NEW YORK – Medicare Administrative Contractor Novitas Solutions on Thursday announced that a previous local coverage determination that rescinded coverage for multiple cancer genetic tests would no longer go into effect later this month.
The original final LCD, posted at the beginning of June, rescinded coverage for Castle Biosciences' DecisionDx-Melanoma and DecisionDx-SCC tests; Pacific Edge Diagnostics' Cxbladder Detect, Enhanced Detect, Monitor, Enhanced Triage, and Resolve assays; Interpace Biosciences' PancraGen; Clinical Genomics' Colvera; Abbott's UroVysion fluorescence in situ hybridization test; and the University of Pittsburgh Medical Center's ThyroSeq Cancer Risk Classifier and PancreaSeq Genomic Classifier.
According to Novitas, the LCD will no longer become effective on July 17 and a new draft LCD will be published for comment and presented at an open meeting in the near future.
In addition to the specific tests for which it rescinded coverage, Novitas also noted in the original LCD that tests are not medically reasonable or necessary if they have unestablished analytical validity, clinical validity, or clinical utility, if the interventions aren't identified by ClinGen, National Comprehensive Cancer Network, or OncoKB as demonstrating actionability in clinical decision making, or if patients do not have either an established diagnosis of cancer or substantiated suspicion of cancer.
Testing of asymptomatic patients for screening and repetitions of the same genetic test on the same genetic material also are not medically reasonable or necessary, according to the original LCD.
In a statement released Thursday, New Zealand-based Pacific Edge Diagnostics said that it received an email from its lawyers that US Department of Health and Human Services Associate General Counsel Janice Hoffman said that the LCD "will not proceed as is."
Pacific Edge CEO Peter Meintjes said the company is "confirmed in our position that a more robust procedure that includes open meeting and public comment was needed and thank(s) Novitas for the opportunity to discuss the substance of their evidentiary review of Cxbladder products with them."
In a note to investors, Craig-Hallum analyst Alex Nowak wrote that it is "difficult to determine" if the withdrawal of the original LCD will lead to a decision shift for Castle Bio or Pacific Edge's tests, but "at a minimum it will require these tests' coverage policies to go through the formal draft, comment period, then the final rulemaking process." That requirement "buys those companies at least a year to present a rebuke to Novitas to continue test coverage," he added.
In Friday morning trading on the Nasdaq, Castle Biosciences' share price was up 42 percent to $18.84.