Video 22 min

Navigating the Reimbursement Landscape for Clinical NGS Diagnostics

September 29th, 2022


The below text is a transcript from the webinar. Because it is a transcript, there may be oddities that arise from the process of translating speech into text. We recommend accessing the recording, above, to gain full context.  


So, today, we’re going to review the market landscape for next gen sequencing and then really drill down on the coverage landscape and policy. Evidence development, key issue really in supporting the value of NGS. Get into the details of coding for NGS. The payment assignment process by both Medicare and commercial payors and then really wrap up with the keys to success. What do we need to do to capture value in this environment and drive access to NGS testing?

We'll go through the market landscape now briefly. This presentation will run about 45 minutes or so, so we should have enough time for 15 minutes or so of Q and A.

Key Trends in Biomarker and NGS Testing

I wanted to highlight some key trends in biomarker and NGS testing. I'd just like to say this presentation is US focused but, we see many similar trends particularly in Europe. Biomarker testing obviously we've seen substantial increase in biomarker testing due to many of the approvals of targeted medicines. These biomarkers are critical to inform targeted immune therapy prescriptions. We also have seen standardized testing algorithms driving biomarker testing for common tumors and non small cell lung cancer in many health care settings.

Getting to NGS testing, specifically we're seeing more and more laboratories performing NGS for common tumor types with approved therapies and we'll get into some of the details as to why that is. Certainly, increase in NGS has also been driven by tumor agnostic markers such as MSI, TMP and NTRK fusions. Then improving payor coverage and we'll get into some of those details.

The other thing is just with the cumulative approval of companion diagnostics, we're seeing a substantial increase in the use of Next Gen Sequencing. You can see some of the verbatim on the right here with just noting we do a lot of primary research with pathologists and oncologists and payors focused on this space. Certainly you can see that there's substantial interest in the pathology of course and they're also noting this increase in biomarker testing and the use of NGS panels and then TMB and MMRs as key drivers and the availability of immunotherapies.

The Evolution of Oncology Testing

I also wanted to highlight how oncology testing is evolving and I think it wasn't that long ago that much of oncology testing like molecular pathology was focused on single markers and hotspot panels. These are obviously using conventional molecular methods. Looking at EGFR, PCR for non small cell lung cancer for example. This is really been the current practice for quite a while. But, we know that it limits on tissue availability can make this approach less sustainable over the long term.

Multi-modality Testing

We also see the emergence of multi-modality testing. A lot of this has been driven by changes in testing patterns so possible reflex test patterns, prioritizing certain tests because let's say ease of use or affordability or possibly even biomarker prevalence and of course combining IHC with molecular testing methods. Over the long term we anticipate a substantial broadening of NGS testing. Where NGS and comprehensive genomic profiling increasingly dominates conventional methods. It doesn't mean that multi-modality approaches will go away. It doesn't mean that single markers and hot spots panels will go away. But, over the long term we do expect an increase use in broader NGS testing. I think behind all of these approaches we expect informatics to be deployed to really combine genotypic and phenotypic information to create a comprehensive profile of a patient.

As I mentioned earlier, we go a lot of research with pathologists and oncologists and here's some research that we've conducted with pathologists in the US. Key findings around even a sense from pathologists that there's improved clinical NGS access. Academic medical centers and NCI centers have brought clinical NGS in-house for the most part. Physicians in the community setting were sending out samples to reference labs. Some labs have implemented reflex testing for certain tumor types. But, in the background of course or, maybe front and center despite improved coverage, cost and reimbursement can remain challenging for pathologists.

Pathologists made an increase in NGS based testing moving forward as the coverage landscape continues to improve and of course as I said these cumulative approvals of targeted therapy and associated companion diagnostics. You can see on the right, again, key barriers that are highlighted by pathologists. Again it's a relatively small sample of thirty pathologists in the US but, I think it's indicative cost jumps to the top and reimbursement. Then it gets down to issues around adequacy of tissue sample, reproducibility and so on.

Really, cost and reimbursement are front and center for pathologists and that's obviously why we're here today to walk through some of these key issues and how we can navigate that landscape.

Current Reimbursement Environment

I wanted to touch on the coverage environment and it's US focused but, I think it's important to look at policy development in this space and I think even before we get to coverage, really creating a background on what are the components of reimbursement that we'll walk through. We're gonna talk about coverage but, that's just an isolated part of what reimbursement is and what's needed for reimbursement.

I wanted to highlight three distinct components of reimbursement and these three components really need to work together to make payment for any service, procedure, technology and health care in the US. Make that payment routine to the provider. Reimbursement is really blanket term. Describes the most common form of third party payment in the US. And a product will likely have different coding, coverage and payment rates across different care settings. If coverage, coding, or payment are missing, molecular diagnostic will essentially not be reimbursed. These three components as you can see on the right.

Coverage of course defines the range and extent of the services the insurer will pay. Another way of thinking about this is policy or restrictions that might promote or limit access. Coding. Coding is really the nomenclature. It's the language that characterizes services and procedures, products rendered to patients. And then payment or course is the payment amount. It really is the process by which payments are made to insure for covered product and payment itself. We'll be covering all three of these today.

Let's start with coverage. I think we're gonna cover commercial and government payors in the US. Sometimes these will be joined together as they are on this slide and other times we'll be looking at them separately. Starting from left to right here. You're probably familiar with many of these terms.

A local coverage determination also known as a LCD. This is where a Medicare Administrative Carrier or a MAC can review a test performed in a certain jurisdiction and we'll get to those territories. And a local coverage determination could have a positive carrier over benefit and influential on private or commercial payors.

National Coverage Determination has been certainly a big issue in this space. That's Medicare construct and they'll provide testing to all Medicare testing for all Medicare patients nationally. They have significant influence over how private payor approach coverage but as we'll see it may not be immediate.

Then, private payors themselves. Each private or commercial payor generates it's own coverage policy. We see significant variability for coverage for the same test across the US. That's definitely possible.

Then increasingly, some private payors are outsourcing coverage and approaches, we'll say, and they're approaches to policy making to genetic benefit managers. Also, known as GBMs or Laboratory Benefit Managers.

Finally, Medicaid. Oncology and bio marking tests are covered on a state by state bases. Coverage may lag or be less visible than Medicare or other private payors. Not that for Medicare Advantage, I know a lot of you are familiar with Medicare Advantage programs administered by private payors. Coverage has to follow the relevant local coverage determination and the national coverage determinations. For tests not covered under NCD or LCD independent policies can get generated.


We talked a little bit about local coverage determination of LCDs. A key player in LCDs in the US is MolDX. MolDX is a program administered by one of the MACs that essentially has been very influential in providing guidance on coverage and as you can see MolDx is shaded in yellow. The MolDx program really is implacable in the majority of states in the US. It's been a program that's grown over time in its influence and so MACs in these jurisdictions include Meridian, Palmetto as I mentioned, WPS Government Health Administrators and CGS Administrators. There are two other MACs that are not really adherent to MolDX approaches and this includes Novitas and NGS.

The remaining states are covered by these two MACs, the remaining jurisdictions. Here, essentially what this means is that there are three basic local coverage determination approaches that can be taken in the US and three basic jurisdictions. That's one way to think about it with molecular diagnostics.

I wanted to highlight the requirements that the MolDx has in technology assessment role. I think it's important here because we certainly want to establish and we talked about this a little earlier, that evidence is important. What will a MAC in this case, the MolDx program, require as part of their technology assessment process for a novel test. You can see the requirements here on the left. An executive summary with the description of the assay, the intended patient populations and purpose.

The analytical validity evidence either published or developed in-house. Clinical validity evidence. Evidence of clinical utility. Both of those would need to be published and then copies of all supporting documentation.

These would be reviewed by the MolDx program and there's several outcomes from that review. It could include coverage under an LCD. It could include some sort of limited coverage. Some sort of restriction associated with that coverage. It could include coverage with data development. So, a requirement that in fact additional evidence would need to be developed. Then, of course no coverage could be an outcome as well.

Commercial/Private Payors

I wanted to touch on commercial payors or private payors as well. Here, as I mentioned, Medicare both LCDs and NCDs can be quite influential in private payors but, we also know there are some substantial differences. Private insurers, they can create explicit positive coverage policies, explicit negative policies, or be silent. So they can simply not develop a policy at all for diagnostic assay.

As you look at private payor policies they may not have an explicit policy for most of the tests available, just for higher profile tests. A coverage policy could be test specific or it can address an entire category of diagnostic tests. For examples, all NGS based tests.

And then commercial insurers use a variety of tools to access technology. They're certainly going to look at evidence of clinical utility but, their ultimate coverage decisions simply may not parallel or reflect those made by MolDx. One of the things to consider here is that private insurers have a different standard for coverage than Medicare. The standard of coverage for Medicare is in short form is reasonable and necessary whereas the private payors the standard for coverage in short form is medical necessity. It sounds nuanced but in fact in our analysis we've shown that private payor coverage in molecular diagnostics specifically often lags with Medicare.

The lack of continuity across Medicare and commercial coverage decisions for advanced diagnostics certainly highlights the existing difference in evidence requirements for payors. So, we just may have a different evident standard for private payors than for we do for Medicare and that may account or influence coverage timing.

The tools the private payor use are very similar for Medicare. They're looking for published studies, prior health technology assessments and they have some providers of these health technology assessments. These are private groups like ECRI and HAYS. Then of course guidelines from our society recommendations. Then Medicare coverage decisions are also a factor.

Third-party Involvement

I mentioned briefly that payors are turning to third parties to help them manage the benefit or access to advanced diagnostics. You can see a few of those highlighted here. AIM Specialty Health, Beacon LBS, Evicore Healthcare, to name a few. These are these genetic benefit managers or laboratory benefit managers. Essentially these intermediaries are stepping in to provide payors with the tools to control costs and appropriate access for advanced diagnostics. Some case examples are United Healthcare and Anthem through AIM Specialty Health have implemented prior authorization programs for testing. ACSC as contracted with Evicore to manage outpatient genetic and molecular testing. We're increasingly seeing this role for GBMs and LBMs to enforce evidence based policies and ensure that lab based testing is medically necessary. This puts further pressure on the need for evidence of clinical validity and clinical utility.

I think we also as I mentioned, do quite a bit of primary research with payor and specifically medical directors at national and regional plans in the US. Not surprisingly, when we ask what elements have the highest impact on a health plans coverage and reimbursement decision for a novel molecular diagnostic, clinical evidence rises to the top. As does action ability of genes. This is a question we ask every year. You can see guidelines there's number three.

It's interesting is FDA approval, if you look at the responses from 2018 versus 2017 we see a slight decrease in impact. That may be nothing more than the result of a [inaudible 00:23:22] approval of NGS tests and therefor it may be declined. Important slightly since we not have FDA approved NGS tests.

Some observations, I think clinical evidence supporting the validity and utility of the test is rated as most influential in coverage determination. I mentioned the FDA approval decrease, slightly. I think health economic evidence noted as the lease influential in coverage decisions. It's important to point this out. It doesn't mean that it's not important. If it's least important perhaps in the elements that we test but, I think that the default by many innovators and labs is we need to show costs savings or some sort of health economic argument. I would say that really, there are other priorities and those are first and foremost associated with clinical evidence and the action ability of genes. What impact does our test have on clinical practice and physician decision making?

National Coverage Decision

I wanted to talk a little bit about some NGS testing in advanced cancer and the national coverage decision which I mentioned earlier. CMS has essentially created two pathways for coverage for NGS in advanced cancers for FDA approved or cleared companion diagnostics. This is the NCD, National Coverage Decision or the MACs and that would be a LCD. The NCD, the National Coverage Decision that was issued earlier this year, preserves a Medicare coverage pathways for laboratory developed tests through the LCD process or the MACs. This was really codified in March of this year.

You can see under the NCD, CMS identified covered assays under the NCD on the right there. That was FoundationFocus CDxBRCA test, F1CDx, Foundation Medicine. Oncomine Dx Target Test from Thermo Fisher and the Praxis Extended RAS Panel from Illumina. I think the key question here is now what happens with private payors. Although this has been obviously a substantial accomplishment and advancement for access to NGS testing.

Our view right now is that commercial payors are not significantly influenced yet by the NCD. As I mentioned earlier, the standards of coverage are different, with commercial plans. So, while it is influential we haven't seen obviously private payors uniformly follow suit with the NCD. I think some of the restrictions that private payors are using based on our interviews with pathologists include prior authorizations and limits on specialties to oncologists ordering testing. These are administrative restrictions but, you can also see some of the other restrictions that private payors are putting on them. They could be putting these restrictions on testing through their LBMs or GBMs. These would include things like limits to specific tumor types, limits to cancer patients of a specific stage of severity, some sort of testing approach that's essentially based on treatment of failure and step editing or providing coverage conditional of further evidence development. You can see some of the verbatim from payors on the right, here. Let's go to the next one.


I think I've been talking about evidence quite a bit so let's get into the details of what that evidence looks like and where we need to go. Critical to payor acceptance of advanced diagnostics and NGS will be robust evidence development. There's an established model here, an evaluation process for genetic testing known as the ACCE model which we have on the right. At its highest level it includes three components. Evidence to support analytical validity, so the ability to accurately and reliably measure the genotype of interest.

Clinical validity, this is the testability to detect an associated disorder. Then clinical utility, the risks and benefits associated with a test's introduction into routine practice including health outcomes. It's really these last two that's primary focus of payors. Clinical validity, does what we're testing for have clinical relevance and then of course what is the use of that result. Does it result in a practice change, does it result in an outcome change and so on.

We talked a lot about payors needs for evidence. I don't want us to forget about what clinicians need. I think clinicians also need compelling evidence. Here's just a snap shot of some work we did earlier this year looking at two products and just to highlight the kinds of responses we get from clinicians. Looking for large studies. Hundreds of patients. Study durations that will lead to outcomes around survival. Perhaps overall survival. Or certainly PFS and RFS.

You can see although we emphasis designing evidence to support payor acceptance, clearly we will need to have evidence to support clinician adoption and that would include eventual guidelines inclusion.

Case Study: Afirma

I'm gonna highlight a case study around tying evidence to payor acceptance. This is a case study that's been interesting to watch because of the very direct relationship in a way that repeatability with which the payor acceptance was really driven by the development of evidence.

We're gonna focus on a test known as Afirma. This is a test offered by Verocyte, a company in the bay area. The Afirma test uses RNA sequences and machine learning to identify benign thyroid nodules among those deemed indeterminate by cytopathology so that patient can potentially avoid surgery and instead be monitored with CT imaging. The test was launched in 2011. Verocyte invested in conducting multiple clinical utility studies showing decision impact and ultimately impact on clinical outcomes. Let's get into that.

Just wanted to show some of the key evidence based mile stones for this test. We mentioned the test launched in 2011. It wasn't long after that the test was accepted into the MolDx program, which we covered. You can see some of the evidence milestones on the bottom of this revenue line. That is health economic and accuracy verus FNA studies were published. This is really setting the stage for establishing the problem. Let's make payors very aware that there is an economic issue, an economic challenge, with the current approach to care.

Then, the next study published in 2012 was focused on clinical practice impact of the test. Showing in fact, how the Afirma test changed physician behavior and referring patients to surgery or ongoing CT monitoring. This led to an NCCN guidelines recommendation in 2013. We also started to see in 2013 commercial plan coverage at the national level.

Then, five clinical utility studies were published in 2014. While clinical practice impact is a form of clinical utility, additional clinical evidence was generated so there was a sustained investment in evidence. You can see that over the next three years and the associated increase in revenue. Finally, in January 2016 MAAA category 1 code was assigned. Early investment in evidence generation resulted in Medicare and commercial payor coverage as well as clinician uptake. The result of course is wide coverage by commercial payors of the test and development supported by the development of clinical utility evidence.


I'm gonna touch briefly on the coding landscape. Then we get into some conclusions. Coding, I think this has been obviously an issue that his the US. It's quite complex. Just different types of CPT codes used in diagnostic tests. Advanced diagnostics. You're familiar with many of these. Genomics sequencing procedures, GSP codes. These include DNA, RNA sequence analysis methods for multiple genes or genetic regions. There are two codes here. There's a 550 gene code and a code for panels of greater than 50 genes. There's the molecular pathology tier one and tier two codes. These are assigned when markers achieve a certain volume. These would achieve a tier one status or perhaps lower volumes would achieve a tier two status. You see some examples there of these single marker codes. EGFR, BRAF as examples.

MAAA codes or “Ma codes”, these are unique to a single clinical lab or manufacturer. They represent algorithmically combined results of multiple combined results of multiple analyses to obtain a risk score for example. An example we give is Genomic Health Oncotype DX breast, test.

PLA code is a relatively new code set that was introduced in 2017. These are codes specific to a test provided by a sole source laboratory or licensed or marketed to multiple providing laboratories. It could be a kit as well that could secure a PLA code. Propitiatory laboratory analysis, so this is FoundationOne Cdx is an example of this and Oncomine DX Target Test also has PLA code.

Then miscellaneous codes. These are non-specific codes often used by laboratory innovators to describe a novel panel or a novel assay.

So, you can see these approaches ranked by funding reliability and the way we describe that is, “Will there be payment at the end of the rainbow and will that be routine?" That's what we mean by funding reliability. We put proprietary laboratory analysis codes or PLA codes at the top because they do go through a payment assignment process. An example there is FoundationOne Cdx. Genomic Sequencing Procedures are these GSP codes and gave you example of those codes. Those codes also have payment assigned by Medicare. They were created in 2014 but now both of these codes have established payment.

Stacked codes, this was a coding approach that I think really was the predecessor to many of these novel coding types. Where labs bill for individual genes included in NGS panel. Commonly used by labs to maximize payment but restriction on code stacks by Medicare that were put in place beginning in 2019.

Then, finally miscellaneous codes. Here there's no fixed payment so we find quite inconsistent payment from payors on these codes. Could be based on percentage of billed charges for example, private payor.

Payment Assignment

Let's get into payment assignment. I know we had some questions around what happens in various settings of care so I wanted to touch briefly on payment for lab testing and the 14 day rule. Specifically, as it relates to inpatient versus outpatient testing. In the inpatient setting, as you know, [inaudible 00:37:13] Hospital has paid a bundled DRG payment which is all inclusive. There's no separate payment for lab testing on an inpatient basis.

Outpatient setting, labs can get paid separately under clinical lab fee schedule for example, for Medicare patients. The 14 day rule is a Medicare regulation that restricts what types of laboratories can bill Medicare for certain services provided within 14 days of hospital discharge. This rule was really modified earlier this year where now Medicare allows non-hospital laboratories to bill Medicare directly for certain molecular pathology tests. That wasn't the case before. New rule makes those tier one and tier two MoPath codes, GSP codes, MAAA codes and PLA codes eligible for separate payments.

I do want to highlight this is for molecular pathology so, things like [inaudible 00:38:10] Chemistry would not call under this new rule revision. Another component of this is hospitals can no longer bill on behalf of labs for molecular pathology testing that is performed by a reference or specialty lab. Now that billing has to be done by the lab itself. That was a key change earlier this year.

The way that payment is assigned, I think we wanted to highlight this for you. We talked about the clinical lab fee schedule under Medicare and you can see that this is a key mechanism for separate payments. It is the most prevalent means of payment for outpatient testing. These usual customer reasonable charges, this is usually some sort of prevailing rate has been set for separate payment.

There is a client/professional billing approach which payment is secure from a physician practice or hospital so payment is provided from provider, not the payor. Obviously there's some changes to that approach under the Medicare 14 day rule.

Capitated contracts. We see these in some cases but, these do not provide for separate payment nor does exclusive contracting. It's a variation on a capitated approach. There's “pass-through” or “carve-out” where relationship between a lab, a sample is handed off to another lab to performing testing and the lab performing the test can bill or have the referring lab bill on its behalf. There are some obviously state level restrictions that are key to this, but it could result in separate payments.

Finally, global payment, typically associated with inpatient as I mentioned earlier there is no separate payment for testing under that scenario.

CMS processes for establishing payment. We want to highlight these. Two basic flavors of this. There's crosswalk approach and the gap-fill approach for a novel test. Each year new or substantial revised codes can either be cross walked or gap-filled to determine the payment amount that is then seen on the clinical lab fee schedule. So, under the cross walk scenario, CMS assigns a value to a new code by linking the payment rate to an existing test comparator, perhaps with similar clinical value or similar work value. The advantages or course is its visibility. It's definitive payment rate is assigned and available immediately. The disadvantage of course is evaluation might not result in increased differential payment for the new code. It's clearly cross walked to an existing code.

The gap-fill approach under this CMS does not assign a value immediately but, it's really more of a market driven approach. Its approach where gap-filled rates are calculated based on MAC reporting and essentially under PAMA this means labs are required to report private payor rates and volume data, if they have Medicare over 12,500 from the laboratories services. Here I think again it's under the gap-fill approach National Payment Rate is unavailable for commercial payors to benchmark until one year after the code is effective. Evaluation may not result in increased differential payment for the code but, it also could result in differentiated value.

Payment assignment process and this is under PAMA. Here again, I mentioned this laboratory reporting requirement. There has been some controversy around that and maybe altered in the future but, here for tests furnished on the lab fee schedule after January 2018, Medicare was based on this waited medium of private payor payment rates and reported by labs. The CMS definition of an applicable laboratory excludes hospital labs as well as 94% of physician office labs and 52% of independent labs. Large reference labs are the primary contributors of data for all tests labs report for private payor for test reimbursement or payment rates in volumes every three years.

Then there's an adjustment in these clinical lab fee schedule rates. Essentially data is collected and measured every third year for three years and adjustments in the fee schedules. This is kind of ongoing adjustment based on private payor rates of Medicare payment.

What this has done, and this is the first iteration of this, you can see were comparing the national limitation amount in 2017 versus 2018 and you can see there were clear winners and losers here. We highlight all the way to the right the GS sequencing procedure, 51 genes or more was assigned at 2920 dollars and some other codes increased such as BRACA and GSP550 increased slightly. Other tests pay rates were not increased year over year. PAMA will ensure that these codes are revalued based on these kind of prevailing rates.

Keys to Success

So, I want to wrap up with some of the keys to success here. I'm coming at this from both the laboratory innovator but, also I think any one who's innovating in this space on the provider side and key considerations. We certainly have to balance payor and physician or patient needs. That's really supported by clinical and economic evidence. We need a high quality test, to be actionable, turn around time, actionable reporting. Again with that end goal of showing clinical validity, clinical utility, economic utility and really leading to coverage and access. So, it's important to support these processes ultimately driving guidelines inclusion and key opinion leader support.

The key to successful commercialization is development of a strategic approach to clinical and economic evidence that clearly communicates the value story. I think to do this of course in addition to strategy development it's going to take some key tools that will be used to communicate value to payors. Certainly, a payor coverage presentation, this is a brief presentation that succinctly makes that case for coverage. It's going to have key evidence elements in it. This will be really supporting engagement with payor decision makers for coverage of a test.

That's supported by a longer document, a [inaudible 00:45:41] dossier or a payor monograph. That essentially will be an aggravation of the evidence of both the clinical and non-clinical values of the assay. payor data binder of course has all the key supportive studies. We have cost/budget impact models. Again, I stress that health economics, it's not the lead typically but it doesn't mean it's not required. So, I think we do need to be prepared at least to show the economic impact of testing on a payor. payors business impact but ultimately it's not going to be the highest priority. It's really going to be that clinical impact that will be the highest priority.

Finally, understanding your payor. Profiling that landscape of payors that details account level information. Understand what's important to each payor type. Whether their evidence needs what the timing for review and so on.

Finally, once these tools are in place, being prepared to engage payors strategically. That would mean engaging both the top down and bottom up approach. Top down, of course, direct engagement with key decision makers. Really to drawl a positive coverage policy and this routine reimbursement or routine payment supported by some of the tools that I've described earlier. And, this bottom up approach, critically important, really working at the grassroots level to make sure that each test request is supported by the appropriate documentation. Managing these prior authorization requests appropriately. Aligning with the payor for coding approach and making sure we're able to support any denied claims with additional information to ideally lead to a positive payment decision.

Really, strong relationships are critical. I think we're often surprised by the disconnect sometimes between the pathologists and oncologists. I think as the number of tests proliferate, the number of drugs proliferate in oncology it's going to be very important for these two specialties to work very closely together and make sure pathologists have a clear understanding of what the oncologist is after and oncologist understand things like reflex testing and the testing selection decision making that's going on at the pathology level. It will be very important to cement these types of relationships and make them stronger to really make this complex testing paradigm work.

So I just want to highlight, I'll wrap up here. Keys to success. Strong value and quality story. We highlighted that. Developing compelling communication tools to communicate that value supported by evidence. Engage clinicians and payors early. And of course don't forget the key administrative elements to actually make the logistics of this all work.

Questions and Answers

Q: What role does the molecular diagnostic lab play in prior authorizations, if any?

A: I think that here, certainly providing the necessary documentation is critical and that would include at a minimum medical necessity. It could include certainly any evidence documentation. These are all tools that would be needed to support prior authorization.

Q: Do larger labs have contracts with each insurance provider regarding CPT and reimbursement? It would be nice to know how other labs are navigating these challenging waters.

A: Yes. In many cases larger labs will have these contracts in place to routinize reimbursement. I would say in this space it's probably not as prevalent as for very well established testing paradigms so I will say we would expect contracting and established contracting to increase in this space as the paradigms become more codified.

Q: How should we review individual MolDx policies from different contractors and the differences between Palmetto verses Meridian for the same test?

A: Well, I think it depends certainly on where your lab is located. So, if your lab is located in Palmetto jurisdiction then clearly, be focused on that Palmetto approach. I think as a test innovator, might take a different approach. You'd have to be concerned about all three. There may be differences between these three approaches. MolDx and Novitas for example.

Q: How do payors feel about prior authorization of targeted therapies and genomic testing tools? It does not seem like long term solution for greater access to precision medicine.

A: Yeah, I think that it is a key gate in oncology. Almost every thing is prior auth required. We really don't view prior authorization in the oncology space as a major barrier to access. I think they're many other barriers that payors could put up. Many of the prior authorization requirements we see are around things like limitations to specialists, what other prior testing may have been offered. I think that those issues are kind of in a way minimal restrictions compared to other restrictions they could put in place. I would say that, yes, I guess on the surface it doesn't seem it really promotes access. These are sort of routine barriers in oncology care and I don't expect them to go away any time soon.

Q: What role does the patient assistance program play during the time frame of determining payor coverage?

A: I guess here, the patient assistant programs that we've seen that have been successful have obviously been kind of means driven. To really support patients who either can't afford co-insurance requirements or some other tests payment requirement. I think those have been the most successful programs. Generally, payors put things like co-insurance and co-pays in place for a reason and that is to essentially help to manage demand for some other these tests. But, I think the patient assistance program is means test driven. We've seen those to be the most successful in promoting appropriate access.

Q: Do we expect Medicare NCD billing guidelines to include language allowing local labs to drive coverage?

A: I think this is a complex question. Obviously these NCDs that have gone through substantial evidence has been required. I think there is a pathway already for laboratory developed tests that's been established so, I think that pathway is there and I think that pathway will remain. How that translates into an LCD versus an NCD, I think at this stage, I think there is a pathway for an NCD that's been established. It has certain requirements. I didn't go into those details here on this call but, I think that I'm happy to follow up on the details of that. I think they're pathways for both. I think it allows for both lab level innovation and obviously innovation supported by substantial evidence.

Q: One of our recommendations was a bottom up approach to addressing reimbursement. Do we have any recommendations for how to better encourage provider involvement without sacrificing ease of use?

A: I think this definitely goes back to that communication between oncologists and pathologists. Also, I think some of it is the tools available at both the oncologist and pathologists level to help manage these. I know there's some IT tools that help these providers navigate what's covered and what's not. What's required to be submitted under a prior auth and so on. I think once oncologists, in our experience, once oncologists understand the complexity of this environment, I think if the pathologists can provide, in a way, some kind of tutorial to oncologists about what will be really needed here to secure test reimbursement and the kind of information that would be needed from the oncologists. Streamlining that information flow I think will be critical in supporting, ultimately navigating this landscape.

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