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In Information-Gathering Mode, CMS Undecided on Payment Structure for Genetic Tests

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Originally published July 19.

By Turna Ray

A new payment policy
for molecular diagnostics that do not fit neatly into the existing clinical laboratory fee schedule will go into effect in 2013 at the earliest, the Centers for Medicare & Medicaid Services told the diagnostics community this week at an informational hearing to discuss reimbursement for genetic tests.

"We have a public process for how codes are priced under the laboratory fee schedule, and under that process, if the code was discussed at this morning's meeting for 2012, then it can be on the laboratory fee schedule," a member of the CMS panel said during the meeting held Monday in Baltimore. "Since all of these genetic tests were not [discussed] at the public meeting, they cannot be priced under the laboratory fee schedule for 2012."

Following its annual meeting on Monday morning to discuss payment levels for new current procedural terminology codes that will be added to the Medicare clinical laboratory fee schedule in 2012, CMS convened a separate hearing in the afternoon to discuss the American Medical Association's new molecular pathology testing codes for genetic tests. So, far the Molecular Pathology Workgroup of the AMA's CPT Editorial Panel has proposed a two-tier model: Tier 1 would comprise analyte-specific codes for commonly performed tests and Tier 2 would be resource-level codes for less common tests (PGx Reporter 03/16/2011).

Under the current model, CMS pays for tests under either the physician fee schedule (generally addressing tests that fall in the surgical pathology, hematopathology, or cytopathology services category) or the clinical lab fee schedule (categorizing tests performed in a clinical lab that don't require physician interpretation). At CMS' meeting this week, stakeholders representing the diagnostics community debated whether CMS could still use this system to reimburse for the increasingly complex interpretive services provided by physicians and PhD laboratory experts for molecular diagnostics.

"We're hearing that there are many services that can potentially be priced under the laboratory fee schedule, there are services that could potentially be priced under the PFS, and then there are potential options for not pricing any of these services at all nationally for 2012, waiting for 2013," a CMS spokesperson reflected. "So, there is a whole variety of options … Any decision about what happens next is to be determined."

For the time being, industry analysts feel that most laboratory-developed genetic tests, such as Myriad Genetics' BRACAnalysis, will be able to maintain current reimbursement levels under CLFS. But going forward, as CMS figures out its payment policy for genetic tests, it is unknown how molecular diagnostic pricing will be affected depending on whether these tests fall in the PFS or the CLFS (PGx Reporter 06/22/2011).

The general takeaway from this week's CMS meeting is that any proposed Tier 1 and Tier 2 codes that CMS determines to be under CLFS will be discussed at next year's payment meeting and will be on the agency's payment schedule for 2013. Agency officials stressed, however, that CMS hasn't yet made a determination as to which tests fall into the PFS and CLFS categories, or whether an entirely new system needs to be developed that melds features of the two schedules to address the unique issues raised by complex genetic tests.

For example, several presenters pointed out that multi-analyte, algorithm-based tests, so called in vitro diagnostic multivariate index assays, represent a growing segment of the molecular diagnostics market. For these services, any interpretive work by a pathologist or a laboratory expert is computer assisted. As such, CMS will need to figure out how to reimburse for these types of tests in any new payment framework.

The AMA has yet to tackle coding for IVDMIAs, but is planning to host a meeting on this topic in Chicago on July 20.

Recognizing that emerging technological advances in molecular diagnostics will require new payment strategies that capture the value these tests provide to patient care, Paul Radensky of law firm McDermott Will & Emery, who represents the Coalition for 21st Century Medicine, noted that "trying to convince everyone at CMS that everything has to fall under the PFS or that nothing should fall under the PFS would make no sense."

David Mongillo, VP for policy and medical affairs at the American Clinical Laboratory Association, suggested that CMS gather stakeholder input on each Tier 1 and Tier 2 code in order to determine whether the interpretive services required for a specific test are performed by a pathologist, a lab expert, or a computer system. "Molecular tests have characteristics and operational elements that bridge both fee schedules," Mongillo noted.

ACLA recently conducted a survey to assess what proportion of the interpretive services for tests described by AMA's 180 Tier 1 and Tier 2 codes were provided by its lab members, which were provided by pathologists, and which relied on automated interpretation of test results. ACLA members provided information in the survey about tests that are addressed by approximately 167 of those codes. For those tests performed by ACLA constituents, 99 percent of the "technical component" was provided by lab technicians; 100 percent of the time a separate interpretation was performed; 90 percent of the time that additional interpretation was performed by a PhD, 10 percent of the results were analyzed by a pathologist, and 1 percent of the test results required computer assistance for interpretation. (Note: According to ACLA, the percentages don't add up to 100 percent due to rounding).

In ACLA's view, after CMS reviews each Tier 1 and Tier 2 code, if the interpretation for a test is performed mainly by a non-physician lab professional, then the code for that test should be placed under CLFS. Mongillo has previously told PGx Reporter however, that the actual schedule placement may not be as important as how CMS accounts for the work involved in performing the test. "CMS should either develop a new CLFS code that will allow these non-physician health professionals to bill for the interpretive function or continue the CPT code 83912, but fully recognize the value of the service being provided," Mongillo said at the meeting.

Currently, the CPT code 83912 can be used by physicians under the PFS or by lab experts under CLFS to bill CMS for interpretive services they perform for a test. However, under this coding system, several presenters pointed out, there is a single level of payment regardless of whether the test requires a significant amount of interpretation or a minimal amount.

Other presenters argued for placing all of AMA's proposed Tier 1 and Tier 2 genetic testing codes under PFS, with adjustments to the existing framework to address the interpretive work provided by lab technicians. One speaker suggested that laboratory analytical services can be accounted for by billing for the test under PFS, and adding a CLFS interpretation code such as 83912 that non-physicians can use or adding legislative or regulatory language to allow non-MDs to use PFS codes as qualified health practitioners.

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Jeffrey Kant, previous president of the Association of Molecular Pathology and currently chair of the organization's economic affairs committee, also felt that codes in both tiers should be paid through PFS to ensure continued adoption of molecular diagnostics by the pathologist community. Noting that pathologists are increasingly gaining knowledge of molecular diagnostics, Kant said that "if there is no payment for professional involvement in this area, the reality is that it's really going to kill pathologist participation.

"The problem for CMS in that is that you're not going to have the physician service delivery and consultative participation with other physicians that's associated with this testing as it develops," he noted. "Clinicians routinely don't understand these assays or their application very well, [and] for that reason, AMP recommends that the Tier 1 and Tier 2 codes be placed on the PFS to recognize the professional work by both physicians and non-physician lab professionals associated with this."

Others, like Elaine Jeter, medical director for Medicare contractor Palmetto GBA, pointed out, that placing all the genetic testing codes under the PFS would necessitate that labs bill patients for their copay, which falls under that schedule. "It's going to be a nightmare for the laboratories" to gather the necessary billing data, and "deal with the copay," she said, extending her support for a solution similar to ACLA's that would keep payment for laboratory-developed genetic tests under CLFS, but would allow lab techs to bill CMS for the professional interpretation related to the tests under PFS.

Furthermore, Jeter urged CMS to hold off for a few years on implementing a payment scheme for genetic tests using the new Tier 1/Tier 2 codes, noting that CMS contractors have an "astronomical" task before them in crosswalking genetic tests from existing stacked CPT codes to the new codes developed by AMA. The term "crosswalking" describes CMS' method for determining that a new test is similar to an existing test in terms of its measured analytes or methodology, thereby assigning the new test the same payment level as the old test.

Anne-Marie Lynch, AdvaMed's executive VP for payment and healthcare delivery policy, suggested CMS conduct a study of the tests that are described by AMA's Tier 1 and Tier 2 codes. "Laboratories may use different methods, reflecting alternative clinical approaches and the specific genes that are examined," she said. "Other factors such as the level of automation are also important factors to consider."

CMS is currently taking a step in this direction. The agency is searching for a knowledgeable contractor to help it gather information and conduct such in-depth analysis of the molecular diagnostics field.

In a solicitation published last month, CMS announced it was looking to "procure the services of a contractor with a medical background who has the expertise, knowledge, experience, and skills required to" provide the agency with clinical support until 2012 as the agency updates its clinical laboratory fee schedule for new and existing tests and analyzes new codes for molecular pathology tests (PGx Reporter 07/13/2011)

During this week's meeting, CMS officials could not say whether this contract had been awarded. An agency spokesperson said that once a contractor is hired, it is unlikely that the agency would announce it publicly. Regardless, CMS reassured stakeholders at the meeting that it is in information-gathering mode for the time being.

"We are certainly cognizant of the fact that many in this room, and many people not in this room, are very interested in what the agency is going to do with these tests for pricing in the future," a CMS spokesperson said during the meeting. "We will do our best to try to keep our process as open and transparent as possible, and communicate to the people who will be affected by our decisions on these issues, as soon as we have decisions to make."


Have topics you'd like to see covered in Pharmacogenomics Reporter? Contact the editor at tray [at] genomeweb [.] com.

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