This summer, the chief coding and reimbursement body in the United States will decide whether labs that perform molecular-diagnostic tests will receive a new roster of billing codes, according to a person familiar with the task. If approved, the updated current procedural terminology, or CPT, will likely lower reimbursement hurdles and embolden reference labs to employ more genotyping and gene-expression technologies.
This development, largely the result of a year-long project to drag current procedural terminology into the molecular age, may also streamline universal coding protocols, encourage the development of new technologies, and reduce the cost of gene-based tests.
“There’s a bunch of people [on the CPT panel] who didn’t know what DNA was,” according to Mike Watson, who as director of the American College of Medical Genetics has been spearheading the drive to introduce molecular terminology into the CPT lexicography. “Now there are, and we have the opportunity to update” the standards.
Today, nearly all US-based payors use the CPT book to guide reimbursement policies for procedures performed at doctors’ offices and certain outpatient clinics. [Another book is used for hospital-based procedures.] The book, which includes approximately 7,000 codes, is updated annually and indirectly determines whether certain medical procedures are performed: If a code does not exist, chances are the underlying procedure won’t be covered, or will be covered inaccurately. Certain new platforms face similar reimbursement quandaries.
It is in this context that critics say providers, and to a greater extent molecular diagnostic-tool vendors, have been hurt. Ignorant of technologies like PCR and microarrays, the panel of editors responsible for maintaining the CPT code book has failed to adapt nomenclature to new tools and procedures, critics argue. So despite growing interest from the market, disciplines at the cusp of new technology development, like molecular diagnostics, have lost ground in the reimbursement race.
“The current CPT that provides the codes for clinical lab use has encountered problems due to the range of technologies emerging from the explosion in automated, gene-based research,” according to Joseph Ferrara, vice president of consulting services at Boston Healthcare Associates. “Not only does the relentless stream of new technologies make it difficult for the CPT editorial panel … to develop generic descriptions, but also the association faces the possibility that it may issue codes for technologies that may not be widely adopted or may shortly become obsolete.”
Another issue that greatly affects molecular diagnostics in particular is that CPT coding for these kinds of tests is based not on a particular gene or disease marker, but on the technology being used. This muddles reimbursement protocols for payors, and will eventually curtail demand and hamstring vendors’ ability to recoup R&D expenses. “Coding and payment based only on analytical technology … may not account for important differences between tests, such as reagent expense that varies depending on the condition being tested,” Ferraro wrote in a recent commentary in IVD Technology, an industry publication. The CPT’s inability to account for these differences “directly affects a laboratory’s ability to obtain appropriate payment and offer certain tests profitably.”
Watson said his addendum aims at changing this. He is currently writing a “complete revision” to all of the genetic-testing coding within the CPT book. “We want to bring in gene-specific codes to bring greater granularity to what it is that somebody’s testing,” he told SNPtech Reporter.
Today, roughly 20 molecular-biology codes and 40 codes for genes exist in the CPT. All of them are generically analytical — PCR, probe, and so on. This format was enacted deliberately years ago because it “allowed for greater flexibility” for the technology that had been evolving at the time, according to Watson. Today, however, there are new technologies — primer-extension products, DNA arrays, and other multiplexing tools — that are not represented in the CPT book.
Additionally, current amplification codes are specific to DNA, a definition that ignores newer technologies that amplify signals other than DNA. “That language is a little too constraining,” said Watson. “We want to make sure we include language that captures the amplification of a signal.” He said systems like Third Wave Technologies’ Invader assay would likely benefit from this kind of update.
Watson said he hopes to submit the final draft of his addendum in June, which means the CPT panel will likely review it in August. The CPT panel, which is a part of the American Medical Association, comprises around 20 individuals from reference labs, the major medical-specialty societies, at least one payor, and a representative from the US government.
The panel meets quarterly to decide the fate of suggested addenda supplied throughout the year by the 100 or so advisors who are also recruited from the major specialty societies. If approved, new codes “move very quickly” to the US Centers for Medicare and Medicaid Services, which assigns a rate reimbursement to them. New CPT books are published on the first day of every year.
Watson also is currently working with an undisclosed number of companies to “get a sense of what new technologies they’re using that are coming down the pike,” he said. “We don’t want to write anything that would compromise the development of a new technology by writing an openly constraining description.”
But Watson admits he faces an uphill climb. “In the grand scheme of medicine, genetics is barely a blip on the radar screen. Financially, it’s a blip,” he said. “When you think about the money in medicine — and in fact the lab-testing side is 10 percent of the industry compared with the 90 percent that is therapeutics — you’ll find that molecular ain’t what people would put on their list to make sure that they were dealing with it appropriately.
“As a geneticist I know they’re wrong; but nevertheless the reality is if you place it in the context of the impact it has right now, financially and otherwise, it isn’t all that big,” he said.
Another stumbling block to consider is the fact that most members of the CPT panel were never trained in genetics or molecular biology. “There’s never been a geneticist on the [CPT] committee,” Watson said. He added that the committee now has a geneticist as an advisor, and that Watson has at least once nominated him for a committee seat.
“It’s all about trying to accurately reflect the work that’s being done. After all, that’s what the CPT system is all about,” Boston Healthcare Associates’ Ferraro told SNPtech Reporter recently. “There’s a lot of new technologies that are emerging, and they’re simply not described in the CPT book.”