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Is There an Easy Way to Ensure Your Molecular Dx is Reimbursable?


At A Glance

Name: Maria Stewart

Title: Executive Director, Boston Healthcare

Education: MA in Law and Diplomacy from the Fletcher School of Law and Diplomacy at Tufts University; concentrations in International Business and Technology Policy

Background: Performed consulting work for Bristol Myers Squibb

Age: 38


Just how important is the coding issue for molecular diagnostics companies? Is all the talk about the CPT code book taking attention away from more pressing reimbursement issues? [see 3/18/04 SNPtech Pharmacogenomics Reporter

SNPtech Pharmacogenomics Reporter spoke with Boston Healthcare executive director Maria Stewert to learn how molecular diagnostics companies might better dispatch their resources.

What do you think are some of the biggest reimbursement challenges facing molecular diagnostics companies today?

First of all, the coding for molecular diagnostics is in flux right now. There is a panel that is working on how to realign the molecular diagnostic coding so it better represents what is being done, as well as give a better indication of what is actually being tested for. Right now, when you’re coding a molecular diagnostic test, you’re coding the steps involved in that test; there’s no way to know what the ultimate diagnostic outcome is. Are you testing for cystic fibrosis, for example? Are you testing for Alzheimer’s? The panel is looking at these questions, but its results are a way off.

There have been some delays based on the fact that this process is ongoing, so they don’t want to keep introducing new [molecular diagnostics].

Another major challenge is that many of the steps that are currently coded for molecular diagnostics are significantly under-reimbursed. And this has been acknowledged by many parties. But with the introduction of the Medicare prescription drug act last year, one of the steps taken in that act — which was a compromise step — was to freeze laboratory fee schedules under Medicare until 2008. Therefore, these significantly low payment rates are going to remain in place for the next five years.

Who comprises this panel?

The AMA has convened the panel, but has nominated representatives from different organizations to participate; the ACMG, the ACLA, and many major laboratories that are involved in performing these tests will have input, too.

Besides waiting for this panel to end its research, what can molecular diagnostics companies do to avoid pitfalls and make sure there is a stable reimbursement foundation for the products they are developing?

I think more importantly than avoiding pitfalls, it is important to keep abreast of what’s happening with molecular diagnostic coding, and making sure that the groups that are involved in that process are aware of the kinds of technologies that are coming online so they can incorporate those into the changes.

Last week I spoke with Tracy Gordy, who chairs the American Medical Association editorial panel that oversees the CPT code book, and he said that the CPT book gets a bum rap from some people who think it is the key to reimbursement. He said that having a code in the CPT book does not guarantee payment.

There are [some] major areas of reimbursement: coverage — first and foremost — followed by coding and payment. Coding is the language with which to describe what was done. And coding is the sort of operational link between coverage and payment. However, any payor at any time can look at a test and, on the clinical merits of that test, make a decision that they are not going to pay for it. [Similarly,] procedures can be paid for when they do not have codes, but it is unlikely and impossible [that] a procedure can be paid for if a payor has issued a non-coverage policy.

You mentioned in a recent presentation in Reston, Va., that payors are becoming more savvy about the so-called ‘so-what’ factor.

If a company is developing a test for a particular condition where there is no other test, the question that any payor is going to ask — particularly if the test is costly or premium priced — is going to be, ‘Well, how does the introduction of this test impact clinical practice, and what are physicians going to do to treat the patient?’ Is it going to be additive? In other words, are they still going to do the CT scan or an MRI, and now they’re just going to add this test? Or is this going to replace things? And once you have diagnosed a patient with this condition, what are you going to do differently? If it’s a test for a condition for which there are no other tests, then the next question is, ‘What are the treatments?’ And ‘What are you going to do differently?’ Is this test going to be prescriptive and suggest one therapy over another? All of these questions have to be answered, and the issue when developing a test is that the requirements for bringing a test to market from a regulatory perspective may not be the same as the requirements that a payor is going to have in order to be willing to cover and pay for the test. The brass ring would be to show that you actually impact outcomes. And it’s very difficult to do that, so the next level is to show the impact you have on treatment. If the physician is still going to do all those things that he or she is already doing, then the question will be, ‘Will they really need this additional test?’ Prove it and show me why it’s important.

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