Policy Update: Some New Perspectives

1. Policy Update:Some New Perspectives CCLA Annual Meeting San Diego 11/4/2016 Bruce Quinn MD PhDPrincipal Bruce Quinn Associates LLC

2. The Crazy New World of Lab Policy • MOLDX • Size of MOLDX • Special Rules • Genomic Sequencing Procedures • Coverage with Evidence Development • Use of Articles for Coverage • OTHER NEW POLICIES • Results of CMS Crosswalk/Gapfill • AMA CPT New Trends • AMA Inconsistent Use of Dup/Del Genomics • PAMA and Clin Chem Panel Codes

3. A Ten Year Timeline: 2006 – 2016“Then” and “Now” • 2006 • CCLA meets quarterly with MAC re minor claims processing issues • Adding ICD-9 code to hematocrit policy

4. 2006 - 2016 • 2006 • CCLA meets quarterly with California MAC re minor claims processing issues • Eg, Adding a new ICD-9 code to the hematocrit policy • 2016 • All this and more

5. Size of MolDX • Three MAC Groups • Noridan JE JF • WPS J5 J8 • Palmetto/CGS Group JM J15 • States • 3 + 10 = 13 • 4 + 2 = 6 • 4 + 2 = 6 • 25 states

6. MolDx and Special Rules • Many special rules • Rules get updated, but generally changes are not archived by date • More clarity than other MACs (e.g. MolDX publishes its Tier 2 pricing)

7. AMA and MolDX: NGS and GSPs • Genomic sequencing procedures are DNA or RNA sequence analyses that simultaneously assay multiple genes or genetic regions. • They may target specific combinations of genes, or assay the exome or genome. • The technology used is commonly referred to as NGS or MPS. • Applications include fetal aneuploidy in cfDNA, gene panels for somatic mutations in neoplasms. • GSP can commonly identify sequence changes, but also copy number and structural changes. AMA CPT 2017, page 534.

8. AMA and MolDX: NGS and GSPs • MolDX does NOT consider the T1 and T2 descriptions appropriate for genes interrogated on an NGS platform. • Report codes 81445, 81450 and 81455 for tumor-based targeted (i.e. “hotspot”) panels that test only for SNVs and small indels (10bp) • Report comprehensive NGS panels that perform tumor tissue testing (e.g. SNVs, indels, CNVs and translocations/rearrangements) with 81479 [Unlisted Code]. • Genomic sequencing procedures are DNA or RNA sequence analyses that simultaneously assay multiple genes or genetic regions. • They may target specific combinations of genes, or assay the exome or genome. • The technology used is commonly referred to as NGS or MPS. • Applications include fetal aneuploidy in cfDNA, gene panels for somatic mutations in neoplasms. • GSP can commonly identify sequence changes, but also copy number and structural changes. 1: MolDX Genl QA #10, V10 2,3: NGS Guidelines (M00130 V2) AMA CPT 2017, page 534.

9. CGP - MolDXComprehensive Genomic Profile FMI FMI FMI FMI

10. “Coverage with Evidence Development” • CMS Usage Conventionally Dates to ~ 2005 (Cochlear Implants) • Extended 1995 FDA IDE device coverage • Two Rounds of Public CMS Policymaking for CED • Last version online, from November 2014 • CMS lists 22 examples of NCD CED, although some are inactive • CMS recently proposed to require defined-length trials and “hard stop dates” for NCD coverage, until the CED trial is both completed and evaluated • E.g. NCD functions like “trial funding” for a fixed time • CED is rarely used by private payers

11. NCD Sleepy Time? • Two studies (2009, 2010) • 2009 study “still recruiting” at ClinicalTrials.gov • Iversen study “suspended” • No change to NCD and CMS coverage since 2009 (7 years) • By funding the genetic test, CMS covered a tiny smidgen of total study costs

12. CMS National View of Local CED • National CED is based on: Congress allowing CMS to fund health services for the purposes of the AHRQ • SSA 1862(a)(1)(E), CMS can cover healthcare in research that is reasonable and necessary for AHRQ purposes (which is SSA 1142) • AHRQ purposes = research with respect to outcomes, effectiveness, appropriateness, etc, of services or procedures for diseases, disorders, health conditions, etc., improved methods of diagnosis and treatment, etc….happy talk. • CMS determines this type of CED is not applicable to MACs • CMS closed by saying: “MACs can use LCDs to make coverage decisions that do not conflict with national policy.” (Which says nothing; this is true if they said it or not)

13. MolDX and CED • MolDX: Coverage with Evidence Development August 29, 2013 • During a review of the clinical utility component of a MolDX Technical Assessment (TA), Palmetto GBA recognized the need to develop a mechanism to provide rapid patient access, while also generating the evidence necessary to assess benefits and risks for test(s)/service. • Under this approved mechanism, also known as a Coverage with Evidence Development (CED), the MolDX Program may provide coverage for promising, but unproven diagnostic tests contingent on the submission of plans to conduct a clinical study that will generate additional evidence to support their safety, diagnostic performance, and most importantly, clinical utility. • Although Palmetto GBA will consider a test-specific CED policy based on an adequate CED study plan submitted by the test developer, the MolDX Program does NOT include design or the performance of the study necessary to determine the clinical utility of the identified test/service. • https://www.xifin.com/resources/industry-news/201308/moldx-coverage-with-evidence-development

14. Outcomes of MolDX TA Step 3 for test assessment: Test Assessment Outcome Based on the answers to these questions, the MolDX program will address test coverage through one of the following methods: • Covered without limitations beyond those inherent in its design and purpose • Limited coverage (i.e. for specific DX, clinical indications) (LCD) • Coverage with data development (CDD) (very specific coverage criteria) (LCD) • Non-covered determination because the test was not found to be medically reasonable and necessary for the diagnosis and/or treatment of the patient (LCD) http://www.palmettogba.com/palmetto/moldx.nsf/docscat/MolDx%20Website~MolDx~Browse%20By%20Topic~Technical%20Assessment~Molecular%20Diagnostic%20Tests%20and%20Medicare%20(M00104%20V2)

15. MolDX Manual http://palmettogba.com/Palmetto/moldx.Nsf/files/MolDX_Manual.pdf/$File/MolDX_Manual.pdf

18. Newest MOLDX CDD: Elaborate CDD for coverage of lung cancer gene panel genomic testing (9/2016): Collect CGP test and patient specific information in the MolDX approved registry that meets the following characteristics: oNational in scope and open to any lab, (commercial or academic), and any provider location (academic, community); oIndependent of the participating laboratory (commercial or academic); oGoverned by a well-designed protocol listed on clinicaltrials.gov with national cross-institution leadership, patient consent, Institutional Review Board (IRB) approval, end points, and regular reporting; oRequires and verifies that CGP testing is essentially equivalent to MolDX Analytical Performance Specifications for Comprehensive Genomic Profiling AND has demonstrable plans to maintain compliance to both MolDX and other published standards; oWill collect detailed genomic information as detailed by the registy– including raw (FASTQ or BAM) data and variant call data in connection with clinical outcomes and report these to the registry in a timely fashion; oWill compare CGP identified mutations in the EGFR, ROS1 and ALK regions to companion diagnostic tools (where exist) on a subset of patients to determine concordance; oOrganization overseeing the registry or essential partners to that organization cannot have a history of data siloing (e.g. not sharing data with competitors) or history of requiring physician-groups purchase or lease any propriety software; oRegistry organization has to have shown a strong commitment and effort to work with national organizations committed to data sharing (i.e. Genetics Data Commons, NCI, Vice President Biden’sMoonshotinitiative, etc.); oRegistry will allow open, non-commercial research access to the database (with appropriate curation), and will allow equal access to commercial groups; oNon-profit registry organization is preferred; ·Registry to report to Palmetto GBA every six months the following: oNumber of patients enrolled in registry oBiomarker prevalence in registry patients oTreatments and time to progression in patients with a given biomarker per line of therapy for at least 2-3 lines of therapy oOverall survival of patients by biomarker status and treatment profile oConcordance analysis of biomarker testing results between CGP and a FDA approved companion diagnostic test (where one exists for a given biomarker) ·Registry will assure publication of test results and clinical findings on a regular basis http://www.discoveriesinhealthpolicy.com/2016/09/rapid-post-new-moldx-lcd-for-lung.html

19. Exclusion by Article • On paper, CMS requires coverage decisions (reasonable and necessary decisions) to be made by LCD process • Making decisions by LCD requires public posting, response to comments, etc • Statutory exclusions should not be in LCDs, e.g. Medicare does not cover eyeglasses or dentistry • Confusingly, the “reasonable and necessary” decision is also a kind of “statute” (don’t cover, what isn’t reasonable and necessary) • The more specific rule should apply, e.g. reasonable and necessary decisions are to be under LCDs as so defined, rather than be treated as general statutory exclusions of the kind that can’t be in LCDs (eyeglasses).

20. Artful Navigation PIK3CA Gene Tests Coding and Billing Guidelines (M00056, V6) • PIK3CA gene has been found to be oncogenic and studies that target the PI3K/AKT pathway as a potential therapeutic option have shown promising results. While these studies are encouraging, there is insufficient evidence to establish a clear association between PIK3CA mutations and treatment response. Therefore, the MolDX team has determined PIK3CA gene testing is a statutorily excluded service. MolDX will also deny panels of tests that include the PIK3CA gene.  • Sec. 1862 (1)(A) Statutory Exclusion covers diagnostic testing “except for items and services that are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member,…”

21. Artful Navigation PIK3CA Gene Tests Coding and Billing Guidelines (M00056, V6) • PIK3CA gene has been found to be oncogenic and studies that target the PI3K/AKT pathway as a potential therapeutic option have shown promising results. While these studies are encouraging, there is insufficient evidence to establish a clear association between PIK3CA mutations and treatment response. Therefore, the MolDX team has determined PIK3CA gene testing is a statutorily excluded service. MolDX will also deny panels of tests that include the PIK3CA gene.  • Sec. 1862 (1)(A) Statutory Exclusion covers diagnostic testing “except for items and services that are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member,…”

22. Wild West of Payers • This borrows some illustrations from August 2016 public postings of Myriad, but used for illustration only.

25. Other New Policies • CMS Crosswalk/Gapfill • AMA CPT New Trends • AMA Inconsistent Use of Dup/Del • PAMA and Clin Chem Panel Codes

26. CMS Gapfill 2016 • CMS required MACs to price all tests, for the first time • Chaotic • Unexpected by industry and experts • Some price raises occurred between July and October • Mass pricing in all MACs, likely to occur again in CY2017 • One rumor: CMS may ask MACs to revisit MoPath codes passed over in past gapfill years • MACs fell into three pricing groups • MOLDX generally highest prices (25 states) • NGS generally lowest prices (7+3=10 states) • Novitas in between (7+4+1=12 states, counting FCSO) • Cahaba didn’t matter (3 states)

27. AMA CPT New Trends • Very few new single gene CPT codes • Except that….MPAG workgroup reported they would elevate several dozen Tier 2 codes to Tier 2 codes • AMA uncertain how to handle new industry sponsored panels • Pan Risk Hereditary Risk Testing • Expanded Carrier Screening (ECS) • Both are now very common practices (many tens of thousands of tests) • Both were on AMA CPT agenda but apparently not finalized

28. Minor Update to GSP AMA CPT Text GSP codes can contain overlapping panels of genes • 81410 Aortic dysfunction panel (oldest) • 81413 Cardiac ion channelopathies panel • ^ 81439 Inherited cardiomyopathy (hypertrophic, arrythmogenic, etc) • New Preamble Text (2016): ^ When a GSP assay includes gene(s) that is/are listed in more than one code, the code for the most specific test for the primary disorder should be reported, rather than reporting multiple codes for the same gene(s).

29. CPT’s Inconsistent Use of “Dup/Del” Codes • Originated in early BRCA coding (81211, etc) – BRAC sequencing with major Dup Del; add on code for additional Dup Del. • BUT: Newest BRCA code bundles the Dup Del (81162), no separate code • AND: Somatic mutation codes bundle the Dup Del (81445, 81455), no separate code BUT… • AMA continues to make gene panel sequencing codes with separate Dup Del (e.g. Hereditary Breast Cancer Panels +/- Dup Del) AND YET… • Our MolDX has policy never to pay for Dup Del (excluded code list) • Although MolDX created gapfill prices for Dup Del…

30. PAMA and Panel Pricing • CMS has a special webpage for PAMA rules • https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ClinicalLabFeeSched/PAMA-Regulations.html • FAQ updated as recently as 10/13/2016 • CMS most recent webinar 11/2/2016 • Data collection form and applicable codes released in September • CMS has some unique panel codes (especially in drug testing) that were priced by crosswalk to other codes, and those crosswalks will be changed by PAMA reporting. • CMS has unique codes from some CBC services not used by other payers • CMS had half day workgroup conference on this topic (mind-numbing; but it’s online at Youtube) • http://www.discoveriesinhealthpolicy.com/2016/09/update-informalunofficial-transcripts.html • https://medicare.fcso.com/FAQs/Answers/276174.asp

31. Questions? Bruce Quinn MD PhDPrincipal Bruce Quinn Associates LLC Los Angeles and Palo Alto bruce@brucequinn.com www.brucequinn.com 323 839 8637 mobile los angeles