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Experts Discuss Issues Surrounding Reimbursement, Implementation of Genomic Tests


NEW YORK (GenomeWeb) – Despite the proliferation of next-generation sequencing-based diagnostic tests, laboratories still struggle to get reimbursed for such tests, according to experts.

During a panel discussion at Cambridge Healthtech Institute's Clinical Genome Conference in San Francisco this week, commercial and academic test developers, researchers, and healthcare consultants discussed the state of genomic testing.

Last year, the American Medical Association approved new codes for next-generation sequencing-based tests, although prices have not yet been set for many of the codes, including whole-genome sequencing tests and large panels.

"The last 12 to 24 months have been the most difficult times that I've seen for the [molecular] diagnostic industry," Rina Wolf, vice president of commercialization strategies, consulting and industry affairs at XIFIN, said during the discussion.

Xifin provides a cloud-based laboratory billing platform for diagnostic service providers. Wolf said that nearly 70 percent of diagnostic claims outside of those filed by Quest Diagnostics and Laboratory Corporation of America pass through the Xifin system, giving the firm the "ability to understand what's happening on the payor side and how claims are being received."

When a payor is aware that NGS tests are being ordered, unless that payor has a specific coverage plan in place, payment is often denied on the first pass, or the payor requests additional information, Wolf said.

In addition, Wolf added, tests that have not yet been priced by MACs, are among the ones that are most often denied. One MAC priced a solid tumor gene panel assessing between five and 50 genes at $90, she said, well below the actual cost of running such tests. Another payor priced similar tests at just under $800, she said, which is better, but still below average rates for such tests.

Stephen Kingsmore, executive director of panomic medicine at Children's Mercy Hospital in Kansas City, Missouri, said that the hospital has had mixed results with reimbursement. 

For the last four-and-a-half years, his group has been offering a gene panel test for severe childhood genetic disorders, called TaGSCAN, for Targeted Gene Sequencing and Custom Analysis. The panel assesses over 500 genes and is run within a CLIA certified and CAP accredited lab. The lab receives about 30 orders per month for the panel. Reimbursement rates for the panel have been "interesting," Kingsmore said. Some payors are reimbursing, but others are not.  The reimbursement rates are also highly variable, he said, and no payor ever reimburses 100 cents to the dollar and often rates are as low as 50 cents to the dollar, he said.

In addition, Kingsmore's laboratory offers a rapid whole-genome sequencing test for babies admitted to the neonatal intensive care unit with suspected genetic disease. Although the test is diagnostic and results are returned to the family, because the hospital is performing it in the context of a clinical trial to assess clinical utility and cost-effectiveness, the test is funded through grants and other funding avenues, Kingsmore said.

Mark Monae, chief medical officer at CardioDx, said that the firm has had mixed experiences with obtaining reimbursement for its gene expression test Corus CAD to test for obstructive coronary artery disease. Currently, he said both Aetna and Medicare cover the test, but the company is not being reimbursed by other payors.

The reimbursement landscape can be tricky to navigate and puts test developers in a Catch-22: developers must demonstrate clinical utility and cost-effectiveness to get covered, but demonstrating such utility requires running the test, Monae said.

One major bottleneck, according to David Moscowitz, a nephrologist and founder and CEO of GenoMed, is that outcomes data is sparse, and not even CMS tracks it, making it difficult to assign value to NGS-based testing.

However, a number of groups are aiming to change this and develop clinical utility and cost-effectiveness models. For instance, Katherine Tynan, a consultant for clinical diagnostics companies and a member of the economic affairs committee for the Association for Molecular Pathology, said that AMP, in conjunction with Boston Healthcare Associates and her firm Tynan Consulting, developed models to define the real-world cost of various sequencing-based tests, as well as the value of such tests.

The group developed models for a hearing loss panel, exome sequencing for developmental delay, and a tumor panel for non-small cell lung cancer patients with advanced disease. Tynan said the goal of such models is to help laboratories make the case for such tests to payors. The economic models can be downloaded from AMP's website.

Caroline Bennette, patient-centered outcomes research scholar at the Fred Hutchinson Cancer Research Center, spoke of a project she participated in while at the University of Washington as part of the National Human Genome Research Institute's Clinical Sequencing Exploratory Research programs. She and other researchers were assessing the impact of returning incidental findings, and they found that in some cases returning such findings from exome sequencing tests could be cost effective since otherwise serious diseases could be prevented.

Kingsmore's trial of rapid whole-genome sequencing for babies in the NICU is another example of a trial to examine the utility and cost effectiveness of such genomic tests.

In a study published in Lancet Respiratory Medicine in April, Kingsmore's group did a retrospective analysis of its cases between November 2011 and October 2014 and found that whole-genome sequencing had a diagnostic rate of 57 percent, compared to just 9 percent with standard genetic testing. In 20 percent of the babies, the diagnosis led to a "favorable impact on management." Some diagnoses came with a "hopeless prognosis," but Kingsmore argued that even in those cases, the diagnosis still gave the family an answer and enabled the parents to bond with their child and gave them time to grieve and prepare for the child's eventual death.

Through the NHGRI's Newborn Sequencing in Genomic Medicine and Public Health program, Kingsmore's lab is one of four newborn genome sequencing projects. In a prospective randomized study, Kingsmore's group will compare their STAT-seq test to the standard of care for diagnostic rate, time to diagnosis, change in care, impact on morbidity and mortality, cost, and other criteria.