1. Lessons Learned from the 2013 Molecular Diagnostics Gapfill Process
Orrin Marcella
Manager, Government Affairs
GE Healthcare
CCLA Annual Meeting
San Diego, CA
November 8, 2013

2. Molecular Diagnostic Payment
Historical payment methodology – Code stacking 2011 – AMA CPT codes created 2012 – CMS decisions MPFS v. CLFS, crosswalk v. gapfill Regional Medicare contractors in charge

4. What is Gapfill Pricing?
MACs were to work with labs in their region to determine the new gap-fill pricing
Factors MAC takes into account when pricing:
Charges for the test and routine discounts
Resources required to perform the test
Payment amounts determined by other payers
Charges, payment amounts, resources for other comparable tests even if not sufficient to establish cross walk

5. Key Dates for CMS Gapfill
April 30th (May 8th) – initial MAC pricing
July 8th – stakeholder comments submitted
Oct. 1st – 2013 MAC final prices released
Oct. 31st – NLA reconsideration requests due
Jan. 1st – 2014 prices final

6. Palmetto Feb. Rates

7. The Problem
Initial analysis indicated that many of the new codes were priced far below the cost of providing the service
These prices were effective immediately, retroactive to January 1, 2013
Labs worried about lengthy and uncertain process at CMS
Some labs were forced to scale back their offerings and some forced to forego the use of certain test methodologies

8. Multiple Red Flags!!

9. Red Flag #1 - gapfill timeline
Lesson: Industry should have pushed back on the “price as you go” timeline for 2013 Unprecedented number of codes All of 2012 to decide which fee schedule and weeks to price??

10. Red Flag #2 - no clear process
Lesson: Industry should have asked CMS for a more clear process upfront and enlisted necessary Congressional support for this early on

11. Red Flag #3 - confusion/concerns about data requirements
Lesson: Industry should have asked CMS for clear assurance and a process that protects proprietary information

12. Red Flag #4 - no standard way to represent lab costs
Lesson: Industry should worked earlier to come up with a standardized way of representing direct and indirect lab costs Conversations with MACs and CMS should have happened in late 2012

13. Data, Data, Data….
Do you know your lab’s costs? Do you know what elements of cost matter? Do you know your lab’s cost for specific tests?

14. Lab Costs – what are they?
Indirect costs
Accessioning
Logistics
Commissions
Billing
Indirect wages
T&L
Other EE costs
Depreciation
Taxes
Facility
Purchased services
Other supplies
Direct costs
Labor
Supplies
Development
Validation

15. More Lessons:
Earlier Engagement and Cooperation Needed
Two way street – our initial unwillingness or inability to provide data harmed us

17. Key Decision Makers
Medicare Administrative Contractors (MACs) National Medicare (CMS) U.S. Congress Obama White House

18. Coalition Advocacy TAKE ACTION!
Contact your members of Congress and ask them to urge the Centers for Medicare & Medicaid Services (CMS) to adequately reimburse molecular diagnostic testing for Medicare patients.
To send an expressing your concern, click the option below that best describes you:  

19. 2013 – Rate Roller Coaster (Palmetto)

20. Where Do We Stand?
2013 MAC rates are final Some 2014 CMS NLA rates are being challenged – KRAS is best example Huge coverage gaps still exist in certain areas (NGS for example) What about Tier II codes?

21. Is there a more sustainable model?
Will Molecular diagnostics become commodities? Are they already?
Value pricing is challenging (we are not Phrma)
Gapfill reform is needed
Transparency (public meetings)
Clear process for participation
Establish fair cost methodology
Process must be completed in year before prices go into effect

22. Questions & Discussion