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MolDx Policing CPT Code Stacking for Panel Tests; Instructs Labs to Apply for Unique Identifier


NEW YORK (GenomeWeb) -- Medicare contractor Palmetto GBA recently informed labs and test developers via its MolDx program that they must register and bill panel tests that gauge multiple molecular markers using a single CPT code and a unique identifier.

Palmetto, which runs the MolDx program for the Centers for Medicare & Medicaid Services, is expecting labs to comply with this requirement fairly quickly. Starting Jan. 1, the Medicare contractor said it will reject claims for tests that are performed as panels and billed with many CPT codes for each biomarker in the panel.

Reimbursement experts advising molecular diagnostics firms have voiced concerns about this policy and the manner in which CMS has implemented it. "We are concerned that this will be a 'repricing' exercise," Rina Wolf, VP of commercialization strategies, consulting and industry affairs for XIFIN, told GenomeWeb in an email. XIFIN provides financial management services to the diagnostics industry.

Palmetto is implementing this policy after an analysis of claims submitted by labs to the MolDx program showed that labs have been submitting claims for "multiple biomarker 'panels' as individual tests similar to the submission of the previous stacking codes." The American Medical Association's development of molecular pathology CPT codes came after payors wanted labs to stop submitting claims for tests with stacked or bundled older CPT codes. This practice of "stacking" codes kept payors from tracking which specific tests were performed for patients, which in turn obfuscated whether a particular test was done in a medical context that aligned with the payor's reimbursement policy.

However, the AMA's analyte-specific CPT codes have enabled labs to continue to bundle codes for panel tests that analyze multiple markers. Although CMS participated in the multi-stakeholder process that led to the development of these analyte-specific codes, Palmetto is now asking labs to stop this practice of stacking codes for panel tests, and to ensure that they do, the contractor is requiring labs to register the entire panel and receive a unique z-code for it.

Labs have countered that they're just using the codes that the AMA gave them. "Genelex and other molecular diagnostics laboratories have been billing Medicare for tests individually as was required," Jodie Cadieux, Genelex's director of marketing, told GenomeWeb. Genelex is a pharmacogenetic testing firm that markets panel tests, such as YouScript, which gauges a variety of CYP450 markers, as well as a cardiology add-on panel that analyzes Factor II, Factor V, and MTHFR, and a psychiatry panel that analyzes MTHFR and FHTT/SLC6A4.

Wolf similarly pointed out that the AMA developed the molecular pathology codes with stakeholder input, including CMS, so the agency knew very well the structure of the coding system, and how labs could use them. "Labs are currently submitting appropriate analyte-specific codes when they are available," she said. "This was the purpose of the whole [molecular pathology] coding exercise, in which CMS representatives played an active role."

Ultimately, other industry observers GenomeWeb has spoken to about the issue believe that with this latest MolDx policy, CMS is skirting AMA-issued codes because labs using them can seek more reimbursement than the agency may be willing to pay for a panel test. For example, if a lab submits eight different CPT codes to garner reimbursement for a panel that gauges eight genes at an average price of $200 per gene, it can amount to a sum that CMS considers too high. With a single code identifying a particular panel, Palmetto has more discretion over the amount to reimburse.

"It's unclear what effect the single code will have on reimbursement since rates are not yet determined, though we would hope rate determination would be issued fairly and quickly so patient care is not interrupted," Cadieux said. Genelex is not located in Palmetto's Medicare coverage jurisdiction, but in Noridian's. Still, based on the MolDx policy, Cadieux said Genelex has already begun applying for unique z-code identifiers for its tests and has received approval for some of its panels.

Uncertainty about whether this single-code policy will further cut into Medicare test payments is weighing heavily on PGx testing firms such as Genelex, since these labs already consider CMS's national payment limits for analyte-specific molecular pathology codes too low, often insufficient to cover the cost of performing the tests. "It should not be a matter of what they are now willing to pay as, at CMS direction, they went through a gapfill process that set the pricing" for the molecular pathology codes, Wolf said. "All contractors should now be obligated to honor the national limit amounts that were set by that process just last year. … If [CMS] wants to change the prices, they must follow due process for doing that."

Palmetto defines a panel test as "a predetermined set of medical tests composed of individual laboratory tests, related by medical condition, specimen type, frequency ordered, methodology, or types of components to aid in the diagnosis/treatment of disease." As an example, Palmetto explained that a lab that bills for a blood clotting test panel that assesses CYPC19, Factor II, and Factor V markers, would have to register the whole panel, receive a unique z-code identifier, and also submit an unlisted CPT code (81479) when submitting a claim for the panel.

However, if the lab runs each of the three markers separately on a patient's sample, then the lab would have to register each biomarker as well and receive a unique ID for each marker, so it can submit "claims when only that biomarker is performed." This would impact a company like Genelex, since the firm runs multiple markers as part of panels, but also analyzes many of those markers as individual tests.

Meanwhile, Wolf contends that the blood clotting panel test example put forth by Palmetto doesn't make clinical sense. She pointed out that thrombosis factors may or may not be related to CYPC219. "It is more a panel of 'convenience' rather than medically necessary," she said. As such, a policy that ties reimbursement to a single code for the entire panel will result in labs performing all three markers even if all markers aren't medically necessary for the patient.

"This also creates many unanswered questions, such as what happens when a 'panel' includes both covered and non-covered services," Wolf noted. "It also has the potential to create greater use of panels, as opposed to groupings of tests that would be specific to a patient's medical necessity and defeats the concerns regarding panels that have been previously expressed by CMS and the Office of Inspector General."

Palmetto has instructed labs to start registering panel tests as of Nov. 17, which is necessary to receive a unique MolDx identifier. "If a lab does not perform single biomarker tests, they must notify the registry of this registration error," the contractor said.

As of mid-November, Palmetto said it began notifying labs that had already submitted panel test claims with MolDx IDs that require registration. Labs have 30 days from receipt of the notification to correct their test registration.

As of Jan. 1, 2015, MolDx will make changes to its system so it rejects claims for tests that are performed as panels but for which labs are submitting stacked analyte-specific codes. "During this period, Palmetto will continue to interrogate the claims data for incorrect submissions," the contractor said in the notice.

Meanwhile, under the "Protecting Access to Medicare Act of 2014" (PAMA), which was signed into law earlier this year, payment for molecular tests will move to a market-based payment system for diagnostics starting in 2017. CMS will pay labs according to the weighted median of rates from private payors for tests, and labs will have to begin reporting rates from payors to CMS in 2016. But until then, Medicare contractors must continue to use gapfilling and crosswalking methods to establish payment for new CPT codes.

This "repricing" attempt by CMS, according to Wolf, was promulgated without mandatory due process. "In addition, under PAMA, tests already on the CLFS are supposed to be price protected through 2016," she said. "We can't see anyone benefitting from this, including Medicare beneficiaries."

Similarly, Medicare policy expert Bruce Quinn pointed out that PAMA stipulates that payors reimburse labs using current CPT codes. "The resulting payments must be reported by laboratories to CMS on a test by test basis using the CPT code system," Quinn, senior health policy advisor at the law firm Foley Hoag, told GenomeWeb. "If all payors nationwide used MolDX's proposed approach, denying use of CPT codes and requiring one single unlisted code to collectively represent the tests, labs would have no test-based payments to report. The PAMA pricing system just set up by legislation could not operate that way. It would also become impossible to do public health studies based on all-payor national CPT code data."

This new policy can also impact certain NGS panels that aren't described by CPT codes that go into effect next year. These panels would have been billed by analyte-specific codes but now will have to be submitted as an unlisted code and the test maker will have to apply for a unique identifier. 

Genelex's Cadieux is hoping that this policy, while providing more pricing flexibility to Medicare, will not end up contributing to an even tougher reimbursement environment for labs.

"We think this proposal is a good policy for tests that can be performed with the same extraction and testing platform, as it will allow laboratories to pass economy-of-scale savings on to Medicare," she said. "For complex polypharmacy patients, panels of pharmacogenetic tests with pharmacist interpretation are needed to realize the full benefit of this technology in reducing the risk and associated human and financial costs of adverse drug events."

This article has been updated with additional insights from Foley Hoag's Bruce Quinn.