This story originally ran on March 6.
Vermillion said this week that it has received a Category 1 Current Procedural Terminology code from the American Medical Association for its OVA1 ovarian cancer detection test.
The company believes that the code "will help streamline claims processing and accelerate further coverage and adoption by private payers," Vermillion CEO Gail Page said in a statement.
During an investor call last month discussing Vermillion's Q4 2011 results, Page said that obtaining a CPT code for the test was a primary goal for the company in 2012.
Coverage and reimbursement have proven challenges for OVA1 since its launch, leading in recent months to what Page described on the Q4 call as "a plateau" in sales of the test (PM 2/24/2012).
The CPT code, which will become effective Jan. 1, 2013, could aid the company's efforts to obtain coverage from private payers. It will likely have little impact on Medicare's coverage of OVA1 in the near term though, given that the Centers for Medicare & Medicaid Services has not implemented AMA's codes in its fee schedule yet.
Medicare reimbursement levels, in particular, have been a source of investor concern of late, with Switzerland-based investment advisor George Bessenyei asserting in December that he had learned “from persons with knowledge” that Medicare has been denying OVA1 claims at a rate of more than 80 percent (PM 12/23/2011).
Vermillion has maintained that due to the structure of its OVA1 licensing deal with Quest Diagnostics, it has limited visibility into reimbursement levels for the test. According to the company, it was due at the end of February to receive figures from Quest that would provide better clarity on OVA1 reimbursement levels for the year and their effect on revenues. It has not yet disclosed these figures, however.