecular tests. Here are the details you need to be aware of. 1. Limited Coverage of Liquid Biopsy Test for Advanced Lung Cancer Test: Guardant360, Guardant Health’s comprehensive liquid biopsy assay for lung cancer. Proposed Coverage: Guardant360, which came onto the market in 2014 and is now widely ordered, would be covered only for patients with advanced non-small cell lung cancer, that is, stage IIIB or higher. Conditions would vary depending on treatment stage: Medicare Coverage Conditions of Guardant360 for Advanced Lung Cancer Diagnosis Stage Progression Stage Condition 1: Patient not genomically tested for: • EGFR alterations • ALK and ROSI rearrangements, or • PD-L1expression Condition 2: Patient must be ineligible for tissue-based testing because either: • Biopsy tissue is insufficient or • Biopsy not possible for medical reasons Condition 1: Patient not genomically tested for targets in question Condition 2: Tissue-based testing is medically infeasible Coverage also provided for patients progressing on an EGFR tyrosine kinase inhibitor regardless of […]

Normally among the slowest payors to accept promising but unproven new tests, Medicare continues to loosen the reins for molecular assays. In May, Palmetto GBA (Columbia, SC), one of Medicare's most important contractors, issued favorable— albeit limited—draft local coverage determinations (LCDs) for five significant new molecular tests. Here are the details you need to be aware of.

1. Limited Coverage of Liquid Biopsy Test for Advanced Lung Cancer
Test: Guardant360, Guardant Health's comprehensive liquid biopsy assay for lung cancer.

Proposed Coverage: Guardant360, which came onto the market in 2014 and is now widely ordered, would be covered only for patients with advanced non-small cell lung cancer, that is, stage IIIB or higher. Conditions would vary depending on treatment stage:

Medicare Coverage Conditions of Guardant360 for Advanced Lung Cancer

Diagnosis StageProgression Stage

Condition 1: Patient not genomically tested for: • EGFR alterations • ALK and ROSI rearrangements, or • PD-L1expression

Condition 2: Patient must be ineligible for tissue-based testing because either: • Biopsy tissue is insufficient or • Biopsy not possible for medical reasons

Condition 1: Patient not genomically tested for targets in question

Condition 2: Tissue-based testing is medically infeasible

Coverage also provided for patients progressing on an EGFR tyrosine kinase inhibitor regardless of genetic testing history

The draft LCD would not cover use of Guardant360 for:

  • Repeat testing for therapeutic monitoring; or
  • Assessing germline variants.

Context: The new Guardant360 LCD comes less than three months after Palmetto's approval of the molecular blood test Xpresys XL2 for limited lung cancer screening, namely:

  • To assess lung nodules of between 8 and 30 mm in diameter; and
  • For patients over age 40 who have a pre-test cancer risk of 50 percent or less.

In June 2016, Palmetto outlined its coverage criteria for assessing the analytical performance of liquid biopsy tests to detect genetic variants in tumors. (See NIR, June 30, 2016.)

2. Expanded Coverage of Molecular Prostate Cancer Screening Assay
Test: Oncotype DX® Genomic Prostate Score™ (GPS) from Genomic Health, Inc., a test for assessing the current state and future risk of prostate cancer.

Proposed Coverage: GPS, which is currently covered for clinically-low risk men, would also be covered for patients with favorable intermediate- risk prostate cancer under National Comprehensive Cancer Network (NCCN) guidelines. This would expand the number of Medicare beneficiaries from 50,000 to 80,000.

Context: In January 2017, Palmetto approved the competing drug, Myriad's Prolaris, which measures the aggressiveness of prostate cancer by analyzing 31 cell cycle progression genes, for men with favorable intermediate risk of prostate cancer under NCCN criteria. (See, LIR Jan. 6, 2017).

3. Limited Coverage of Test Helping Breast Cancer Patients Avoid Chemotherapy
Test: Myriad Genetics' EndoPredict test, which uses a 12-gene molecular assessment score combined with tumor size, nodal status and other pathological features to determine if it is medically safe for clinically low-risk breast cancer patients to skip chemo.

Proposed Coverage: EndoPredict would be covered only for postmenopausal women diagnosed with early-stage estrogen-receptor (ER) positive, HER2-negative breast cancer who are either:

  • Lymph node-negative; or
  • Who have up to three positive nodes and are being considered for treatment with adjuvant endocrine therapy.

Context: There are two other breast cancer prediction molecular assays on the market that have received favorable Medicare coverage determinations from Noridian:

  • Oncotype DX Breast from Genomic Health, Inc.; and
  • Prosigna from Nanostring Technologies.

4. Limited Coverage of Sequencing Test for Kidney Transplant Rejection Risks
Test: AlloSure, targeted next-generation sequencing test from CareDx that quantifies donor-derived cell-free DNA in kidney transplant recipients.

Proposed Coverage: LCD would cover use of AlloSure only for measuring the probability of allograft rejection in kidney transplant recipients for whom there is a clinical suspicion of rejection at least two weeks post-transplant. Other limitations:

  • Patients must be over 18; and
  • Before ordering, physicians must assess patients for probability of active renal allograft rejection.

Context: CareDx claims that AlloSure is the only non-invasive test that uses donor derived cell-free DNA as a biomarker to identify probability of active rejection and directly measure allograft injury.

5. Coverage of Nucleic Acid GI Pathogen Tests
Test: Another draft LCD proposes coverage of molecular tests that use nucleic acid amplification to detect gastrointestinal pathogens.

Proposed Coverage: Coverage is limited to tests identifying up to five bacterial targets that Palmetto claims account for 90-95 percent of all foodborne infections: i. Salmonella; ii. Shiga toxin-producing E. coli; iii. Shigella; iv. Cryptosporidium; and v. Campylobacter. Coverage would not include:

  • Testingor viruses due to the lack of virus-specific therapies that viral test results would inform;
  • Epidemiologic testing by national, state or local agencies; or
  • Testing to confirm another test result.

In addition, GIP test panels cannot be unbundled and billed as individual components. Exception: Where C. difficile is not included in a panel, testing for it "may be reasonable and necessary when ordered additionally," as long as documentation in the medical record supports reasonableness and necessary.

Context: As Palmetto notes, at least five different companies produce FDA-approved GI pathogen assays that meet or exceed the LCD's five-target limit:

GI Pathogen Assays Covered by New Palmetto LCD

CompanyProgression Stage
BD DiagnosticsBD MAX Enteric Bacterial Panel
Biofire DiagnosticsFilmArray GI Panel
HologicProGastro SSCS
LuminexxTAG Gastroenterology Panel
NanosphereVerigene Enteric Pathogens

Takeaway: Although these are positive developments for the molecular diagnostics community, the pace of Medicare coverage remains piecemeal and frustratingly slow. Although influential, Palmetto is only one of several key Medicare contractors. Moreover, the spate of favorable LCDs belies the fact that a number of other commercially popular molecular tests failed to make the cut.

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