By Tony Fong
NEW YORK (GenomeWeb News) – As molecular diagnostics progresses toward becoming a routine part of healthcare, health plans are struggling with a host of issues from how to evaluate such tests to deciding which ones to cover.
Healthcare consulting, IT, and services firm McKesson is seeking to capitalize on the growing demand from health plans for help with such tests, and earlier this month it announced that three new health plans had joined its burgeoning list of clients using its products to help navigate a space it estimates at $7 billion and growing annually at between 15 and 20 percent.
McKesson offerings for such tests include software that provides automated notifications and authorizations, aggregates orders, and validates coverage decisions. Today, 44 managed care organizations across the country covering 50 million lives have signed on for at least one of McKesson's MDx products.
The linchpin of McKesson's MDx/genetic testing offerings is its InterQual Molecular Diagnostics Criteria, a set of clinical guidelines covering 500 tests with evidence-based criteria, including clinical evidence and branching logic decision trees to guide medical decisions. InterQual is currently used by about 4,000 hospitals and providers and more than 300 health plans.
McKesson's goal is not to tell health plans which of the approximately 2,000 molecular diagnostic tests currently on the market they should cover, Matthew Zubiller, vice president of decision management for the firm, told GenomeWeb Daily News, but to provide them with enough data and information to make informed decisions.
"The focus of our business is really about providing clear decision support at the point of care, making sure the right test is done at the right time for the right patient," he said. "For health plans, specifically, what we've done is … create an avenue for them to clearly articulate what their rules are for coverage, for medical policy, network policy, and payment policy."
McKesson began considering offerings specifically targeting MDx and genetic tests about four years ago when it looked at the personalized medicine space and the challenges that its customers would have to face in the coming years. With highly complex and expensive genetic tests beginning to make headway into the healthcare market, McKesson saw a need for tools that its customers could use to decide what tests to cover and whether those tests needed prior authorizations, Zubiller said.
McKesson began offering its MDx/genetic testing products about three years ago as a "soft launch" and since then has been building the business. Zubiller declined to disclose revenue figures for the molecular and genetic testing management business, but said that it is "a significant area of investment for McKesson."
As the molecular and genetic testing market continues to expand, health plans are not the only ones seeking help to navigate new tests employing 'omics technologies, either. Healthcare providers and laboratories also have been challenged, and employers, especially large ones, are also seeing more value in such tests and asking for coverage of them, adding to the demand for more information. The healthcare system, Zubiller said, has been ill-prepared to face the consequences of such a demand.
He said the problem can be broken down into three components — the inability to measure utilization of molecular diagnostics and genetic tests; the inability to manage utilization of them; and the lack of a central repository of information about the tests.
On the first point, health plans have a limited view of tests that are being used in their systems and for which specific genetic testing procedures they are paying. Because there are only 21 relevant Current Procedural Terminology codes for 2,000 molecular or genetic tests, and the majority of providers and labs stack the codes for reimbursement purposes, tracking utilization patterns based on CPT codes is an arduous process.
McKesson's solution is to create its own internal coding system for molecular and genetic tests. "They really serve in the absence of CPT codes," Zubiller said.
The current CPT coding system also makes managing utilization of MDx/genetic tests a challenge because it makes use of such tests difficult to track, "and labs end up getting paid regardless of whether or not the test is appropriate," Zubiller said. He added that the most commonly used method for managing test use now, which ultimately is not very effective, is one based on authorizations.
He said that managing test utilization is not about controlling costs of the tests itself, "but the growing cost impact that these tests have on the total cost of care," since diagnostics impact decisions about therapies, surgeries, and other care.
The Centers for Medicare and Medicaid Systems is scheduled to hold hearings in July to discuss CPT codes, including a hearing specifically to mull over new codes being developed by the American Medical Association.
As GWDN sister publication Pharmacogenomics Reporter reported recently, CMS said that it is not now accepting payment recommendations for genetic testing, but it "would like to open discussions to the public on recommendations going forward on how these codes should be addressed."
In the meantime, though, through use of its own codes for MDx/genetic tests combined with its Clear Coverage product — a software solution that automates notifications and authorizations and provides healthcare providers access to medical, network, and benefits policies — and InterQual, "utilization management becomes a lot easier, authorization becomes a lot easier," Zubiller said.
McKesson also is moving to create a centralized repository of information about molecular and genetic tests on the market. While different stakeholders such as the National Institutes of Health and the US Food and Drug Administration have taken similar steps, and individual labs have their own catalogs, there remains no definitive one-stop source that plans, payors, providers, and labs can tap into.
McKesson is in the process of building a Diagnostics Exchange of tests, with descriptions of what they are and who performs them. The catalog contains about 1,500 tests, including 500 in InterQual, which contains the most commonly used molecular and genetic tests, including BRCA tests, Genomic Health's Oncotype Dx, cystic fibrosis fetal tests, and hereditary non-polyposis colorectal cancer tests.
The firm believes InterQual, in particular, is an essential tool for health plans trying to make sense of the newest genetic tests. McKesson decides which tests to include in InterQual based on discussions with health plans, providers, and laboratories to identify the ones "that are percolating to the top of the list," Zubiller said. Test inclusion decisions are also based on analyses of claims to determine diagnosis areas, specialties, and regions "where we believe that there is high variation in what utilization could be for these diagnostic test areas."
McKesson then reviews the medical and scientific literature to evaluate the effectiveness of the test. The literature is aggregated either into a clinical evidence summary, which notes what the evidence suggests, or into an algorithm, a set of about 50 questions set up as a decision tree. By answering those questions, medical necessity for the test can be determined.
The last step is consultations with clinicians and others who use the tests in the field. Based on any feedback or recommendations they may have, McKesson will make necessary changes, and then finalize a decision.
Information and data about the tests included in InterQual are updated each quarter, Zubiller said. As a result, evidence that originally pointed to some tests as warranting coverage can and has changed over time. The goal, he emphasized, is to provide clear, current information so that health plans can make as informed a coverage decision as possible.
While most tests covered by McKesson's MDx/genetics testing offerings are genetics-based, Zubiller said that the company also evaluates tests based on other more esoteric 'omics technologies, such as proteomics and metabolomics. Those tests, he said, are "still making their way through the process, [but] we do believe we have a very wide aperture in terms of the tests that are out there."