Medicare Bumps Up Final Pricing for Certain NGS Tests and MAAAs, But Not Enough, Some Say

NEW YORK (GenomeWeb) – The Centers for Medicare & Medicaid Services last week issued final pricing determinations for several new CPT codes describing gene sequencing procedures and multi-analyte algorithm-based assays (MAAAs).

Since CMS released initial pricing for these codes over the summer, many labs had been working with the agency during the comment period with the aim of increasing payment. The final prices (see PDF below) suggest that CMS has been swayed by labs, and in many cases increased rates for some of the CPT codes.

For example, CMS raised the price of CPT code 81432, describing next-generation sequencing tests for hereditary breast cancer-related disorders, from its proposed rate of $623 to $925. Invitae, which provides NGS testing for such disorders, had been urging CMS to price that code at $950. 

Invitae CEO Randy Scott lauded CMS and its contractor Palmetto GBA, which runs the MolDx program for establishing clinical utility and technical assessment requirements for molecular tests, for instating policies that are lowering the cost of genetic testing and expanding access to multi-gene NGS panels.

"In the past year, Medicare and the Palmetto MolDX program have significantly reduced the cost of genetic testing, expanded access to multi-gene panels, and restructured their billing and coding policy to a more modern system," Scott said in a statement. "We believe this new, improved set of policies apply to all next-generation DNA sequencing assays for breast and ovarian cancer and will result in significant healthcare savings while improving patient care."

A number of other tests will also see a bump up in Medicare payments. CMS final pricing for CardioDx's coronary artery disease risk test Corus CAD (CPT code 81493) increased from $741 to $1,035; Veracyte's thyroid nodule assessment test Afirma (CPT code 81545) from $2,240 to $2,864; Biodesix's lung cancer aggressiveness test Veristrat (CPT code 81538) from $283 to $1,342; Genomic Health's Oncotype DX colon cancer recurrence risk test (CPT code 81525) from $849 to $2,062; BioTheranostics CancerTYPE for diagnosing metastatic tumors of uncertain origin (CPT code 81540) from $1,522 to $2,355.

Meanwhile, CareDx, which markets AlloMap, an MAAA to identify heart transplant recipients at low risk of rejection, issued a statement calling on CMS to reverse its final pricing determination for that test. Previously, AlloMap was facing a 77 pricing cut to $645, down from a historical price of $2,821. Then, in preliminary gapfill pricing CMS proposed a rate of $732. 

CMS' final rate for AlloMap (CPT code 81595) now stands at $1,921, but CareDx maintains that this payment doesn't appropriately capture the value of its test. The company pointed out in a statement that this new price still represents a 32 percent decrease, which would not be permitted under the Protecting Access to Medicare Act of 2014, a law that will establish a market-based payment system for lab tests in 2018. Under PAMA, 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. 

"This decision is unwise, unfair, and misaligned with President Obama's Precision Medicine Initiative," CareDx CEO Peter Maag said in a statement. "If CMS won't ensure that medical innovators are compensated for their investments, there won't be medical innovators. If this reduction remains unchanged, it will send a very clear signal to other companies hoping to improve the level of care and improve long-term outcomes and block discoveries supported by NIH from being translated into the practice of medicine."

In final pricing, CMS also maintained its final pricing for the rheumatoid arthritis test Vectra DA (CPT Code 81490), marketed by Myriad Genetics' subsidiary Crescendo Bioscience, at $587, and for fetal aneuploidy trisomy risk testing (CPT code 0009M) at $133.

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