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Medicare Administrative Contractor Palmetto Finalizes Coverage of Molecular Testing for Organ Transplant Rejection

NEW YORK – Medicare Administrative Contractor Palmetto GBA on Thursday released a finalized limited coverage decision for molecular tests to evaluate and manage solid organ transplant patients.

Under the decision, covered tests must provide information about either active rejection status or cellular or antibody-mediated rejection status. The intended use of the test must be to assist in the evaluation of the adequacy of immunosuppression where a noninvasive or minimally invasive test can be used instead of a tissue biopsy in a patient where a tissue biopsy would be used to make a management decision for immunosuppression; as a rule-out test for active rejection in patients with clinical suspicion of rejection with a noninvasive or minimally invasive test to make a clinical decision regarding a biopsy; for further evaluation of allograft status for the probability of allograft rejection after a physician-assessed pretest; or to determine rejection status in patients that have had a biopsy with inconclusive or insufficient results.

Covered tests must also demonstrate analytical validity and have demonstrated equivalence in sensitivity and specificity of detecting allograft rejection to other already-covered tests with the same intended use measuring the same or directly comparable analytes. A patient can only receive one of these tests unless a second test that also meets the criteria is reasonable and necessary "as an adjunct to the first test," according to the LCD.

For minimally and noninvasive tests, a clinician must consider the benefit-to-risk profile of the test to be more favorable than that of a tissue biopsy. The LCD applies to services performed on or after June 6.

CareDx said in a statement that coverage for its AlloMap and AlloSure heart transplant tests will remain unchanged. Piper Sandler analyst Steven Mah wrote that the LCD "substantially moves up the timing of additional organ types for CareDx," such as lung and liver tests.

Meanwhile, Puneet Souda, an analyst at SVB Leerink, wrote in a note that the decision is a positive for Natera and its Prospera kidney transplantation rejection test. Souda said the decision "lays groundwork for robust reimbursement for the transplant rejection liquid biopsy market overall."

In Thursday afternoon trade on the Nasdaq, shares of CareDx were up 1 percent at $76.03, after hitting a high of $78.08 earlier in the day, while shares of Natera were down 1 percent at $108.30, after trading as high as $111.50 during the session.