By Kirell Lakhman
ANAHEIM, Calif. — Last week, as FDA was holding its two-day public meeting about its plan to regulate LDTs, I asked how clinical labs that are suddenly forced to file costly 510(k) or PMA approval submissions can expect a return on what essentially will be an unfunded mandate.
I asked whether there are any steps labs can take to ensure that reimbursement policies keep pace with the expected burden of additional regulatory compliance costs. And after interviewing a dozen stakeholders, including lab managers, industry analysts, and test developers, the answer was 'not much, at least for now.'
This week, during the AACC's annual meeting here, Gail Wilensky, a former chair of the Medicare Payment Advisory Commission and Medicare policy advisor, sketched a grim future for labs that will be required to shell out between $100,000 and $300,000 to clear an erstwhile LDT as a 510(k).
Shaking her head, she said "the probability of CMS changing its reimbursement policy [in response to the regulatory reform] is not high."
Wilensky, who knows something about regulatory and reimbursement issues — she served as deputy assistant to President George H. W. Bush for health and welfare issues and chaired MedPac's Physician Payment Review Commission — urged the clinical lab community to be "proactive" and bring up the subject with legislators and policy makers.
And during FDA's public meeting, Mike Stocum, managing director of the consultancy Personalized Medicine Partners, said CMS should "move toward value-based reimbursement for IVD products that reduce the bias toward an LDT solution."
He also said "one potential solution" is to consider "appropriate reimbursement prior to FDA IVD kit clearance/approval."
This week FDA and CMS got their chance to explain to me what steps the latter might consider taking to off-set the expected additional cost burden the former's proposal might create. That answer, too, turned out to be not much.
Even here they will face an uphill fight, and not least because "there is no link between what FDA does and what CMS decides," in the words of Mary Steele Williams, director of Scientific Programs at the Association for Molecular Pathology.
According to Ellen Griffith, a spokesperson for CMS, "at this point, I don’t think CMS would have anything to say about how what the FDA ultimately decides to do would affect how Medicare pays for those services," in this case reimbursing at a greater level for newly designated IVDs.
"Our payment rates for laboratory tests are generally based on the Clinical Laboratory Fee Schedule, and the payment methodology is determined by statute," she added.
Generally, lab tests are paid under the Clinical Laboratory Fee Schedule, and the method of updating payment rates is set by statute, Griffith told me in an e-mail this week.
She did say she would need "more information … about the FDA's proposal and the types of tests at issue before I could determine whether there is any reason why these tests would not be paid under the [current] fee schedule, and if they are not paid under the fee schedule, how their payment rates [should be] set."