By Turna Ray
The American Medical Association has formed a molecular pathology workgroup to issue recommendations for modernizing the reimbursement codes for molecular diagnostic and genetic tests, and is planning to implement a new coding structure in the next two years, according to industry observers knowledgeable of the process.
Although AMA has revealed very little about its current thinking on the subject, stakeholders such as Myriad Genetics, the Association of Molecular Pathology, and healthcare information technology provider McKesson are among many entities following the process closely to track how the new code structure will impact reimbursement for molecular diagnostic products.
During a recent call with investors, Myriad Genetics CEO Peter Meldrum said the new molecular pathology workgroup is slated to issue recommendations to the AMA's CPT Code Editorial Panel by year-end. The editorial panel then will decide whether to incorporate the molecular pathology workgroup's recommendations by Dec. 31, 2011.
"In the past we've used old CPT codes and CPT code stacking to pay for Myriad's tests through Medicare. This workgroup is going to come out with a new fee schedule for all molecular diagnostic tests that modernizes the system so we don't have to rely on CPT code stacking," Meldrum said. The new molecular and genetic code structure is slated to take effect in 2012, he added.
The AMA maintains Current Procedural Terminology, or CPT, codes through its CPT Editorial Panel. In order for healthcare providers to bill insurers for medical, diagnostics, or surgical procedures, they must use CPT codes published by the AMA to describe the work performed.
Industry stakeholders have often criticized outdated CPT codes for not representing the value of advanced molecular procedures required to perform complex genetic tests. The lack of value-based reimbursement has often been cited by industry observers as a major barrier to personalized medicine.
Similarly, the practice of "stacking" a series of CPT codes when there isn't a single code to describe all the steps of a procedure isn't working for payors, either. When healthcare providers stack CPT codes to bill payors, health plans often don't know for what exactly they are reimbursing.
In the past several months, the AMA has brought together stakeholders to discuss the challenges of updating the CPT coding structure, and the group met most recently in February in Orlando, Fla.
Ahead of the AMA meeting, the Association of Molecular Pathology held a meeting to discuss recommendations the group has submitted to the AMA for consideration in the form of a white paper. Though the AMP meeting was open to the public, attendees and participants were asked to sign confidentiality agreements. The AMA has also mandated that stakeholders playing an advisory role in the CPT code updating process sign confidentiality agreements.
As such, officials from AMP and the healthcare information technology provider McKesson, who were present at AMP's meeting last month, refused to comment for this story.
McKesson announced last November that at least two payors, MVP Health Care and Blue Cross of Idaho, are using its automated decision support system, called InterQual, to track genetic testing and to gain more clarity on which tests they are reimbursing. According to McKesson's estimates, only 21 relevant codes exist for more than 1,500 molecular diagnostic tests.
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The current CPT coding system "is simply not adequate" in molecular diagnostics, McKesson Health Solutions Medical Director Douglas Moeller said at a public meeting last fall [see PGx Reporter 11-18-2009]. As a workaround for the inadequacies of the existing system, McKesson has created a catalog that gives a unique identifier to each molecular test. In this way, "anyone who wants to know about a particular test can go look it up" in InterQual.
Jeffrey Kant, AMP's economic affairs committee chair, discussed with Pharmacogenomics Reporter some broad issues related to the current CPT coding structure, but would not discuss the coding recommendations AMP issued to AMA in its white paper.
Kant stressed that AMA is just beginning to discuss updating CPT coding for molecular pathology tests and is considering a number of proposals and ideas, including those proposed by AMP. As such, none of the proposals currently being considered may end up in the final recommendations sent to the AMA's CPT Editorial Panel.
However, a source familiar with the various ideas currently in play who requested to remain anonymous for this article said that AMP is proposing two tiers of CPT coding: a set for the most utilized molecular tests and another set for tests based on the number of exons analyzed within a gene.
The most utilized tests may include pharmacogenomics-guided warfarin testing, KRAS testing to gauge response to EGFR-inhibiting monoclonal antibodies to treat colorectal cancer, and genetic tests for cystic fibrosis and factor V Leiden. In addition, AMP is proposing new codes for molecular diagnostics based on how many exons within a gene the test analyzes. Myriad's BRACAnalysis test to predict women's risk for hereditary ovarian and breast cancer would fall in this category.
Kant would not confirm that AMP recommended this two-tiered coding structure.
It is unclear how AMP proposes to code multi-gene tests such as Agendia's MammaPrint, which measures the expression of 70 genes, and Genomic Health's Oncotype DX, which gauges the expression of 21 separate genes.
According to Kant, who was formerly AMP's president, Oncotype DX is the type of test that "should be coded using a stacking code, but is not." Genomic Health has garnered a miscellaneous code for Oncotype DX. "It is more advantageous for them financially to have it set up that way," said Kant, who also serves as the professor of pathology and human genetics at the University of Pittsburgh Medical Center.
"Any reform of the system would want to take account of that type of situation," he added. "There are other tests that are FDA cleared that operate on the same principle as Oncotype DX that … don't have a miscellaneous code," he pointed out. "But that would be up to payors to decide whether a particular test justifies their own code." Oncotype DX is a laboratory-developed test and is not FDA cleared.
According to the source knowledgeable of AMP's proceedings, the group's discussion at the February meeting seemed not to favor single-lab tests, such as BRACAnalysis, and AMP committee members referred to such laboratory-test developers as "boutique labs" or "monopoly tests."
Conflict of Interest?
AMP's involvement in shaping CPT coding might even constitute a conflict of interest, the source suggested, because the organization is a plaintiff in a lawsuit charging that several of Myriad's BRCA patents are illegal and unconstitutional.
The suit, Association for Molecular Pathology, et al. v. United States Patent and Trademark Office, et al. — filed in May by the American Civil Liberties Union and the Public Patent Foundation on behalf of scientific organizations representing numerous medical professionals, researchers, women's health groups, and individual women — alleges that the BRCA gene patents held by the University of Utah Research Foundation and exclusively licensed to Myriad "stifle research that could lead to cures and limit women's options regarding their medical care." Specifically, the lawsuit challenges the patentability and constitutionality of Myriad's patents on the BRCA1 and BRCA2 genes, linked to increased hereditary risk for breast and ovarian cancer [see PGx Reporter 05-13-2009].
"Given all the concerns the AMA CPT [committee] has about conflicts of interest, it seems a little quirky to me that AMP can be suing Myriad and be adverse to them in court, and concurrently propose CPT codes that also might be adverse to them," the industry observer noted.
In Kant's view, AMP's CPT coding recommendations and its involvement in the ACLU lawsuit against Myriad are two disparate issues. "They don't have anything to do with each other," he said. "AMP has long felt that genes should not be patented because they are naturally occurring phenomena, and it makes it difficult for multiple labs to provide quality services to patients.
"In terms of actually coding for the test, let's say that [the ACLU] case gets decided in favor of Myriad; we would still feel that their assay needs to be coded in a way so payors would know they are paying for a hereditary breast and ovarian cancer test," Kant added.
Of course, the ultimate impact on the reimbursement of Myriad's tests — or those of other molecular diagnostic developers — won't be known until the new CPT coding system is put in place. Still, Myriad officials recently tried to quell investor worry that potential changes to the CPT coding structure would harm reimbursement for the company's flagship BRACAnalysis test.
Citing the issue as one of the concerns weighing down the company's stock, Myriad's Meldrum maintained that any forthcoming changes to the coding system would not "impact very much the reimbursement of any of the company's tests."
He further suggested that even if the new coding system reduced the payment for BRACAnalysis, the company has some wiggle room. "Under the current CPT code, Myriad justifies the price of $4,800 for BRACAnalysis, but the company only charges $3,120," Meldrum noted.