HER2 Support Group Forums - View Single Post - Medicare facing cancer, cardiac care cuts

gdpawel · 06-09-2013, 02:58 PM

Absent a new process for financing the development and introduction of new diagnostics, a lot of promising innovation could be put on hold. Yet all of these tests are an integral part of efforts to “personalize” the delivery of care — a branch of medicine that is supposed to improve clinical outcomes, and hopefully lower costs.

In this way, Medicare threatens to undermine the very sort of personalized medical practice that Congress and the Administration is trying to underwrite by reforming regulations at the Food and Drug Administration and through parts of Obamacare.

There’s also a much broader principle at stake: Medicare as a business partner.

The old coverage model had flaws. But it had been static for years. The payment model conditioned expectations and formed the basis for investment in new test.

Medicare’s abrupt change to that payment model has created a lot of uncertainty that’s putting new investment on hold.

The problem is that Medicare is no ordinary payer. Private payers emulate the agency’s coverage decisions. So Medicare’s ends up setting the market standard.

If the political class wants to put most of the reimbursement of healthcare under the thumb of government, it needs to pay particular care to how its coverage and payment policies affect incentives to new innovation. Medicare isn’t just another payer looking to ratchet down on payment rates in the name of cost containment.

Its decisions end up having a profound impact on investment and development of new products. In short, if Medicare is going to flex so much power owing to its broad reach and government mandates, it needs to be mindful of its impacts.

Medicare’s payment changes are reverberating through the medical marketplace. It has created all kinds of problems for patients and doctors.

Sometimes, doctors’ won’t have enough tissue to run tests on a tumor in series, one at a time as the treatment or diagnosis evolves. Doctors need to use the small sample they have to get all the information right up front. But some of these sorts of “multiplexed” tests that probe for multiple gene mutations off the same sample of tissue are precisely the novel sorts of tests that are in a gray area right now.

Whether test will get covered also depends on where the laboratory doing the test is located, creating a very uneven marketplace for providers and patients.

Some regional Medicare carriers such as Palmetto GBA (which covers California; and North and South Carolina) have set rates that are close to the previous payment levels received by the largest labs for the simplest versions of common tests (versions that might only probe for one or a few variations of a marker). The molecular labs for LabCorp (NYSE:LH) and Quest (NYSE:DGX) are each located in Palmetto’s geographic area. So the carrier has more experience than others in the coverage of molecular diagnostics. Palmetto has also been more flexible than other Medicare contractors in continuing to pay for some “tier 2” tests.

But Medicare carriers in other parts of the country have been much slower to set rates for the 116 standard tests, and are denying coverage altogether for tests that don’t have one of the unique codes. For example, the Medicare carrier CGS, which oversees parts of the Midwest, is telling companies that it won’t pay for molecular tests that haven’t been incorporated into standard treatment guidelines, been substantiated by major clinical articles, and have become a routine part of practice.

That means just about any new test won’t get covered, and even some established tests might not fit the narrow criteria CGS is using.

A list of some of the tests that Medicare won’t pay for can be found on the Palmetto website. Palmetto is one of the few carriers publishing its “non-coverage” decisions.

At the core of this is a more central debate: What level of evidence should a test demonstrate before Medicare will pay it for.

What Medicare is saying, through carriers like Palmetto, is that tests need to show “clinical utility” before the agency pays for it. That means that labs need to prove that the test results will change treatment in a way that improves patient outcomes.

At first blush, this might sounds reasonable. But it’s an imprudent standard that’s at odds with the way that diagnostic tests get used as a part of the practice of medicine.

06-09-2013, 02:58 PM	#27
gdpawel Senior Member Join Date: Aug 2006 Location: Pennsylvania Posts: 1,080	Absent a new process for financing the development and introduction of new diagnostics, a lot of promising innovation could be put on hold. Yet all of these tests are an integral part of efforts to “personalize” the delivery of care — a branch of medicine that is supposed to improve clinical outcomes, and hopefully lower costs. In this way, Medicare threatens to undermine the very sort of personalized medical practice that Congress and the Administration is trying to underwrite by reforming regulations at the Food and Drug Administration and through parts of Obamacare. There’s also a much broader principle at stake: Medicare as a business partner. The old coverage model had flaws. But it had been static for years. The payment model conditioned expectations and formed the basis for investment in new test. Medicare’s abrupt change to that payment model has created a lot of uncertainty that’s putting new investment on hold. The problem is that Medicare is no ordinary payer. Private payers emulate the agency’s coverage decisions. So Medicare’s ends up setting the market standard. If the political class wants to put most of the reimbursement of healthcare under the thumb of government, it needs to pay particular care to how its coverage and payment policies affect incentives to new innovation. Medicare isn’t just another payer looking to ratchet down on payment rates in the name of cost containment. Its decisions end up having a profound impact on investment and development of new products. In short, if Medicare is going to flex so much power owing to its broad reach and government mandates, it needs to be mindful of its impacts. Medicare’s payment changes are reverberating through the medical marketplace. It has created all kinds of problems for patients and doctors. Sometimes, doctors’ won’t have enough tissue to run tests on a tumor in series, one at a time as the treatment or diagnosis evolves. Doctors need to use the small sample they have to get all the information right up front. But some of these sorts of “multiplexed” tests that probe for multiple gene mutations off the same sample of tissue are precisely the novel sorts of tests that are in a gray area right now. Whether test will get covered also depends on where the laboratory doing the test is located, creating a very uneven marketplace for providers and patients. Some regional Medicare carriers such as Palmetto GBA (which covers California; and North and South Carolina) have set rates that are close to the previous payment levels received by the largest labs for the simplest versions of common tests (versions that might only probe for one or a few variations of a marker). The molecular labs for LabCorp (NYSE:LH) and Quest (NYSE:DGX) are each located in Palmetto’s geographic area. So the carrier has more experience than others in the coverage of molecular diagnostics. Palmetto has also been more flexible than other Medicare contractors in continuing to pay for some “tier 2” tests. But Medicare carriers in other parts of the country have been much slower to set rates for the 116 standard tests, and are denying coverage altogether for tests that don’t have one of the unique codes. For example, the Medicare carrier CGS, which oversees parts of the Midwest, is telling companies that it won’t pay for molecular tests that haven’t been incorporated into standard treatment guidelines, been substantiated by major clinical articles, and have become a routine part of practice. That means just about any new test won’t get covered, and even some established tests might not fit the narrow criteria CGS is using. A list of some of the tests that Medicare won’t pay for can be found on the Palmetto website. Palmetto is one of the few carriers publishing its “non-coverage” decisions. At the core of this is a more central debate: What level of evidence should a test demonstrate before Medicare will pay it for. What Medicare is saying, through carriers like Palmetto, is that tests need to show “clinical utility” before the agency pays for it. That means that labs need to prove that the test results will change treatment in a way that improves patient outcomes. At first blush, this might sounds reasonable. But it’s an imprudent standard that’s at odds with the way that diagnostic tests get used as a part of the practice of medicine.