Personalizing Healthcare and Also Paying for It

January 26, 2016

Personalized medicine has been the mantra in healthcare for quite some time, but finding health plans with blanket coverage policies for diagnostic testing is a struggle.

So we had the President’s announcement of the Personalized Medicine Initiative last year, which set the ball in motion for Vice President Biden to lead the charge to revitalize cancer research in the United States. He did so by helping boost research funding for the National Institutes of Health and the National Cancer Institute. Additionally, Biden has been meeting with members of the cancer research community to understand their needs and demands.

But funding cancer research is not the same as paying for diagnostic tests in the clinic—that decisions lies in the hands of payers, Medicare being the largest among them. Next generation sequencing techniques can place the provider a step ahead in predicting an individual’s health trajectory, and could even help include preventive measures in a patient’s treatment plan. But that might be a long way coming. Medicare does not seem convinced, at least not yet, about the utility of genetic sequencing in improving cancer outcomes.

According to a report by STAT, CMS and some private contractors who administer Medicare plans currently only pay for limited sequencing of tumors, and that too only for only a few tumor types. The hurdle seems to be convincing payers (both CMS and private health plans) that their payments will help treatment decisions now and not in the future.

“It’s a fascinating standoff because Medicare would say, ‘You haven’t really proven this is useful so we’re not going to pay for it,’” George Demetri, MD, a bone oncologist at the Dana-Farber Cancer Institute told STAT. “We’re saying, ‘We can’t prove it’s useful because you aren’t paying for it.’”

Turns out Biden’s staff is aware of this stumbling block. A Biden aide told STAT that this was one of the things discussed at the more than 2 dozen meetings that the vice president’s office called. “As the [vice president] formally convenes government leaders, they will consider this idea along with many others.” The crux is who has authority to change CMS policy—the administration or would Congress need to be involved?

At a roundtable discussion on translating genomic information into healthcare decision making, hosted by the Institute of Medicine in 2014, participants—including commercial and government payers—discussed the criteria that they consider when making coverage decisions for genetic testing. Speaking at the workshop, Louis Jacques, MD, director of the Coverage and Analysis Group at CMS said that while many are looking at CMS to lead the way in determining coverage of molecular diagnostics, Medicare will not be the major driver on reimbursement for the genomic testing space. He explained that while the system has been criticized for not being transparent, CMS will be applying the same procedures to evaluate the diagnostic as it does any other tests or treatments. This can vary between a quick claim-by-claim adjudication process and a much slower 9-to-12-month national coverage determination process.

For now, Palmetto GBA, a Medicare contractor, is the only payer known to have authorized comprehensive gene sequencing; this is in a specific population of non—small cell lung cancer patients.

“Obviously, a payer’s not interested in paying for research. Really they want to pay for what’s reasonable and necessary for that patient,” Adam Borden, MHA, Avalere Health, told STAT. In an article in Evidence-Based Oncology last year, Borden wrote, “While Medicare policies are relied on as a basis for determining private payer coverage policies for certain tests, such as in oncology for companion diagnostics, many tests are more appropriate for populations outside of the Medicare population, or are excluded by statute from the Medicare program. This means that payers will need to evaluate coverage and payment on their own terms for a wide range of new tests.”

Diagnostic tests promote smarter healthcare—devoid of experimentation, precise, with a promise of improved outcomes and a better quality of life for patients…and payers need to figure out ways to keep up.