a molecular diagnostic perfect storm v.m. pratt, phd, facmg
TRANSCRIPT
![Page 1: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/1.jpg)
A Molecular Diagnostic Perfect Storm
V.M. Pratt, PhD, FACMG
![Page 2: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/2.jpg)
Regulatory and Reimbursement
• FDA oversight• Coverage and
reimbursement
• Will precision
medicine survive?
![Page 3: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/3.jpg)
2003: Human Genome Completed
• International consortium published draft sequence
http://www.genome.gov/11007569
![Page 4: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/4.jpg)
Public Attitude
• Increased benefit and potential use of genetic testing
• People more interested in own genetic make-up.
European Journal of Human Genetics (2013) 21, 793–799; doi:10.1038/ejhg.2012.271; published online 19 December 2012
![Page 5: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/5.jpg)
US Diagnostic testing impact on health care
• Trend towards more precision medicine
![Page 6: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/6.jpg)
Estimated US spending on molecular diagnostics and genetic testing, 2011
![Page 7: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/7.jpg)
Bench to bedside
Chin et al. Nature Medicine 17, 297 (2011)
New and timely approaches forestablishing analytical and clinicalvalidity as well as FDA and CLIAregulatory review meritconsideration to ensure timely,high quality patient care
![Page 8: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/8.jpg)
Wave of changes in Healthcare• Lack of stakeholder agreement• Increased cost pressures; ambiguous transition to new
CPT codes; more stringent reimbursement decisions• Increased role of CLIA testing with concordant decrease
in contribution of IVD products because of pace of medically validated associations
• Narrower subsets of patients eligible for targeted therapies
• Increased roles of EMR evidence that lacks quality of randomized controlled trials but perhaps sufficient for initially narrowly targeted patient management
![Page 9: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/9.jpg)
FDA
• Companion diagnostic tests• Proposed LDT oversight
![Page 10: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/10.jpg)
FDA Oversight• Ensure safety and effectiveness• “device” to include any ‘… in vitro reagent, or
other similar or related article, including any component’ “(2) intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals” (21 U.S.C. § 321)
• Traditionally applied to medical device manufacturers
![Page 11: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/11.jpg)
Draft Guidance for Oversight of LDTs• 60-day to Congress on 31 July 2014• Notice by the Food and Drug
Administration on 10/03/2014 in federal register
• Goal to ensure analytical and clinical validity
![Page 12: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/12.jpg)
FDA Oversight of LDTs: Phased and Risk-based
![Page 13: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/13.jpg)
Operational issues
• Conflicts between CLIA and FDA regulationsFDA restriction of off-label promotion versus
CLIA allows clinical consultation
CLIA regulation versus FDA’s quality system regulation (QSR)
Laboratory service directory versus package insert
Malpractice versus product liability insurance
![Page 14: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/14.jpg)
Regulatory Experts Needed
Jobs Available in Clinical Labs!
![Page 15: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/15.jpg)
FDA Medical Device Process
24-36 mo 3-9 mo 510(k) 3-9 mo121 day ave (2011)
PMA 12-24 mo360 day ave (2010)
IDE (PMA)9-36 mo
12-24 mo
Pre-submission process
FDA submission
Limited Patient Access
Broad Patient Access
![Page 16: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/16.jpg)
FDA Companion Diagnostics
• Drug and test are approved together • Currently promotes one test per one
instrument
Constrains laboratory infrastructure
![Page 17: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/17.jpg)
Labs and Test platforms
• Many tests to a single platform
Reduces capital equipment costs
Reduces maintenance costs
Optimizes competency and training
Utilizes space efficiently
![Page 18: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/18.jpg)
LDPs highly regulated
CLIA CertificationState law (eg, NYSDOH, CA)Accreditation (eg, CAP) ISO 15849
![Page 19: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/19.jpg)
Modification of IVDs
• Often related to specimen type or stability• Now considered LDTs
Will require FDA review in proposed framework
• Permitted under CLIA [CFR § 493.1253(b)(2)]
![Page 20: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/20.jpg)
Laboratory Professional Service
• Designing and validating test• Purchasing manufactured products and
instrument• Interpreting results
Promotes patient safety
![Page 21: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/21.jpg)
CMS
• New MolPath CPT codes• Non/limited-coverage decisions• Lack of reimbursement in 2013• Technology assessments required by
some MACs
![Page 22: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/22.jpg)
CMS
• Pays for approximately 50% health care• Laboratory testing
<5% hospital costs
1.6% of all Medicare costs
![Page 23: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/23.jpg)
Skyrocketing healthcare costs
• Unhealthy lifestyles
Obesity
Lack of exercise
Diabetes, Type 2
IU.edu
![Page 24: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/24.jpg)
Sequencing cost going down
• Relative to cost of human genome
Reagent cost – YES• Infrastructure – NO• Personnel - NO
![Page 25: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/25.jpg)
Avalere study 2012
• Commissioned by ACLA• Compared private market and Medicare rates• Medicare paid lower than private non-
government health plans
CBC: commercial $20.26, CMS $11.02
Drugs screen: commercial $69.48, CMS $25.57
• Payment differences higher in rural areas compared to large metropolitan cities
![Page 26: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/26.jpg)
New MolPath CPT codes
• AMA created new codes in response to payers
Analyte-specific codes (Tier 1)
Level of complexity code (Tier 2)• Implemented 1 January 2013• Placed on CLFS• Gap-filled
Year-long process to determine reimbursement
![Page 27: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/27.jpg)
Coverage decisions
• Some CPTs not applicable to Medicare population (65+)
• Many other insurers (eg, Medicaid, private) follow Medicare decisions
• Reimbursement lower than cost of IVD
![Page 28: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/28.jpg)
Medicaid
• States generally pay for services through fee-for-service or managed care arrangements
• States may develop their fee-for-service payment rates based on:
- The costs of providing the service
- A review of what commercial payers pay in the private market
- A percentage of what Medicare pays for equivalent services
http://www.medicaid.gov/medicaid-chip-program-information/by-topics/financing-and-reimbursement/financing-and-reimbursement.html
![Page 29: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/29.jpg)
Protecting Access to Medicare Act 2014
• Designates up to 4 MACs to establish coverage policies
• Labs must report market data to determine CLFS prices
Huge fines if fail to report• Constrains Medicare from dropping
prices for any given test (limited to 55% over 6 year period)
![Page 30: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/30.jpg)
PAMA
Year Theoretical reimbursement
Reduction
2016 $100.00 10%
2017 $90.00 10%
2018 $81.00 10%
2019 $72.90 15%
2020 $61.97 15%
2021 $52.67 15%
2022 $44.77 15%
![Page 31: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/31.jpg)
PAMA Advanced Diagnostic
• The test is an analysis of multiple biomarkers of DNA, RNA, or proteins combined with a unique algorithm to yield a single patient-specific result
• The test is cleared or approved by the FDA
• The test meets other similar criteria established by the Secretary
![Page 32: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/32.jpg)
PAMA Advanced Diagnostics
• Assignment of temporary HCPCS code• 1st 3 quarters reimbursed at list• Application of market rates after initial
period
Requires payback if overpriced
![Page 33: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/33.jpg)
PAMA Advanced Diagnostics
• If FDA oversight of LDTs• Would MolPath panels (eg, NGS tests)
get CPT code?• CMS would have to cover test• Private payors may not cover test
![Page 34: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/34.jpg)
OIG: Comparing Lab Test Payment Rates: Medicare Could Achieve Substantial Savings
HCPCS* Code23
DescriptionNumber of Medicare- Allowed Tests in 2010
Percentage of All Medicare- Allowed
Tests in 2010
Total Medicare- Allowed Amount in
2010
Percentage of Total Medicare- Allowed
Amount in 2010
2011 Medicare National Limitation Amount per
Test
80048 Metabolic panel, total calcium 9,355,762 2.30% $94,325,286 1.90% $11.91
80053 Comprehensive metabolic panel 27,232,042 6.60% $319,935,253 6.50% $14.87
80061 Lipid panel 20,970,947 5.10% $310,596,151 6.30% $18.85
81001Urinalysis, automated, with
microscopy6,709,626 1.60% $30,435,748 0.60% $4.45
81002Urinalysis, nonautomated, without
microscopy4,416,987 1.10% $16,008,487 0.30% $3.60
81003Urinalysis, automated, without
microscopy4,805,501 1.20% $15,435,365 0.30% $3.16
82306 Vitamin D, 25 hydroxy 5,333,420 1.30% $223,366,966 4.60% $41.66
82570 Assay of urine creatinine 4,362,909 1.10% $32,023,975 0.70% $7.28
82607 Vitamin B-12 3,334,018 0.80% $71,897,559 1.50% $21.21 82728 Assay of ferritin 4,361,621 1.10% $84,963,813 1.70% $19.17
83036 Glycosylated hemoglobin test 12,652,264 3.00% $175,307,639 3.60% $13.66
83540 Assay of iron 5,455,091 1.30% $49,960,956 1.00% $9.12 83550 Iron binding test 4,297,065 1.00% $52,653,538 1.10% $12.30 83880 Natriuretic peptide 1,135,239 0.30% $54,491,238 1.10% $47.77
83970 Assay of parathormone 3,582,472 0.90% $211,655,094 4.30% $58.08
84153Assay of prostate-specific antigen,
total 3,651,490 0.90% $96,028,772 2.00% $25.89
84443 Thyroid stimulating hormone 14,728,086 3.50% $353,395,445 7.20% $23.64
85025Complete blood count with
automated differential white blood cell count
31,930,801 7.70% $351,630,565 7.20% $10.94
85610 Prothrombin time 22,020,091 5.30% $123,445,269 2.50% $5.53 87086 Urine culture colony count 4,610,965 1.10% $53,112,711 1.10% $11.36
https://oig.hhs.gov/oei/reports/oei-07-11-00010.asp
![Page 35: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/35.jpg)
2014 PFS
• CMS proposes to bundle all lab testing to hospital outpatient fee visit
Exception is genetic tests
Controls over utilization
Promotes “across the street” testing
![Page 36: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/36.jpg)
Palmetto MolDX Program
• Pilot program• McKesson-owned Z-codes
Assigned based on laboratory and method
Designed to complement current CPT codes
Allows differential reimbursement based on test• Must submit technical assessment to Palmetto
Reviews analytical validity, clinical validity and clinical utility
![Page 37: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/37.jpg)
If labs close, what happens to precision medicine?
• Medical pathology training?• Proficiency testing?• Translation of bench to bedside?• Innovation?
![Page 38: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/38.jpg)
Path forward
• Oversight for most LDPs should remain at CLIA
improve to explicitly require clinical validity, transparency regarding individual tests, and adverse event reporting.
• FDA should eliminate the one test – one drug pair, approved or cleared in concert in the current companion diagnostics paradigm
![Page 39: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/39.jpg)
Path forward
• The FDA should use comment and notice rulemaking for substantive policy changes regarding LDPs
conduct an economic impact study
draft guidance documents that fail to be finalized after a defined time limit should be withdrawn.
![Page 40: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/40.jpg)
Path forward
• Regulator and payer policies should also reflect the contribution laboratories to medical training and the necessary interaction between laboratory professionals and clinicians to support proper ordering and utilization of tests.
![Page 41: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/41.jpg)
Path forward
• CMS should authorize payment for all claims previously filed using Tier 1 and Tier 2 molecular pathology CPT codes, retroactive to January 1, 2013, without requiring submission of an appeal for every claim unless a MAC has issued a Local Coverage Determination (LCD) for non-coverage that complies with existing regulatory requirements, including code-specific notice and comment.
![Page 42: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/42.jpg)
Path forward
• For any new molecular pathology CPT code, share the same disposition of any other new Medicare service and should presumptively be covered.
MACs should continue to have the authority and discretion to create exceptions, i.e., non-coverage or limitation on coverage determinations, through the existing LCD process.
![Page 43: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/43.jpg)
Path forward
• a single MAC should NOT make recommendations or administer pricing, coverage
this will undermine the LCD process and render all such determinations NCDs.
![Page 44: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/44.jpg)
Path forward
• CMS should abandon the use of unique identifiers that discriminate among tests within a CPT code based on any criteria (beyond the identification of the gene), e.g., based on the methodology, FDA approval/clearance status, or laboratory performing the test.
![Page 45: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/45.jpg)
Path forward
• CMS should provide state Medicaid departments with information that will assist their coverage and pricing determinations so that the most vulnerable patients do not suffer lack of access to care
![Page 46: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/46.jpg)
Path forward
• Congress should provide additional oversight as CMS implements the “Improving Medicare Policies for Clinical Diagnostic Laboratories” provision (Section 216) of PAMA.
The reporting requirements and penalties will be burdensome
![Page 47: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/47.jpg)
Which one is better?
• Local restaurant• Caters to locale• High quality• FDA regulated
supplies• Health
Department inspection
• National chain• National menu• High quality• FDA regulated
supplies• Health Department
inspection
![Page 48: A Molecular Diagnostic Perfect Storm V.M. Pratt, PhD, FACMG](https://reader036.vdocuments.net/reader036/viewer/2022062421/56649e565503460f94b4e425/html5/thumbnails/48.jpg)
Conclusion
• Laboratories are important partners in innovative precision medicine
• Changes in regulation and reimbursement will cause labs to shut down → Loss of precision medicine