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CMS Issues Preliminary Lab Fee Schedule Determinations for Genomic Testing CPT Codes

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NEW YORK (GenomeWeb) – The Centers for Medicare & Medicaid Services has released its preliminary clinical laboratory fee schedule (CLFS) determinations in which the agency said that new current procedural terminology (CPT) codes describing advanced genomic sequencing procedures will be priced through the gapfill process.

In March, the American Medical Association announced that it had accepted new CPT codes for advanced genomic tests, which simultaneously analyze multiple disease-linked markers and use next-generation sequencing technologies. The types of tests addressed by these codes include whole-genome and -exome sequencing-based cancer panels.

Industry players had suggested some of the codes be priced through gapfill and some through crosswalking. However, CMS has now determined that these CPT codes (81410 through 81471) will all be priced using the gapfill process next year.

Tests prices using the gapfill process are treated like new diagnostics that have no corresponding technologies addressed by existing CPT codes. Contractors set reimbursement levels for gapfilled test codes based on a number of factors, such as local pricing patterns, the resources needed to perform the test, and how other payors price them. After one year, CMS uses the median rate from contractor-specific amounts to issue a national reimbursement rate for each code. New CPT codes that are priced based on the crosswalk method are matched to existing codes for comparable tests to determine payment.

For example, CMS recently issued a final national coverage determination for Exact Sciences' colorectal cancer screening test Cologuard, and decided to crosswalk the diagnostic to three existing codes setting a preliminary price of $502.

However, the pricing process for the 21 codes for advanced genomic testing procedures will play out over the next year as CMS has chosen to establish reimbursement through the gapfill pathway. "As we have done with past molecular codes, we are recommending that this series of new Tier 2 molecular pathology codes be gapfilled for 2015," CMS said in the preliminary CLFS document. "This will allow CMS and its contractors the opportunity to gather current information about the manner in which the tests are performed and the resources necessary to provide them, so that ultimately CMS can set an appropriate payment rate for these tests."

In this preliminary CLFS document, CMS has also laid out its rationale for addressing pricing for several codes for so-called multi-analyte algorithm-based assays (MAAAs). As Foley Hoag reimbursement expert Bruce Quinn pointed out in a recent blog post, among these codes is one for Genomic Health's breast cancer recurrence test Oncotype DX.

Genomic Health had historically used an unlisted CPT code to garner reimbursement for Oncotype DX. The new code 81519 describes a real-time RT-PCR test that gauges the expression of 21 genes and employs an algorithm to report a recurrence score.

While this set of MAAA codes will go through the 2015 gapfill process, others may be crosswalked in the future. "We do not believe there is a single consistent definition for a MAAA that allows us to make a categorical determination of whether these codes constitute diagnostic laboratory tests," CMS noted. "The Medicare Administrator Contractor will continue to consider each individual test that is classified by the CPT as a MAAA for coverage and payment."

Finally, CMS also placed a number of new analyte-specific CPT codes for genomic tests that will be gapfilled in 2015, such as FT3 testing for acute myeloid leukemia.

Just because there are new codes for these genomic tests, and healthcare providers can report performing them to payors in a consistent way, that doesn't mean all multi-marker cancer panels or whole genome/exome sequencing tests are automatically covered. CMS and private payors will continue to determine payment based on evidence supporting clinical utility of the tests.

Under gapfill, Medicare contractors are slated to set preliminary prices for the new genomic CPT codes in the first quarter of 2015, at which point the public will get a chance to provide input. Based on the final prices published by Medicare, CMS will set 2016 test prices.

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