NEW YORK – Multiple coverage and reimbursement decisions from the US Centers for Medicare and Medicaid Services had a significant impact on the in vitro diagnostics industry this year, and as a new presidential administration prepares to take office, CMS's priorities may change further, potentially affecting coverage and reimbursement for test makers and labs.
One of the key reimbursement decisions in 2024 related to a previous decision made by the agency in 2023 covering genomic sequencing procedures. Last year, CMS adopted six new CPT codes related to genomic sequencing procedures: three for tissue-based testing and three for cell-free DNA testing. After adopting those codes, CMS priced them at $597, a rate much lower than recommended by its advisory panel and requested by industry stakeholders.
After pushback from laboratory organizations and diagnostic companies, the agency chose to postpone its pricing decision and gapfill those codes instead, which requires reaching out to each CMS jurisdiction, gathering data on the price of each code in that jurisdiction, and setting the price at the median rate. Earlier this year, the agency finalized the gapfilled prices for those six codes at rates ranging from $896.87 to $3,288.51. While those rates were significantly higher than the $597 rate, many stakeholders said they still felt the prices fell short of the time and resources required to conduct these types of tests and worried patients' access to the tests would be limited if laboratories couldn't afford to provide them.
The new rates for those six codes will go into effect on Jan. 1, 2025.
Another controversial decision made in 2023 that was further clarified in 2024 related to transplant test coverage. Last year, CMS implemented changes to the billing article covering solid organ transplant testing that limited reimbursement to one test per patient encounter, provided new coding to define surveillance and for-cause testing, redefined acceptable surveillance testing as only compliant for patients enrolled in centers that use surveillance protocols and would otherwise receive such testing, and eliminated reimbursement of for-cause tests unless they were used in place of a biopsy or to confirm biopsy results.
The changes worried stakeholders in the transplant testing arena, who said they feared equitable access to testing would be restricted.
In February, the agency issued a statement to clarify the changes, noting that the edits were made to reduce overutilization and emphasizing that transplant rejection tests would still be available to patients when medically necessary and ordered by a physician as long as they were billed in accordance with the local coverage determination (LCD).
The coverage article was also revised to list the specific tests it covers: CareDx's AlloMap, AlloSure, and HeartCare; Natera's Prospera; NephroSant's QSant; Transplant Genomics' TruGraf; Eurofins' Viracor TRAC; and Oncocyte's VitaGraft/Allaro Kidney.
Another coverage determination that met with outcry in the transplant testing space made waves this year. In August, Medicare administrative contractor Palmetto GBA said that it would not finalize a proposed LCD that would have changed coverage of noninvasive blood-based surveillance testing for solid organ allograft rejection as a result of public comments and further review of the evidence.
In contrast to its decision to maintain coverage of transplant testing, Palmetto this year declined to cover molecular risk stratification tests for cutaneous squamous cell carcinoma due to a lack of data demonstrating clinical validity and utility for use in combination with current risk-assessment tools. Castle Biosciences, which sells its DecisionDx-SCC test that would have been covered under the LCD, said that the company has published additional peer-reviewed data that was overlooked by Palmetto.
The agency also finalized its Transitional Coverage for Emerging Technologies (TCET) pathway this year, which would allow certain devices that have received breakthrough device designation from the US Food and Drug Administration to be automatically covered by CMS. The agency will accept up to five devices per year for the pathway and plans to finalize a national coverage determination for the devices within six months of FDA market authorization.
Meanwhile, CMS's MolDx program released an article in May that allows pathologists to directly order genomic tests. Medicare consultant Bruce Quinn noted that the decision "could speed up access to test results for tumor profiling by several weeks." However, Quinn said that it's possible private payors wouldn't agree with the MolDx stance and would deny tests ordered by pathologists, while pathologists may also be unwilling to deal with the burden of filling out prior authorization forms or other administrative tasks.
While not related to coverage, CMS also faced scrutiny from the US Department of Health and Human Services Office of Inspector General earlier this year related to its test rate-setting process during public health emergencies (PHEs). The OIG found that the agency's lack of communication with laboratory associations and Medicare administrative contractors (MAC), as well as a lack of flexibility in the MAC interim pricing process, led to initial COVID-19 test prices that were too low. This pricing potentially contributed to inadequate test availability early in the pandemic, the OIG noted.
COVID-19 tests were originally priced at $51 because they were crosswalked from a preexisting test for Zika virus that used similar methodology. However, the agency later raised the price to $100 per test to incentivize laboratories to conduct high-throughput COVID-19 testing. The price increase did not account for the fact that laboratories could reduce costs by increasing the amount of time that lapsed between the collection of a specimen and processing of the high-throughput test. As a result, CMS then set the new price for COVID-19 testing at $75 per test with a $25 add-on payment for high-throughput tests completed within two days of specimen collection.
OIG said in its report that CMS "may have missed opportunities to obtain important information from laboratory associations and the MACs' pricing coordinators" when making decisions about the new test rates that may have improved its response to the pandemic.
OIG also recommended that the agency establish new processes to improve communication among all stakeholders involved in rate setting during a PHE. In addition, it recommended that the agency provide MACs with flexibility to set and adjust payment rates to cover laboratory costs when responding to a PHE.
2025 expectations
2025 will usher in a new presidential administration that will bring changes in CMS leadership and likely shift priorities. Quinn noted that during President Donald Trump's previous tenure, CMS was "willing to try and break down some old barriers that were creaky and didn't really need to be there," and that willingness to adapt may be seen again under the new administration.
Quinn added that he hasn't heard much from Trump's administration about genomics or laboratory medicine, saying that the focus seems to be more on chronic disease.
He also pointed out potential issues with a significant national coverage decision that could come to a head in 2025. NCD 90.2 governs coverage of next-generation sequencing-based tests that are FDA-approved and specifies that "one test per cancer" is covered. This coverage policy is "increasingly in collision with the increasing use of [minimal residual disease]" testing and may be a "rising problem" in 2025.
Quinn said that in his view, "it is time to update the NCD to allow clear coverage" of minimal residual disease testing, which usually involves serial testing.