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CMS Seeks Contractor to Help Assess Molecular Pathology Codes, Lab Services Payments


Originally published July 12.

By Turna Ray

The Centers for Medicare & Medicaid Services is looking to hire a contractor who can help it assess how it should pay for molecular diagnostics and new laboratory services.

In a solicitation published last month, CMS announced it was looking to "procure the services of a contractor with a medical background who has the expertise, knowledge, experience, and skills required to" provide the agency with clinical support until 2012 as the agency updates its clinical laboratory fee schedule for new and existing tests and analyzes new codes for molecular pathology tests.

CMS' request comes as the American Medical Association is developing new current procedural terminology codes for molecular diagnostic tests. So, far the Molecular Pathology Workgroup of the AMA's CPT Editorial Panel has proposed a set of analyte-specific codes for commonly performed tests and another set of resource-level codes for less common tests (PGx Reporter 03/16/2011). The AMA has yet to tackle coding for multi-analyte algorithm-based tests, so called in vitro diagnostic multivariate index assays, but is planning to host a meeting on this topic in Chicago on July 20.

Right before the AMA's meeting on IVDMIAs, CMS is scheduled to hold a meeting on July 18 at its headquarters in Baltimore to hear recommendations on payment levels for new CPT codes that will be added to the Medicare clinical laboratory fee schedule in 2012. Following this meeting in the morning, CMS will hold a separate hearing in the afternoon to discuss the AMA's new molecular pathology testing codes.

CMS said in this week's solicitation that the contractor it is looking to hire will primarily assist the agency in ensuring that the payment rates it does set for new and existing CLFS codes are accurate.

Additionally, CMS is looking for personnel who have clinical knowledge of lab services and can help the agency determine payment rates. Applicants will also be expected to provide clinical knowledge of molecular pathology procedures; attend meetings related to the clinical lab fee schedule, the CMS annual meeting on lab test codes, and meetings on molecular pathology services procedures; and help CMS sort through public comments on payment rates.

It is unclear if the agency has hired a contractor yet, particularly since CMS' meeting on genetic testing reimbursement is next week. A CMS spokesperson couldn't verify whether the agency had awarded the contract yet.

"We hope that the contractor selected works with innovators and understands the substantial amount of research and development that goes into more sophisticated personalized medicine tests," Amy Miller, public policy director for the Personalized Medicine Coalition, told PGx Reporter. It will be particularly critical for personnel hired by CMS to recognize "that investment must be recouped through reimbursement levels to keep these companies in business and inspire development of more of these game-changing diagnostics."

As CMS figures out how best to set payment for genetic tests, labs and industry observers are closely watching whether the agency decides to keep these tests on the CLFS or in the physician fee schedule, or create an entirely new system. Most genetic test developers feel that the current payment structure doesn't account for the additional analysis and interpretive work that these tests require (PGx Reporter 06/22/2011).

The new contractor at CMS will help the agency sort through some of these concerns. CMS notes in its statement of work that the contractor will be expected to provide "critical clinical analysis of information gathered during the July public meeting which shall, at a minimum, critique manufacturer provided information, provide clinical comparisons of new and existing tests, and verify the descriptions of the resources and costs of performing new tests."

The contractor will provide "critical clinical analysis" of the information provided to CMS during the meeting regarding new lab services. Specifically, the personnel will "verify the descriptions of the resources and costs of performing molecular pathology procedure tests."

It appears that CMS may have some time to figure out how it wants to move forward in light of AMA's new molecular pathology CPT codes. The AMA has said that it intends to phase out the current practice of CPT code stacking by the end of 2012. However, some industry observers have projected that by the time stakeholder input has been factored in and the codes are finalized, it could be 2014 before code stacking is no longer used and the new codes are in effect.

One of the major hurdles for the AMA in establishing new molecular pathology codes is figuring out how to develop classifiers for in vitro diagnostic multivariate index assays — a topic that it intends to address in its July 20 meeting.

Sources knowledgeable of the process have indicated that the AMA and stakeholders will discuss at the meeting a proposal to develop Category IV codes for IVDMIAs that sponsors would use instead of Category I unlisted codes. The new category of codes would recognize that unlike most tests that fall in Category I, IVDMIAs may not have FDA approval or clearance and may not be broadly used by doctors.

Minimum requirements for IVDMIAs to receive a Category IV code under this proposal would include FDA approval of the test if it is required; demonstrated clinical utility in two peer-reviewed US journals; and the commercial availability of the test in the US. It is envisioned that the new codes in this section will be released tri-annually through the AMA's website dedicated to CPT coding issues and published annually in the CPT codebook.

Have topics you'd like to see covered in Pharmacogenomics Reporter? Contact the editor at tray [at] genomeweb [.] com.