CEO SUMMARY: Prices recently established for molecular diagnostic tests are so low that they put patient access in jeopardy, declared a new lab industry coalition in a statement delivered to members of Congress. Called the Coalition to Strengthen the Future of Molecular Diagnostics, the organization also told members of Congress that—not only are the prices too low—but many laboratories continue to await payment for molecular test claims submitted since January 1, 2013.
THERE’S A NEW VOICE within the laboratory medicine profession and it is called the Coalition to Strengthen the Future of Molecular Diagnostics. This group has come together in response to the problems caused by government and private payers in how coverage guidelines and prices are to be set for the 114 new molecular test CPT codes.
Chief among these problems are prices so low that they jeopardize patient access, said the new coalition. It is comprised of molecular testing companies, clinical laboratories, patients, providers, diagnostic test manufacturers, pharmaceutical companies, venture capital investors, and clinical lab associations. The coalition says it represents more than 120,000 medical and laboratory professionals and their institutions that perform the majority of clinical molecular pathology tests.
Over the past four weeks, members of the coalition have met with members of Congress to complain about the process the federal Centers for Medicare & Medicaid Service (CMS) and its Medicare Administrative Contractors (MACs) are using to set prices for these new molecular test codes. Few molecular testing companies have been paid for these tests since January 1, the coalition said.
In addition to the fact that prices set for these new molecular test CPT codes are unexpectedly low, the coalition says there is a second important problem. That problem centers around the fact that neither CMS nor the MACs have made the process behind how they set prices transparent.
Process Needs Transparency
“CMS and the MACs must develop a secure process to collect and analyze targeted data and a transparent process to disclose the basis for their proposals and decisions when completing the gap-fill process to determine 2014 payment rates,” the coalition said in a statement it delivered to members of Congress. Gap- fill is the method CMS and its MACs use to set rates.
In a letter to recently confirmed CMS Administrator Marilyn Tavenner, the coalition delivered a similar message, saying low reimbursement rates for molecular diagnostic testing could stifle innovation and set back advancements in cancer care and treatment of other diseases for thousands of patients.
“A troublesome factor adding to the urgency of the issue is that these rates, while not final, are in effect today [and] retroactive to January 1, 2013. This is causing laboratories to make tough choices about the type of testing they can afford to offer Medicare beneficiaries…,” the letter to Tavenner said. For many laboratories the new rates are below the cost of performing the test, the letter added.
Low Rates Criticized
For example, the coalition’s letter to Tavenner suggested that advances in molecular diagnostics now enabling personalized medicine are in jeopardy as a result of low reimbursement rates. The low rates also jeopardize the use of diagnostic tests to characterize a patient’s disease and guide targeted therapy.
“Knowing how a patient might respond at a molecular level to a particular treatment allows a physician to determine the best course of care at given points in time, preventing trial and error treatments, saving healthcare dollars, and delivering better care faster,” the letter said.
In a statement to members of Congress, the coalition said, “Analyses indicate that some of the new codes are priced far below the amounts paid by Medicare for these same tests in 2012, and in some cases below sustainable levels.”
What compounds this problem is the fact that state Medicaid programs are adopting Medicare’s low reimbursement rates for molecular diagnostics, according to the coalition’s statement to members of Congress. “The low payment rates may result in a lack of access to molecular diagnostic testing not only for current Medicaid beneficiaries, but also for the expected new populations who will receive Medicaid coverage in the near future,” the statement said.
State Medicaid programs are developing ways to use funds from the Affordable Care Act to insure those who have been uninsured previously.
The statement delivered to members of Congress said CMS must provide immediate relief from the low prices and disclose the basis for its decisions.
MACs are denying molecular test claims and reducing rates without justifying their decisions and they are denying payment by mischaracterizing tests as investigational, the coalition said.
JoAnne Glisson, Senior Vice President of the American Clinical Laboratory Association, said laboratory directors and pathologists should tell CMS, the MACs, and members of Congress about the problems their lab organizations face from low reimbursement rates. ACLA is a member of the new coalition.
“Any lab can weigh in with CMS, and we urge labs to send copies of their correspondence to CMS to their contractors,” she said. “The contractors can change the prices they set.”
Engage CMS and MACs
Genevieve Tang, a consultant with Quorum Consulting in San Francisco, California, agreed with Glisson that lab directors and pathologists should express their concern about reimbursement rates. “We are encouraging our client labs to continue to engage their MACs,” she said. “Although CMS said providers should send any information they have on molecular test pricing to CMS and send copies to the MACs, we encourage our clients to directly engage the MACs because some MACs have already revised certain prices upward.”