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Veracyte Lung Cancer Test Gets Draft Local Coverage Determination From Medicare Contractor

NEW YORK (GenomeWeb) – Veracyte announced today that Medicare contractor Noridian has issued a draft local coverage determination (LCD) for its Percepta Bronchial Genomic Classifier.

Noridian, the nation’s largest Medicare Administrative Contractor (MAC), is one of four MACs (with Palmetto GBA, CGS, and WPS) in the national Molecular Diagnostic Services (MolDx) program from which Veracyte had anticipated receiving draft local coverage determinations for Percepta.

Noridian took the lead, according to Veracyte, and it expects that the remaining three MACs will also post LCDs soon.

"This is a tremendous achievement for the company," Bonnie Anderson, president and CEO of Veracyte, said in a statement. "The strength of the evidence supporting Percepta met a high bar for coverage established by the Medicare MolDx Program and serves as a solid foundation for commercial expansion in 2017. We expect that the other MACs that participate in the Palmetto GBA-administered MolDx Program and typically follow its policies will also issue local coverage determinations for Percepta in the future."

When finalized, the LCD would enable coverage for more than 30 million — or over half — of the Medicare beneficiaries in the United States.

Lung cancer screening programs have been shown to save lives, which is why Medicare dramatically expanded coverage for screening last year, according to Veracyte. One of the biggest concerns that has dampened screening adoption is the risk and dilemma of finding nodules that are not clearly benign or cancerous, Anderson told GenomeWeb. This common occurrence can lead to unnecessary, costly, and risky surgeries for patients, in addition to anxiety and uncertainty for patients and physicians, she added.

Percepta, a 23-gene classifier, was launched in 2015 and is among first genomic tests for use in lung cancer diagnosis to achieve this Medicare coverage milestone, according to Veracyte. The test is supported by multiple published studies demonstrating its ability to make lung cancer screening and diagnosis more accurate and safe by reducing unnecessary surgeries on suspicious lung nodules found on CT scans.

The classifier uses proprietary genomic technology to detect molecular changes that occur in epithelial cells lining the respiratory tract, in current or former smokers with lung cancer. It is designed to determine the likelihood of cancer without the need to take a direct sample of the nodule or lesion.

The draft LCD specifies coverage for the use of Percepta in patients with an inconclusive bronchoscopy and identifies those who may receive CT surveillance in lieu of further invasive biopsies or surgery.

The coverage determination posted online by Noridian establishes the Percepta coverage policy for Medicare beneficiaries in the MAC's 14-state jurisdiction and provides coverage for the more than 17 million Medicare Advantage members nationwide, Veracyte said. Noridian's jurisdiction includes California, where Veracyte performs and bills for the molecular test out of its South San Francisco CLIA-certified laboratory.

Under CMS rules, the draft local coverage determination is open to a 45-day public comment period. Veracyte said that it anticipates the final LCD will be issued and go into effect around the beginning of next year.

Clinical validation data from two prospective, multicenter studies were published in July 2015 in the New England Journal of Medicine and, and showed that Percepta identified patients at low risk of cancer with a high degree of accuracy represented by a negative predictive value of 91 percent. Combined with bronchoscopy, the test increased cancer detection sensitivity to 97 percent from 75 percent through bronchoscopy alone, the firm said, and the data suggest that use of the Percepta test could reduce unnecessary surgeries and other invasive procedures by 50 percent.

In early morning trade on the Nasdaq, shares of Veracyte were up more than 5 percent at $6.11.