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Outdated Physician Reimbursement Main Barrier to Dx Adoption, Healthcare Consultant Says

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Physician adoption of genetic tests should be encouraged through a government mandate, a lengthy compliance window, and changes to the reimbursement system, said Dan Mendelson, president and founder of Avalere Health, at a recent conference in Washington, DC.
 
Avalere advises Fortune 500 companies, financial institutions, and contract research organizations on healthcare business strategy and public policy. Before joining the company, Mendelson served as associate director for health at the Office of Management and Budget, where he developed the Clinton Administration’s pharmaceutical benefit program, the President’s initiatives in health information technology, and federal policies in reimbursement and technology assessment.
 
“Nothing will happen in this marketplace until we force it, and the way to force it is through the reimbursement system,” Mendelson said at a conference on personalized medicine hosted by the Personalized Medicine Coalition. Mendelson recounted that during his time at OMB, he and others came up with a “budget-neutral way” to urge physicians to use the latest technology in healthcare.
 
“In other words, you can’t build the Medicare system unless you adopt the latest technology. … And then in order to make sure that people had some time to comply, we put a nice 10- or 15-year window to allow people to come into compliance over a nice long period of time,” Mendelson recalled. He likened this effort to the adoption of airbags in the car industry, where the federal government essentially forced the change through a mandate and by allowing a three-year compliance period.
 
The physician community has long complained that the current reimbursement system doesn’t account for increased complexity in services and additional counseling needed to provide genetic testing to patients. A recent HHS draft report on pharmacogenomics explained that the reimbursement problem is particularly acute for non-physician genetic counselors who have often reported difficulty in obtaining sufficient reimbursement for their services.
 
“Many PGx tests are likely to be complex and require careful interpretation and communication to patients, raising similar concerns,” the report stated. “If their time or expertise is not adequately reimbursed, clinicians who are already under pressure to see many patients may be unwilling or unable to devote the time needed to explain PGx test results to patients, and genetic counseling may not be widely or equitably available.”
 
Mendelson admitted that his OMB proposal to encourage physicians to adopt the latest technologies was “laughed out” of the Clinton White House in 1998, because administration officials felt that the 10-year compliance time was too long. They thought “it was ridiculous to kind of put this long time horizon and then, of course, we got very strong resistance from the physician community as well as from the hospital community,” Mendelson said. “Those are still the two major impediments right now, I think, in terms of really forcing adoption here.”
 
“I think we all kind of understand that until the reimbursement system is changed, we’re just going be talking about this for another 10 years.”
 
Beyond reimbursement, government officials and industry observers have often discussed the lack of physician education as another barrier to genetic test adoption. The US Food and Drug Administration has recently launched pharmacogenomic CME courses for health care professionals [see PGx Reporter 01-03-2007].
 
The FDA also updated warfarin’s label with genetic testing information and cleared the first genetic test for warfarin sensitivity. Additionally, the agency has partnered with the American Medical Association to develop an information brochure for physicians and patients on warfarin testing. In FDA’s view, labeling updates have not been successful in spurring physician adoption of tests. However, insurance companies and the Centers for Medicare and Medicaid Services have acknowledged that they look for that nod from the FDA when making coverage decisions.
 
Larry Lesko, director of FDA’s Office of Clinical Pharmacology & Biopharmaceutics, has previously suggested that since updating drug labels with genetic test information has not encouraged physicians to adopt molecular diagnostics, Dx shops should emulate pharma’s model of reaching out directly to physicians [see PGx Reporter 03-07-2007].
 
This advice seems to have taken hold as more and more industry efforts to spur physician adoption have centered on aggressive selling through big pharma-style sales forces and ad campaigns.
 

“Nothing will happen in this marketplace until we force it, and the way to force it is through the reimbursement system.”

Genomic Health President Kim Popovits last November said that the company had recently increased its sales force to better familiarize physicians with its breast cancer recurrence test, OncotypeDx, after the company committed itself to conducting and publishing multiple large clinical studies [see PGx Reporter 01-18-06]. Genomic Health began 2006 with 30 representatives targeting oncologists, but by the start of 2007 the company had expanded its direct field sales force to 50 reps. Additionally, Genomic Health appears to be pumping more money into its promotional efforts, having spent $24.6 million in 2006 on sales and marketing, a 60-percent increase over the previous year.
 
Another example lies in Myriad Genetics’ recently launched direct-to-consumer television advertising campaign to educate women about the risk of inherited breast and ovarian cancer associated with BRCA1 and BRCA2 genetic mutations, and the availability of its BRACAnalysis test [see PGx Reporter 09-12-2007].
 
However, despite educational and marketing efforts, once the decision to implement genetic testing falls in the hands of physicians, inadequate reimbursement continues to remain the salient issue hampering adoption. The effort to bring the reimbursement system on par with advancing technologies has been an ongoing struggle for the physician community, and changes have been slow to come.
 
The American Society for Microbiology in 2005 outlined largely the same concerns about reimbursement for genetic testing that were discussed at the PMC meeting.
 
Commenting two years ago on a HHS report on coverage and reimbursement for genetic tests, the ASM urged for “the recognition of qualified, board-certified, non-physician providers as valuable and critical members of the healthcare team by allowing coding for and direct billing for services provided directly by those providers using an assigned National Provider Identifier.”
 
According to ASM, the CPT-4 code 83912 for interpretation of molecular diagnostic tests is reimbursed as a physician fee schedule item when interpreted by a pathologist, but no reimbursement for the same service is provided when a test is interpreted by a doctoral level Board-certified clinical laboratory scientist,.
 
“Unless we change the reimbursement system, really, nothing will happen,” Mendelson said.
 
HHS Secretary Michael Leavitt, when asked how to urge healthcare professionals to adopt the tools of personalized medicine, said: “As we modernize reimbursement patterns, hopefully, hearts and minds will follow.”

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