The story has been updated to include comments by Castle Biosciences.
NEW YORK – Medicare administrative contractor Palmetto GBA has declined to cover molecular risk stratification tests for cutaneous squamous cell carcinoma (cSCC), including Castle Biosciences' DecisionDx-SCC test.
According to the final local coverage determination posted last week, Palmetto believes that patients with cSCC "stand to benefit from improved risk stratification to identify those at highest risk of poor outcomes." However, to demonstrate clinical utility, a new biomarker must provide additional risk stratification to currently available risk stratification measures, such as the combination of staging and clinical and pathological factors, within a guideline-based standard of care therapeutic framework to "meaningfully reclassify patients with respect to clinical decision thresholds in a manner that improves patient outcomes." In Palmetto's view, this hasn't been demonstrated by any existing tests, including the DecisionDx-SCC assay.
The new LCD finalizes a draft decision posted in June 2023.
The intended-use population for Castle Biosciences' test includes cSCC patients with one or more high-risk factors, which Palmetto said is "too broad" and includes patients who are unlikely to benefit from the test's results. The assay is also intended to be used in combination with current risk-assessment tools, but peer-reviewed publications to date have not demonstrated clinical validity and clinical utility in this clinical context, Palmetto said, adding Castle Biosciences' publications have proposed frameworks for the clinical use of the test, but they are "inconsistent" and have not been validated or supported by independent experts outside of the company.
"While there is potential for the [test] to identify patients who are at highest risk of metastasis and for selection of patients for specific treatment options such as adjuvant [radiation therapy], this has not been convincingly demonstrated at this time," Palmetto added.
The National Comprehensive Cancer Network expert panel on cSCC has also stated that molecular risk stratification tests have not yet demonstrated additional prognostic benefit over traditional staging in "very high-risk" squamous cell carcinoma, Palmetto said.
Palmetto also noted that the test's performance has been measured in predominantly male and White populations and said that the risk of metastasis is higher in patients of color, leaving a possible evidence gap. Further studies "should include representation of test performance characteristics inclusive of and addressed in patients of color."
In an email, a spokesperson for Castle Biosciences said its DecisionDx-SCC test is supported by "robust validation data in the intended use population," and since draft decision was posted last year, the firm has published "additional peer-reviewed papers addressing the perceived gaps in data that appear to have been overlooked by Palmetto."
She pointed to a study demonstrating the ability of the test to identify patients at the highest risk of metastasis who will benefift the most from adjuvant radiation therapy, and high-risk patients identified to be at lower risk of metastasis who could choose to defer treatment.
She also mentioned a separate study that demonstrated that wen used with traditional clinicopathologic staging factors, DecisionDx-SCC "engendered significant improvement in accuracy for the prediction of metastatic events..
Nonetheless, Palmetto's fellow MolDx contractors Noridian Healthcare Solutions, CGS Administrators, and Wisconsin Physicians Service Insurance Corporation aligned their noncoverage decisions with Palmetto. The decision goes into effect on Aug. 18.
Castle's shares declined by 18 percent last week following the news, but BTIG analyst Mark Massaro wrote in a note to investors that there are two possible paths for Castle to maintain its Medicare coverage of DecisionDx-SCC. CMS contractor Novitas may recommend a final positive LCD or retire its draft noncoverage determination for the assay and uphold its existing positive policy. Novitas' decision is expected by the end of August. Castle runs its DecisionDx-SCC test out of its laboratory in Pittsburgh, which is under Novitas' jurisdiction, so Palmetto's noncoverage decision may turn out to be a "non-event," Massaro wrote.
Novitas previously rescinded coverage for multiple cancer genetic tests, including DecisionDx-SCC, and later rescinded its noncoverage decision.