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UnitedHealthcare Sees Need for National Registry to Track Use, Set Coverage of Molecular Tests

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This article has been updated to clarify information about NIH's Genetic Testing Registry.

Insurer UnitedHealthcare is keeping a close watch on efforts by the Centers for Medicare & Medicaid Services to track the use of molecular diagnostics and set reimbursement policy based on the value these tests add to patient care.

UHC would be interested in using a national test registry to track the diagnostics it pays for, according to Lee Newcomer, senior vice president of oncology services at the firm. However, in the event that no such resource emerges soon, UHC is currently considering its options in this regard. "We [are] interested in using a common registry to identify tests and we're in the process of starting to evaluate that," Newcomer told PGx Reporter. "But we haven't instituted a program yet."

UHC believes that payors are in dire need a program under which they can review the analytical and clinical validity of molecular diagnostics and compare them to the standard of care. In a working paper released in March, UHC reported that its health plan participants racked up nearly $500 million in genetic and molecular diagnostic testing costs in 2010, a 14 percent increase on a per-person basis since 2008. Overall, national spending on genetic tests and molecular diagnostics "may have reached around $5 billion" in 2010 and could reach as high as $25 billion by 2021, according to the report (PGx Reporter 3/14/2012).

UHC holds the view that a common registry would help payors get a better sense of the types of tests they are paying for, and whether these tests are actually improving patient outcomes or lowering healthcare costs. "We think that some kind of identification system for molecular diagnostics is a must," Newcomer said.

"I don't want to create a UnitedHealthcare-unique registry," he added. "I want to use one that is nationally available."

However, efforts to develop a national system for tracking utilization of molecular diagnostics have received significant pushback for labs and test developers. As a result, the few efforts underway in this regard have either fallen short of the mark or have faced significant implementation hurdles.

For example, the NIH's Genetic Testing Registry was initially being proposed as a public resource to which all labs and test providers would be required to submit information about their marketed tests. However, after factoring in input from industry stakeholders, participation in the registry became voluntary, proposals to include cost data were scuttled, and providing clinical utility data became a recommended field (PGx Reporter 10/20/2010).

Meanwhile, CMS has directed Medicare contractor Palmetto GBA to establish the MolDx program, a system of gauging test utilization and setting reimbursement policy based on the clinical evidence showing that a test is useful in improving patient outcomes or lowering healthcare spending. This effort, which is so far limited to six US states and territories, has also faced significant resistance from the American Medical Association and from lab groups.

Under MolDx, Palmetto is requiring labs to submit data on the clinical validity and utility of their tests in order to receive Medicare coverage. Under the program, each lab must also submit a diagnostic claim with a unique identifier to enable Palmetto to track its utilization. Based on the clinical evidentiary data submitted by labs and the utilization information gathered by Palmetto, the contractor will determine CMS's reimbursement policy and pricing for molecular diagnostics performed (PGx Reporter 11/16/2011).

Lab groups don't like the MolDx program because they fear that the effort will be used to deny payment or cut reimbursement rates. Moreover, they are concerned that the program may compromise the privacy of test data that is proprietary to labs.

The AMA, meanwhile, objects to Palmetto's use of unique identifiers, called Z-codes, to track test utilization, because it doesn't want these codes to eventually trump the use of its current procedural terminology codes. The AMA owns the copyright to and receives royalties on the use of CPT codes, the most widely used coding system for claims processing in the US.

Traditionally, in requesting reimbursement for medical interventions performed, healthcare providers have stacked various CPT codes to describe the services they provided. However, payors have found that these bundled CPT codes obscure the specific molecular diagnostics being performed, and therefore they have little idea of whether they are paying for tests that are medically necessary, that improve patient outcomes, or save money.

Newcomer said that UHC is currently not using Z-codes, but is still coping with stacked CPT codes. "Without a coding system, you can't do anything," he reflected. "You can't figure out what a fair price is or whether or not you should even cover the test. And you can't have competitive bidding for … similar tests."

In an attempt to create a more granular reimbursement system, the AMA has issued more than 100 new CPT codes for genetic tests. UHC will use these new codes to track utilization of tests when they go into effect next year. However, many industry observers have said that while these codes are an improvement over stacking old CPT codes, they don't address advanced molecular diagnostic technologies, such as whole-genome sequencing. Moreover, these codes aren't unique to each branded test, which would allow payors to more closely track which tests are being used.

The difficulties that other molecular diagnostics tracking efforts have faced are due to "industry's unwillingness to participate," Newcomer said, noting that Palmetto's program is working in the states where it is implemented. "Having something like this is inevitable. You can't have billions of dollars being spent on tests that can't even be identified," he added.

Since UHC doesn't necessarily want to create its own registry, it is watching where the MolDx program lands, or whether CMS creates a national registry.

MolDx is not a national program. Palmetto has been using healthcare technology firm McKesson's Diagnostics Exchange module to collect evidentiary data on tests. Although McKesson has said that private insurers are interested in using its module to track test utilization and craft reimbursement policy, the future of Palmetto's MolDx effort is uncertain, since Palmetto just lost its Medicare contract with CMS for the jurisdiction where the program is being implemented (PGx Reporter 10/17/2012).

"We've been watching to see if CMS will create their own [registry], or whether McKesson's [will take hold]," Newcomer said. "McKesson is talking to the AMA, so there may be an alliance forged there, and that may become the national standard. We're really waiting for all this to sort itself out.

"We want to use [a registry] that everyone is using in the country, but we want to use it as soon as possible," he added.

Even if a nationally accepted molecular diagnostic registry that payors can use to follow test use is launched, the metrics by which payors evaluate which tests are covered and set reimbursement levels still have to be established. Earlier this year, Palmetto said it was figuring out the criteria by which it could establish test pricing based on the value the diagnostics provided to patient care (PGx Reporter 2/29/2012).

Comparative effectiveness research, which evaluates the clinical utility and cost of new interventions against established methods, is one way of gauging "the value" of a new test or drug. This type of data is currently lacking for molecular tests, which in turn limits payor coverage and hinders adoption into mainstream healthcare. UHC subsidiaries Ingenix, OptumInsight, and the Lewin Group conduct comparative effectiveness research that could provide the types of evidence that payors are looking for to craft more precise coverage policies around molecular diagnostics.

Newcomer, in the past, has proposed a "straw model" for determining whether a test should be reimbursed by payors. Specifically, he has put forth the suggestion that a test must either show 10 percent improvement in patient outcome over the standard of care, or reduce the cost of care by 10 percent. This is only a proposal for consideration, Newcomer explained this week, emphasizing that this is not the criteria by which UHC makes coverage decisions currently.

"We need to, as an industry, decide what the criteria are for when a test is good enough for coverage," Newcomer said. "I picked 10 percent because when you start getting lower than that, you're really not making much of a significant difference in medical care."

However, Newcomer is not insisting that his "10 percent" proposal is the right answer. "All we're doing is putting forth the proposal to start the debate and start the discussion because we need to have one," he said. "The [test] manufacturers don't know where that line is. The payors don't know what it is either. And that's going to make all our discussions difficult."