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Exact Sues Humana for Denying Cologuard Payment

NEW YORK (GenomeWeb) – Exact Sciences has sued insurer Humana for denying payment of its colorectal cancer test, Cologuard.

In the suit, filed with the Louisville division of the District Court for the Western District of Kentucky, Exact alleges that the insurer has been denying claims for Cologuard since at least October 2014 through commercial, Medicare Advantage, and other plans. The company estimates Humana owes it upwards $800,000 in payment for 4,664 Cologuard tests it has performed since that time.

The company believes Humana is in violation of the Employee Retirement Income Security Act and state laws. "The laws of many states in which Humana writes plans … specifically require insurers such as Humana to cover costs for colorectal cancer screening tests recommended by the American Cancer Society or otherwise in accordance with accepted medical practice guidelines for colorectal screening, like Cologuard," Exact states in its complaint.

According to the company, Humana has cited a number of reasons for not paying for Cologuard, including that the tests are "experimental or investigational." Furthermore, Exact accuses the insurer of "adopting the official policy of excluding Cologuard under its commercial plans," and of distributing a flyer to healthcare providers in Kentucky and possibly in other states, to inform them that the test is ineffective and not covered.

"Humana’s contention in its physician flier is false. In Kentucky and the other [states], Humana is required by law to cover Cologuard and, therefore, Cologuard must be covered under the commercial plans in those states," the firm said in its complaint.

Cologuard is a noninvasive screening test that gauges altered DNA in stool associated with colon cancer or precancer risk. Exact asserts in its complaint that its test is effective, and notes it was the first test to successfully undergo parallel review with the US Food and Drug Administration and the Centers for Medicare & Medicaid Services.

In order to garner parallel approval, Exact conducted a large pivotal study involving 10,000 participations, called DeeP-C. Based on the results, the FDA approved the test and CMS granted a positive national coverage determination on the same day in August 2014.

Although, the test has approval from FDA, a NCD from Medicare, and is endorsed by ACS, the US Preventive Services Task Force "did not give a clear endorsement to the test in 2015," Medicare expert Bruce Quinn pointed out in his blog. "This is important because the Affordable Care Act requires most health plans to cover USPSTF endorsed screening tests within a year or two."

The company is asking the court to stop Humana from continuing its policy, pay for benefits in line with the law, and pay for the tests it hasn't yet reimbursed. Exact is also seeking compensation from Humana for lost profits, as well as contractual and compensatory damages.

For in-depth coverage of this case, see premium story.