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CMS Preliminary Pricing for Genomic Procedures Raises Alarm Among Stakeholders


NEW YORK – After the US Centers for Medicare and Medicaid Services recently released preliminary pricing figures for genomic sequencing procedures, stakeholders across the laboratory and diagnostics industries are concerned that incentives for providing these tests will dwindle. 

Earlier this year, the agency held a public meeting on the adoption of six new CPT codes related to genomic sequencing procedures: three for tissue-based testing and three for cell-free DNA testing. The tissue codes are for genomic sequence analysis panels of solid organ neoplasms with interrogation for sequence variants: code 8X017 includes DNA analysis and microsatellite instability; code 8X018 covers DNA analysis, copy number variants, and microsatellite instability; and code 8X019 covers DNA analysis or combined DNA and RNA analysis, copy number variants, microsatellite instability, tumor mutation burden, and rearrangements. 

The cfDNA codes are for genomic sequence analysis panels of solid organ neoplasms using cell-free nucleic acid with interrogation for sequence variants: code 8X020 includes DNA analysis or combined DNA and RNA analysis, copy number variants, and rearrangements; code 8X021 includes DNA analysis, copy number variants, and microsatellite instability; and code 8X022 includes DNA analysis or combined DNA and RNA analysis, copy number variants, microsatellite instability, tumor mutation burden, and rearrangements.

The recommended prices for the codes ranged between $1,759.60 and $4,375 depending on the code's complexity and resource requirements, and a CMS advisory panel convened in July agreed with five out of six of those recommendations. Stakeholders like the American Clinical Laboratory Association, AdvaMed, the Association for Molecular Pathology, and the College of American Pathologists also supported those prices, but in releasing its preliminary pricing at the end of September, CMS bypassed the recommendation and the agency priced the codes at $597 each.

The pricing decision will affect laboratory-developed tests that do not already have PLA codes — unique codes that apply to one specific, proprietary test. Some diagnostic companies offering these tests, such as Foundation Medicine and Guardant Health, have PLA codes for their tests that are separately priced and won't be impacted by the recent CMS decision. 

CMS has two ways of determining pricing for new codes: gapfilling and crosswalking. Crosswalking a code means matching it to something else on the market and assigning the new code the same payment as the existing code, while gapfilling involves reaching out to each CMS jurisdiction and gathering data on what the price should be. The six new codes related to genomic sequencing procedures were crosswalked to the existing code 81445, which covers a panel that analyzes between five and 50 genes. According to the agency's notes on the codes, it said that the descriptors for the six new codes do not specify what is being analyzed and thus the agency "does not see justification in crosswalking to a code that specifies analyzing more than 50 genes." 

Before the release of the new set of six codes, only two next-generation sequencing solid tumor CPT codes existed: code 81445, for a panel analyzing between five and 50 genes, and code 81455, for a panel analyzing more than 50 genes. Code 81455 was the recommended crosswalk for the new codes, with additional multipliers depending on what else was being analyzed, like tumor mutation burden. 

Maude Champagne, the director of market access strategy at Illumina, said that those two general codes don't explain exactly what is being analyzed and are "highly insufficient to give visibility to payors on what they're paying for." As a result, the new codes were decided upon by a working group formed by the American Medical Association — the entity responsible for creating CPT codes — and brought to CMS for pricing. That working group decided against specifying the number of genes per panel and instead focused on describing the attributes of a test to provide "more granularity," Champagne said.

While the number of genes per panel isn't spelled out in any of the code descriptions, Champagne noted that the mention of tumor mutational burden in 8X019 and 8X022 indicates that the panel would have to include more than 51 genes, making the crosswalk for that test very easy. 

Paying $597 for such resource-intensive tests, Champagne said, will cause laboratories to stop offering these tests and will significantly impact patient access to this testing, adding there is "no way" a laboratory can run these tests for $600, let alone make a profit. 

Although not all cancer patients are Medicare beneficiaries, Champagne noted that most advanced cancer patients who need these tests are covered under Medicare and that labs can't rely solely on commercial payors to keep them afloat.

"At a $600 reimbursement rate, I don't see a lab continuing offering this assay. It would be too much of a loss, even if physicians are asking for it," she said. 

A reimbursement strategist from a large diagnostic company who requested anonymity echoed Champagne's concerns, noting that "almost every commercial payor anchors their payment amount to some percentage of Medicare." 

He added that $597 is "across the board, substantially less than what it would cost any lab to even purchase reagents to run the tests in the first place, let alone do it on a break-even and, heaven forbid, profitable basis."

While laboratories could submit to CMS for their own personal PLA codes to try to get better pricing for their specific tests, smaller laboratories may not have the resources to get a separate code, Champagne said. Right now, there's "no sustainable path forward" for the general CPT codes at $597 per test. That price is "industry-crushing," according to Champagne. "You rarely see decisions like this one that … could stop testing entirely if they were to be finalized as such." 

Jan Nowak, a member of CAP's Economic Affairs Committee, echoed Champagne's views. If the CMS pricing remains the same, the testing can't be done, he said. Like tumor mutation burden, microsatellite instability — mentioned in multiple codes — can't be analyzed with less than 50 genes, and thus shouldn't be crosswalked to the small panel code. Tumor mutation burden and microsatellite instability aren't restricted to specific genes, so adding an exact number of genes to the code descriptors wouldn't make sense, he added. 

These tests can't be treated the same as a metabolic panel or similar assay because they're not looking at specific analytes, he said. These codes cover "broad categories of genomic changes."

Other industry stakeholders have also expressed dissatisfaction with the agency's decision. Victoria Pratt, chair of AMP's New Codes Subcommittee, said via email that the organization was disappointed that CMS didn't support the recommended crosswalks and noted that "these codes need to recognize and address the full extent of the work being performed." 

A spokesperson from ACLA, meantime, noted via email that the organization had requested a meeting with CMS to further discuss its recommendations. 

While the public comment period for CMS's decision ended on Oct. 27, the agency's final decision won't be released until later this month. That final decision could involve maintaining the $597 price, gapfilling the new codes and waiting to set a final price until next year after data has been gathered from other Medicare jurisdictions, or reversing course and crosswalking the new codes to higher-paying codes, such as 81455, which is paid at $2,919.60. The reimbursement strategist said that he doesn't know of any examples of the third option occurring, and that the first two are much more likely. 

In the event that CMS maintains its preliminary pricing, there are ways the price could still change in the future, that reimbursement expert said. The "most effective lever" to changing the price would likely be through the Protecting Access to Medicare Act, which does not limit the amount a test's price can rise. However, PAMA price adjustments have been put off multiple years in a row, and there's no guarantee that they will go into effect. 

The law, passed in 2014 and implemented in 2018, requires CMS to set prices for laboratory tests based on private insurer rates that it collects from payment data from clinical laboratories across the US. PAMA was intended to reduce CMS spending on lab testing, but has been stymied due to lawsuits and other legislation pushing the reporting requirements back annually. Last year, the Saving Access to Laboratory Services Act was introduced in both the US House and Senate in an attempt to amend PAMA by instituting a sampling-based approach to collecting pricing data. 

He noted that if the AMA chose to rewrite the code descriptors and add a specific number of genes per panel, it would be a significant enough change that CMS would probably reprice the codes. Neither of those options would be a short-term fix, and in his opinion gapfilling the new codes would probably be the best choice, short of throwing out the codes and completely starting over. 

"Once a Medicare price gets kind of locked in like this, it's hard for that to change without going back and starting over again."