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CMS Contractors Issue Prices for Few MDx CPT Codes; Most Large Sequencing Panels Remain Unpriced

NEW YORK (GenomeWeb) – The Centers for Medicare and Medicaid Services this week released reimbursement prices from local contractors for 10 of 29 new CPT codes describing clinical laboratory diagnostic tests.

Medicare Administrative Contractors didn't price codes describing whole-genome or exome sequencing, or cancer panels gauging 51 or more genes. One contractor, Cahaba, priced codes describing cancer panels gauging between five and 50 genes for $90.

According to industry observers this is well below what labs are currently billing CMS for multigene panels by stacking analyte-specific CPT codes. In a note to investors, analyst William Quirk from the investment firm Piper Jaffray estimated that for cancer panels assessing between five and 50 genes, labs bill CMS around $2,564 via code stacking.

A code describing Genomic Health's Oncotype DX breast cancer recurrence test received prices of between $2,000 and $3,400 from several of the contractors.

CMS placed the 29 new codes for gapfill pricing by its contractors in January. The gapfill process involves MACs serving 11 local regions setting initial pricing for a code based on a variety of inputs, such as the resources required to perform testing and payments made by other payors. After a year, CMS uses the initial rates from contractors to establish a national reimbursement rate.

But as Medicare expert Bruce Quinn from the law firm Foley Hoag recently pointed out in a blog post, "not one of the 29 codes was priced by all MACs." The agency explained that several of the codes may not be priced by a MAC because the test lacks a benefit category; the test doesn't have "high quality" published evidence of clinical utility; the test has limited "medical necessity," meaning that knowing the sequencing test result will not impact patients' outcomes; or the MAC hasn't received a technical assessment for the test.

CMS will accept public comments on these prices until mid-July and release final median pricing and the national limitation amount for these codes in September. The pricing will go into effect as of January 2016.

Meanwhile, with the "Protecting Access to Medicare Act of 2014" (PAMA) being signed into law last year, CMS is expected to move payment for molecular tests to a market-based payment system starting in 2017. Under PAMA, CMS will pay labs for tests according to the weighted median of private payor rates, and labs will have to begin reporting rates from payors to CMS in 2016. CMS is expected to issue instructions to labs in this regard at the end of June.