Not just providers of care, but payers as well have been having a hard time embracing the rapidly-evolving and dynamic field of personalized medicine, according to panel members at the recently held PMC/BIO Solutions Summit.
Developers of diagnostic testing have been making rapid strides in oncology. However not just providers of care, but payers as well have been having a hard time embracing this rapidly-evolving and dynamic field, especially with oncology diagnostic tests. A panel discussion at the PMC/BIO Solution Summit held October 14, 2015, in Washington, DC, highlighted these and other issues that both CMS and commercial payers face and how they are adapting…or trying to.
The panel, Evidence and Integration of Personalized Medicine into Health Practice: Issues Faced by CMS, was joined by Bruce Quinn, MD, PhD, senior director, FaegreBD Consulting; Erin Smith, senior manager, Avalere Health; and Kenneth Bloom, MD, FCAP, chief medical officer, Clarient.
When asked about the biggest updates from CMS on diagnostic tests, Quinn informed the audience that CMS announced reimbursement cuts for the first time, with a big drop for some companies. Some of the tests saw a huge price cut—up to 10% of their existing price. While the developers are trying to wrap their heads around this, they have some time on hand to respond as the reimbursement codes are expected to be implemented next winter according to Quinn.
Quinn pointed out that the new “PAMA lab-to-lab marketing for LDTs ruling excluded hospital laboratories and physician practice laboratories.” The comment period is ongoing till the end of November 2015. He elaborated that CMS is expected to be done with data collection soon, and pricing and final rules might be out by January 2016—the latest by March 2016.
Smith explained the process by which CMS, through the Center for Medicare and Medicaid Innovation institute (CMMI), is experimenting with alternate payment models with the objective of healthcare cost reduction. “The bundling, though, is different from that by commercial payers like UnitedHealthcare or other commercial payers. CMS goes from all-inclusive with very few exceptions, or none,” Smith said, which can be good or bad. While some providers can find more opportunities for savings with the bundled payment model, many providers said they were not ready to assess their financial risks.
Smith clarified that the current proposed bundle by CMS is defined by the geographic location of a practice. “Why is that an issue? Because CMS’ bundles are based on baseline period estimates and for new and innovative technologies [like diagnostic panels], that’s a problem because there’s no historical evidence. Fee-for-service and old claims processing systems create confines for the system right now,” said Smith, adding that while CMS recognizes these limitations, the shift is towards trying to seek larger participation in the bundle program.
And has CMS been able to keep up with the rapid developments won the scientific front with these tests?
“That is a problem. While private plans change their formulary designs and have tiered formularies to indicate preferred drugs, CMS has a ‘we cover it we pay for it’ policy.” Value measurements, Smith thinks, may not find a place in CMS payment models yet because they just don’t have the processes in place to incorporate the necessary measures. Also, the tussle between the different groups within CMS, “Contradiction between CMMI and other groups within CMS [that follow the traditional model] would be a no-no, despite recognition for the confines created by their existing systems,” Smith added.
Bloom, a pathologist by training, provided an overview of the evolution of precision medicine. “Precision therapeutics has evolved over years, especially for me as a pathologist. Our job is to coordinate the information between the patient and physicians. With the science evolving as rapidly as it is today, it is difficult to keep up with the levels of evidence and healthcare teams may not be up to speed with the progress,” Bloom said.
He pointed out that a technologically uneducated healthcare team can be a challenge and emphasized the need to alter the system to help payers react more rapidly to these new technologies. “We [as test developers] have to provide maximum evidence to payers. NGS [next generation sequencing], for example, has the potential for phenomenal results, but the technology is expensive.” It may work for large academic centers where the cost may be covered by grants or as part of a clinical trial, but it is not a feasible option for a small laboratory, Bloom clarified.
Bloom believes that experimenting with innovative technology is fair game for an academic center where various groups function well together. “They can openly exchange ideas on new technologies to be tried and tested and where the cost is covered by grants. But this is impossible for an isolated clinical practice.” Bloom explained that smaller, individual practices can access and implement new technology once clinical trial data validate the outcomes.
How can an innovator approach the issue of evidence?
Bloom’s perception is that the “off-label” use of diagnostic tests is well promoted, unlike drug products. “That is what creates the noise. What is needed is providing the information or the necessary data to back up the use,” he said.
“Innovation has always been messy,” said Quinn. You cannot assume that submitting a claim will be paid for, especially with narrow networks.
“The bottom-line is that it’s about providing solutions. Understand the problem at hand, provide the solution and then try to convince payers that it’s worth paying for so the cost of test development is covered,” Bloom concluded.