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Will Other Insurers Follow Palmetto's Lead in Covering Genomic Health's Colon Cancer Oncotype DX?

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Originally published Oct. 3.

After national Medicare contractor Palmetto GBA decided last week to extend coverage for Genomic Health's Oncotype DX test for gauging patients' risk of stage II colon cancer recurrence, other insurers may be inspired to issue similar policies.

"Palmetto GBA has completed the Oncotype DX Colon Cancer Assay assessment and determined that the test meets criteria for analytical and clinical validity and clinical utility as a reasonable and necessary Medicare benefit," the contractor states on its website. The coverage is effective for claims for tests performed on or after Sept. 18.

Healthcare providers who order the 12-gene Oncotype DX Colon Cancer Assay should bill for the test as an "unlisted chemistry procedure" with the current procedural terminology code "84999," according to the Palmetto announcement.

Palmetto's policy covers men and women with stage II colon cancer. In conducting its review of the colon cancer assay, Palmetto conducted pharmacoeconomic analysis and considered the outcomes of two large trials: QUASAR and CALGB.

The landmark Quantitative Multi-Gene RT-PCR Assay for Prediction of Recurrence in Stage II Colon Cancer, or QUASAR, validation study, enrolled more than 1,400 stage II colon cancer patients and found that the Oncotype DX recurrence score was a significant and independent predictor of disease recurrence, even after accounting for other prognostic factors, such as tumor grade, lymphovascular invasion, number of nodes examined, T-stage, and mismatch repair status.

The findings from the QUASAR trial are awaiting publication in the Journal of Clinical Oncology.

In the Cancer and Leukemia Group B study, researchers from Genomic Health and several academic institutions analyzed tumor specimens from patients enrolled in CALGB 9581. In that trial, researchers previously found no difference in disease recurrence for more than 1,600 low risk stage II colon cancer patients who were either treated with edrecolomab or just observed for progression. But when investigators compared gene expression in more than 1,300 tumor samples, they found that patients' five-year recurrence risk correlated with their Oncotype DX recurrence scores, as well as among subgroups defined by T-stage and MMR.

In this study, "the recurrence score improves the ability to discriminate higher from lower recurrence risk stage II colon cancer patients beyond known prognostic factors, particularly in T3, MMR-I patients where traditional factors like grade and LVI were not prognostic," the CALGB study concluded.

Many Wall Street analysts viewed Palmetto's coverage of the Oncotype DX colon cancer test as a positive. Particularly encouraging for analysts was the fact that the decision came six months ahead of schedule, according to a note from Nicholas Jansen of Raymond James Equity Research.

"Most had anticipated a coverage decision several months following the publication of the QUASAR data later this year," Jansen wrote in a research note. "Considering the lack of material traction among payors for the colon cancer franchise, the Medicare decision should certainly help jumpstart the growth within this business over the near term and help offset the anticipated maturation of its breast cancer franchise domestically over the next few years."

Jansen estimates that the colon cancer assay will comprise around 10 percent of Genomic Health's overall revenues in the next 12 to 24 months. Prior to Palmetto's coverage announcement, Genomic Health was just starting the process of gaining insurance coverage for the assay. Israeli insurer Clalit, Kaiser Permanente, Group Health Cooperative, and a public insurer in Greece have also agreed to cover the test.

"With Medicare the largest payor for this sub-segment, we believe other payors may look to cover the test as well, which could drive more favorable announcements over the near term, particularly after the QUASAR data is officially published," Jansen wrote.

As of June 30, more than 10,000 doctors in more than 60 countries had ordered more than 200,000 Oncotype Dx colon cancer and breast cancer tests, according to Genomic Health.

In addition to covering the colon cancer test, Palmetto already covers Oncotype DX to gauge recurrence of breast cancer.