Some Labs Performing ADLTs May See Increased Medicare Fees

CMS published proposed ADLT prices, then released deidentified market price data file

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MIXED IN THE BAD NEWS concerning the proposed Clinical Laboratory Fee Schedule for 2018, there is some good news regarding what the federal Centers for Medicare and Medicaid Services proposes to pay for certain advanced diagnostic tests.

After analyzing the proposed fee schedule, Quorum Consulting of San Francisco, reported, as other analysts have concluded, that CMS has proposed drastic cuts for many of the most common clinical laboratory tests. At the same time, CMS also has proposed that advanced diagnostic laboratory tests (ADLTs) would not face wholesale cuts in payment.

For example, payment for Myriad Genetics’ Vectra DA test—an assay used for patients with autoimmune rheumatoid arthritis under HCPCS code 81490— got a proposed 42.34% increase in payment, from $590.61 this year to $840.65 next year, Quorum said.

In an article for GenomeWeb, Turna Ray reported that most ADLT codes would benefit. Genomic Health’s Oncotype DX test for breast cancer recurrence would rise from $3,443 to $3,873, but payment for its colon cancer test would drop slightly from $3,126 to $3,116, Ray wrote.

While price increases are effective immediately, price cuts will be phased in at no more than 10% per year over the first three years, noted Bruce Quinn, MD, PhD, Principal with Bruce Quinn Associates. Another test for breast cancer recurrence, Nanostring’s Prosigna, would initially drop from $3,443 to $3,099, Quinn added, although its ultimate median price under PAMA is only $900.

CMS proposed increases for two other ADLTs: Veracyte’s Afirma Gene Expression Classifier would rise from $3,222 to $3,600, Ray reported. CareDx’s AlloMap test would go from $2,841 to $3,240, she added.

After analyzing the market price data submitted by labs, CMS published the raw deidentified data file of 5 million lines that showed all the prices that labs reported. The data show wide ranges in prices from among labs that reported private payer market price data. “As an example, for BRCA sequencing (CPT code 81211), the new median price is $2,395, but the raw data shows dozens of payments were made at over $30,000,” Ray wrote.

In the Protecting Access to Medicare Act of 2014, an ADLT is defined as a laboratory service that is offered and furnished by only the developing lab and also meets one of the following criteria:

• The test is an analysis of multiple biomarkers of DNA, RNA, or proteins combined in a unique algorithm to yield a single patient-specific result; or,

• The test is cleared or approved by the FDA: or,

• Meets other similar criteria established by CMS.


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