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Exact v Humana Lawsuit Reflects Genetic Testing Firms' Deepening Adversarial Relations With Payors

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NEW YORK (GenomeWeb) – Exact Sciences believes national insurer Humana has been maligning its colon cancer screening test and illegally denying claims for it.

In a complaint filed earlier this month with the Louisville division of the District Court for the Western District of Kentucky, Exact accused Humana of circulating fliers that falsely told healthcare providers that Cologuard is “ineffective" and not covered. Exact estimates Humana owes it upwards of $800,000 for more than 4,600 Cologuard tests performed since October 2014 (see PDF below).

The case is the latest example of a genetic testing firm butting heads with a payor. Insurers say they deem genetic tests experimental and not covered when test makers haven't provided evidence to the contrary. Test makers argue there is often evidence, and even when that evidence is sufficient for US Food and Drug Administration approval and inclusion in guidelines, it's insufficient for payors looking for reasons to not cover their tests. Payors point out that FDA and groups developing medical guidelines don't evaluate tests in terms of clinical utility and cost effectiveness, factors that payors use to determine coverage (see story here).

Exact v Humana suggests that provisions in the Affordable Care Act (ACA) specific to the coverage of preventive services could add another layer of complexity to an already strained relationship. Amid heightening tensions over a variety of reimbursement issues, some experts foresee more genetic testing firms taking payors to court.

Exact was not willing to comment for this article beyond the information in its complaint. Humana said it does not comment on pending litigation.

Exact v Humana

Exact has accused Humana of denying Cologuard claims mainly on the grounds that the test is "experimental or investigational," despite having FDA approval, being included in guidelines, and having support in several state mandates. "Humana has improperly and illegally refused to pay," Exact said, for claims under commercial, Medicare Advantage, and other plans.

If there is a state law that says cover it, and the insurer isn't, then the insurer may be held accountable for that.

The firm's legal counsel sent a "cease and desist" notice in January, asking Humana to stop distributing fliers to doctors calling the test “ineffective" and not covered, and communicate the correct information. Humana replied that any miscommunication was unintentional and that it isn't distributing that version of the flier. Furthermore, according to Exact, Humana agreed to "reprocess" denied Cologuard claims since Jan. 1.

However, Exact wants Humana to pay for all the claims it has denied since 2014 in Kentucky and eight other states, where there are mandates that the company believes supports Cologuard's coverage as a colorectal cancer screening tool. The firm also wants compensation for lost profits, as well as contractual and compensatory damages.

Exact believes Humana has a national policy to deny all Cologuard claims, despite evidence supporting its efficacy as a colorectal cancer screening tool. The non-invasive, stool-based DNA test was the first medical product that the FDA and the Centers for Medicare & Medicaid Services simultaneously approved and issued a national coverage determination (NCD) for.

In garnering parallel approval in 2014, Exact conducted a large pivotal study involving 10,000 participants, called DeeP-C, in which Cologuard identified 92 percent of cancers, 42 percent of pre-cancers, and had a specificity of 87 percent. The test identified 13 percent of study participants as having cancer or precancer when they did not. 

Moreover, Exact points out in its complaint that the American Cancer Society's colorectal cancer screening guidelines recommend stool DNA testing, and Kentucky and other states have issued mandates for coverage of screening modalities backed by the American Cancer Society and other bodies. 

However, the US Preventive Services Task Force in 2008 gave an "I" rating for stool DNA testing, noting there was insufficient evidence to determine the benefits and harms of such tests for colorectal cancer screening. Last year, in a draft update to those guidelines, USPSTF didn't rate Cologuard at all, but discussed it as an "alternative test" that "may be useful in select clinical circumstances," without outlining what those circumstances were.

Under the ACA, insurance companies must cover any preventive service that the USPSTF determines will benefit the patient and gives an "A" or "B" rating. This makes the USPSTF "a gatekeeper in terms of what gets mandated and what doesn't," Jennifer Wagner, a lawyer and associate director of bioethics research for Geisinger Health System, told GenomeWeb. "So, the [USPSTF] decision really carries a lot of weight."

However, the ACA doesn't restrict insurers to covering only those services recommended by the task force. Although Cologuard doesn't have an "A" or "B" rating from USPSTF, by highlighting state mandates, FDA approval, and the NCD, "Exact thinks it has enough to show that [its] test is otherwise in accordance with medical guidelines," Wagner said.

Regardless of how this case ends, insurers have a number of ways in which they can direct utilization of medical services under the law. Although Medicare Advantage Plans have to follow NCDs from CMS, insurers can tell contracted providers what services they prefer.

For example, Humana can indicate a preference for one type of test over another. "But a provider has the right to perform any Medicare-covered service, and an insurer cannot be misleading in recommending a different service," said Michael Adelberg, who before joining the advocacy firm FaegreBD Consulting held a number of senior posts within CMS.

In the private insurance market, the ACA requires that plans offered through health exchanges provide essential benefits in 10 broad categories, including prevention and wellness services. States can choose a benchmark plan in which to define these benefits. Based on that benchmark, insurers can create health plans with "actuarially equivalent" benefits and swap certain services. For example, if an insurance carrier doesn't like a particular test included in a benchmark plan, it can submit an "actuarially equivalent" benefit for state regulator approval.

State mandates would trump all this, however, and Exact's complaint cites several (see PDF below) that the firm believes requires coverage of Cologuard. "If there is a state law that says cover it, and the insurer isn't, then the insurer may be held accountable for that," Adelberg said.

Insurance companies are understandably trying to find ways to not have those costs, but it really butts heads against this whole idea of increasing access to prevention.

Divergent aims

What guidelines say about Cologuard is important to Exact's case against Humana. But the underlying issues also illustrate how guidelines developing bodies and payors have divergent aims.

Groups that come up with screening guidelines often don't write them with insurance reimbursement in mind, according to Anya Prince, a post-doctoral research fellow at the University of North Carolina-Chapel Hill's Center for Genomics and Society. "[Guidelines] are written based on the medical evidence and often are written quite broadly to encourage people to get screening," she told GenomeWeb. "What this case shows is that disconnect between really wanting specificity for insurance reimbursement and the laws that reference these broader recommendations."

Prince wrote about this problem in the Journal of Law and the Biosciences last year. In colorectal cancer, for example, after the ACA went into effect, insurers began to cover colonoscopies free of charge in line with USPSTF recommendations. However, Prince pointed out in her paper that some insurers began charging patients to remove polyps discovered during the colonoscopy so they could be analyzed for cancer.

HHS eventually clarified that insurance companies couldn't charge patients for polyps removed during a preventive colonoscopy, but "it does show a tension," Prince said. "Payors have to pay all costs … so, insurance companies are understandably trying to find ways to not have those costs, but it really butts heads against this whole idea of increasing access to prevention."

This tension may be at play in the case of Cologuard. A positive test with Cologuard must be confirmed by colonoscopy.

After reviewing data on Cologuard, USPSTF didn't like the fact that when compared with other stool-based screening tests and colonoscopy every 10 years, Cologuard resulted in more lifetime colonoscopies per life-year gained. The task force further noted that because specificity of stool-based DNA testing was lower than other fecal immunochemical tests, there would be more false-positives, leading to more unnecessary colonoscopies, which carries greater risks for adverse events.

"Payors could definitely be concerned about that," Prince said. They could argue, for example, that follow-up colonoscopies after Cologuard is a diagnostic and not preventive, which would put patients on the hook for additional payments.

The insurance industry will likely continue to be opportunistic when interpreting guidelines. "It's about buying the most effective care in a cost-efficient way," said Adelberg, who has 15 years of experience as a health insurance regulator. "They're going to be reluctant if they don't think it's in their financial best interest to cover something, and they'll jump all over it if they do think it's in their financial best interest to cover it."

In the genomics space, insurers are starting to explore when it might be in their best interest to cover advanced sequencing tests. For example, UnitedHealthcare last year agreed to cover Foundation Medicine's genomic profiling test in advanced lung cancer, and this year Independence BlueCross said it would cover NantHealth's whole-genome sequencing test in cancer scenarios with limited options.

Business Impact

If you just build a better mousetrap, you can reason with insurers.

Despite some positive signs, reimbursement remains a headwind for most genetic testing businesses. For Exact, suing Humana might be a way to raise awareness among other payors and the physician community of all it has done to establish the clinical validity and utility of its test.

"I think Exact is trying to point out that the science is changing, the recommendations of these various professional organizations are showing that they have faith in this test, therefore, it shouldn't be up to the insurers to say what is effective," Wagner said. "If the insurer is calling the test 'experimental,' Exact is pushing back and saying, 'That's not the insurer's call. CMS has said we're effective, and FDA has said we're effective, and [the American Cancer Society] is saying the test should be part of standard care.'"

If Exact's case is successful, she added, "it could have implications for others in the [genetic testing] industry."

"I could definitely foresee more cases like this," Prince said. "It's really a make or break for these companies, whether insurance companies will reimburse [their tests], because that's going to affect whether physicians are recommending the service. There's a lot of economic pressure for the company."

If Humana continues its policy of denying Cologuard claims, Exact believes it will cause "irreparable harm" to its business. Humana, which Aetna announced it would buy last year, is one of the largest insurers in the US, and is the second largest carrier of Medicare Advantage plans.

According to Exact, Humana has denied 120 test claims worth nearly $70,000 in Kentucky, and 293 claims in eight other states with similar state coverage mandates totaling nearly $169,000. Exact has appealed Humana's claim denials more than 1,000 times, and the insurer has still rejected around half of them. The test maker also asserts that Humana has underpaid around 350 Cologuard claims, for which it owes nearly $65,000.

Combining Medicare and private payor coverage, Exact estimates currently 110 million covered lives have access to its test. At the annual JP Morgan Healthcare Conference last month, Exact CEO Kevin Conroy said he expected "modest improvement in the payor landscape" in 2016, but he wasn't optimistic that the USPSTF would change its position on Cologuard. The task force is slated to finalize its colorectal cancer screening guidelines by year end.

This may impact reimbursement, but according to Conroy, the firm "did not see a fall off in test ordering after the guidelines were published" last October. According to Exact's preliminary report on its 2015 financials, nearly 27,000 physicians ordered Cologuard, with a 27 percent increase between the third and fourth quarter. However, the company sold 38,000 Cologuard tests in the fourth quarter, short of the expected 42,000 tests.

Meanwhile, the company is continuing to develop evidence on Cologuard's utility and cost-effectiveness. In December, the company published modeling data in Clinical Colorectal Cancer that showed screening with Cologuard every three years reduces colorectal cancer incidence by 57 percent and mortality by 67 percent compared to a 65 percent and 73 percent reduction, respectively, for colonoscopy every 10 years.

In the same study, researchers also reported that at a $600 price tag for Cologuard and $1,500 for colonoscopies after a positive test, stool-based DNA screening every three years costs $11,313 per quality adjusted life year compared to no screening — below what insurers have been willing to pay for other screening tests.

Adelberg believes that because developers of genetic tests are relative newbies in the broader device industry, they'll have to get better at communicating the value of their tests to payors. "If you just build a better mousetrap, you can reason with insurers," he said. "It's all about the numbers. Just make a good case."

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