Skip to main content
Premium Trial:

Request an Annual Quote

CMS 2017 Pricing Brings Good News for Several Molecular Diagnostic Firms

NEW YORK (GenomeWeb) – The Centers for Medicare & Medicaid Services yesterday released final 2017 pricing determinations for lab tests described by new CPT codes, bumping up pricing for several genomic tests from rates it released this fall.

In September, CMS released 2017 pricing for several CPT codes for gene sequencing procedures and multi-analyte algorithm assays (MAAAs), which become effecting Jan. 1, 2017. Subsequently, labs asked CMS to reconsider those rates, and in several cases, it worked out favorably.

For example, CMS had proposed over the summer an initial price of $2,240 for Veracyte's thyroid nodule assessment test Afirma (CPT code 81545) and in the fall issued a rate of $2,864. Around 20 percent of Afirma test volume is covered under Medicare. As such Veracyte submitted a reconsideration request with CMS, which has resulted in a new price of $3,200.

The company communicated to CMS that the previously released lower gapfill rate was not supported by its own gapfill criteria, a process through which test pricing is determined by taking the median of the amounts submitted by Medicare contractors. "With final Medicare rates in place for 2017 and market-based pricing to begin in 2018 through the Protecting Access to Medicare Act, we believe that Medicare reimbursement for the Afirma GEC will now remain stable for the foreseeable future," Veracyte CEO Bonnie Anderson said in a statement.

PAMA will establish a market-based payment system for lab tests in 2018, where Medicare pricing for tests under the clinical lab fee schedule will be determined based on a weighted median of private payor rates. Under that law, CMS cannot reduce payment for a test by more than 10 percent in the first three years after implementation and by more than 15 percent in the subsequent three years.

CareDx is another company that has been unhappy for some time with CMS pricing of AlloMap, an MAAA to identify heart transplant recipients at low risk of rejection. At one point, AlloMap (CPT code 81595) was facing a 77 percent cut to $645, down from a historical price of $2,821. Then, in preliminary gapfill pricing CMS proposed a rate of $732, which following CareDx's objections the payor raised to $1,921 in the fall.

Still, CareDx objected. Now it seems the company has successfully convinced CMS to maintain the price of AlloMap at the historical rate of $2,821.

Other tests that will see price increases in 2017 include Biodesix's lung cancer aggressiveness test Veristrat (CPT code 81538), which CMS had priced at $1,342, but now has increased to $2,112; Genomic Health's Oncotype DX colon cancer recurrence risk test (CPT code 81525) saw an increase from $2,062 to $3,104; and BioTheranostics' CancerTYPE for diagnosing metastatic tumors of uncertain origin (CPT code 81540) had its payment bumped up from $2,355 to $2,900.

Final 2017 CMS pricing will remain at $925 for Invitae's next-generation sequencing test for hereditary breast cancer-related disorders (CPT Code 81432), an amount the company was pleased with when CMS announced it in September, since it was pushing for a price of $950. CardioDx's coronary artery disease risk test Corus CAD (CPT code 81493) will stay at $1,035, as will the price of Vectra DA (CPT Code 81490), marketed by Myriad Genetics' subsidiary Crescendo Bioscience at $587.

CMS did increase pricing for fetal aneuploidy trisomy risk testing (CPT code 0009M) from $133 to $598. In a note to investors, Piper Jaffray analyst William Quirk wrote that the government payor's final 2017 rates for non-invasive prenatal testing for Trisomy 21 and microdeletion is now $797.

"We anticipate state Medicaid programs to adjust their prices over 2017 to reflect the new Medicare rate (again, at a discount)," Quirk wrote, estimating that the average 2018 Medicaid rate will be between $500 and $600. Since 48 percent of US births are covered under Medicaid and payment rates are influenced by Medicare, Quirk saw the new price as a positive for companies like Natera, Laboratory Corporation of America, and Illumina.