Skip to main content
Premium Trial:

Request an Annual Quote

Palmetto Final LCD Denies Coverage to Large Respiratory Panels

NEW YORK (GenomeWeb) – Medicare administrative contractor Palmetto GBA finalized local coverage determinations for viral respiratory panels yesterday, determining that the use of small multiplex viral panels in susceptible populations may be reasonable and necessary, but the use of highly multiplexed nucleic acid amplification tests as front-line diagnostics cannot currently be justified.

The measure had been expected after a draft LCD was issued in May 2017 and will now become effective Nov. 12, 2018.

Multiplex respiratory viral assays are assigned billing codes that relate to the number of targets in the test. Tests with three to five targets are coded by CPT code 87631, while CPT codes 87632 and 87633 relate to tests with six to 11, and 12 to 25 targets, respectively.

In the finalized Palmetto LCD, tests that fall under the three- to five-target 87631 code will be covered under limited circumstances. They will be covered related to the place of service – urgent care, inpatient hospital, or emergency room – when ordered by any provider qualified to order tests. But they must be ordered by an infectious disease specialist in order to be covered outside of one of these places of service, provided that an ID specialist is reasonably available.

More highly multiplexed tests that fall under the CPT codes 87632 and 87633 will be not be covered.  

The LCD specifically mentions the following large syndromic panels: the xTAG Respiratory Viral Panel (RVP) and RVP FAST from Luminex; GenMark Diagnostics' eSensor RVP; Nanosphere's Verigene Respiratory Pathogens Plus Nucleic Acid Test; and the FilmArray Respiratory Panel and CLIA-waived FilmArray Respiratory Virus Panel, both from BioMérieux's BioFire business.

"The multiplex PCR respiratory viral panels are effectively a 'one size fits all' diagnostic approach, and do not meet Medicare's 'reasonable and necessary' criteria. Non-coverage of these multiplex PCR respiratory viral panels does not deny patient access because appropriate clinician directed testing is available," Palmetto wrote.

In the coverage decision, Palmetto also determined that "a panel that includes pathogens that are very rare, or a panel in which all pathogens do not cause overlapping clinical syndromes, or when some pathogens are found only in specific patient populations [such as] immunocompromised patients, is not reasonable and necessary."

The contractor also noted that understanding the performance characteristics of all members of the panel is essential, since the sensitivity and specificity for the detection of each pathogen may vary and the prevalence of the pathogen will affect positive and negative predictive values. And, it wrote, "A negative test result does not necessarily rule out a virus and requires additional testing to confirm its negativity, as implied in the 510(k) documents" for some of the tests.

"No clinical utility studies demonstrate that rapid, accurate highly multiplexed NAAT tests decrease the use of empirical antibiotics and allow for a more targeted approach to using antivirals," according to Palmetto.

Finally, Palmetto noted that syndromic surveillance testing, such as that used to improve early detection of outbreaks or public monitoring to follow disease transmission or mutational change are not Medicare benefits.

Palmetto is expected to rule on gastrointestinal syndromic panels soon. The prior draft LCD had proposed coverage for multiplex tests limited to the five common food-borne bacterial pathogens — SalmonellaCampylobacterShigellaCryptosporidium, and Shiga toxin-producing E. coli — excluding tests for viruses because of a lack of virus-specific therapies.

Brian Weinstein at William Blair said in a research note that, should this policy be adopted broadly by other Medicare contractors and private payors, there is a case to be made that "in addition to outpatient use being curbed, it could lead to less assay use even in the hospital setting as perception of the tests could change."

Doug Schenkel, an analyst at Cowen, echoed the sentiment, saying that, "while this LCD doesn't directly apply to inpatient testing, it's possible it does alter customer behavior more broadly than just Palmetto outpatient testing."

Blair's Weinstein also pointed out that the LCD will become effective in the middle of the respiratory virus season in North America.

"Still, at this time, we do not think this is a thesis maker or a thesis breaker for any of the multiplex syndromic panel testing participants," Weinstein said, given that around 70 to 80 percent of respiratory virus panels are done on an inpatient basis, "where reimbursement changes are not relevant and in most of these cases the broader panels are clinically needed."

William Quirk at Piper Jaffray said the LCD could trim upwards of €13million ($15.1 million) in revenue for BioMérieux, and approximately €16M-€17M with GI as well. It could also trim around $3.5M for Luminex, adding on another $2 million with an unfavorable GI decision.

Weinstein, meanwhile, highlighted a potential upside to makers offering smaller panels or those that could easily adapt, such as Quidel, GenMark, Luminex, Hologic, and Qiagen. Likewise, Quirk called out makers of low-plex tests — Quidel and Hologic, as well as BD and Meridian — that "could incrementally gain market share following this decision, which could rise if private payors follow Medicare's lead and change their medical policy."

The Scan

Fertility Fraud Found

Consumer genetic testing has uncovered cases of fertility fraud that are leading to lawsuits, according to USA Today.

Ties Between Vigorous Exercise, ALS in Genetically At-Risk People

Regular strenuous exercise could contribute to motor neuron disease development among those already at genetic risk, Sky News reports.

Test Warning

The Guardian writes that the US regulators have warned against using a rapid COVID-19 test that is a key part of mass testing in the UK.

Science Papers Examine Feedback Mechanism Affecting Xist, Continuous Health Monitoring for Precision Medicine

In Science this week: analysis of cis confinement of the X-inactive specific transcript, and more.