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Commercial Payors Unlikely to Follow CMS Policy on NGS Cancer Panels in Short Term, Survey Suggests

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NEW YORK (GenomeWeb) – The US Centers for Medicare & Medicaid Services has released the final national coverage determination for next-generation sequencing cancer panels, but most commercial payors have been fairly quiet about what they think about the policy and if they'll follow suit. 

A survey of 12 medical directors at commercial payors that consulting firm ClearView Healthcare Partners conducted before the final NCD came out in mid-March, revealed that they viewed CMS's proposal with caution, and many questioned whether NGS testing had demonstrated clinical utility to warrant broad coverage. Also, some of these directors had serious concerns about the methodology CMS used to develop the coverage determination.

At least in the near term, half the surveyed private payors had no plans to align with the government payor on coverage of NGS panels for their commercial plans, while the other half would be willing to cover FDA-approved CDx indications in the panels. "In this survey they were responding to the draft NCD, [but] the finalized version is even more expansive in its coverage, so they will likely be even less inclined to match their own coverage policies to what Medicare has done," said Charles Mathews, principal at ClearView Healthcare Partners and the author of the survey.

On March 16, CMS finalized a national policy in which it agreed to cover NGS cancer panels that are approved or cleared by the US Food and Drug Administration, in FDA-approved or -cleared indications, when test reports inform the care for advanced cancer patients. Labs that choose not to seek FDA review for their NGS companion diagnostic cancer panels are free to seek local coverage determinations through CMS's Medicare Administrative Contractors when the tests meet certain criteria.

In the final NCD, CMS expanded the definition of advanced cancer patients and agreed to cover not just NGS companion diagnostic panels with premarket approval from the FDA, but also with 510(k) clearance — a seldom used regulatory pathway for companion tests. Importantly, CMS entirely did away with coverage with evidence development proposals in the draft version that would have enabled FDA-approved or -cleared tests without CDx status to receive coverage when patient outcomes are collected in a prospective registry, and for lab-developed tests (LDTs) without the FDA's blessing when they're part of a National Cancer Institute National Clinical Trial Network study. 

These edits appeased the lab industry, patient advocacy organizations, hospital systems, and pathology groups, who had objected to the limited circumstances in which CMS had proposed to cover LDTs without FDA approval or clearance, and had taken their complaints to Capitol Hill. However, during this entire process, commercial plans have publicly said little, if anything, about their position on the CMS coverage policy. 

Previously, executives from two of the biggest commercial insurers, UnitedHealthcare and Humana, had said that wherever the final NCD lands, they would follow CMS's policy for the Medicare and Medicare Advantage plans they administer. "In the commercial space, we'll look at the merits of the test," Lee Newcomer, senior VP of oncology, genetics, and women's health at UHC, said at the Precision Medicine World Conference in January. "I believe CMS has been, let's say, not standard in their review. We'd look at each test and try to figure out whether there is evidence to support it or not." 

Both UHC and Humana declined to provide comments for this article. UHC said Newcomer has retired. Other national and regional commercial payors also declined to comment.

Still, commercial payors' stance on this is of obvious interest to the lab industry, particularly since Foundation Medicine, whose Parallel Review bid for FoundationOne CDx triggered the NCD, has maintained CMS's final determination extends coverage for the test in all solid tumors, not just in handful of FDA-approved CDx indications. If true, other labs could similarly garner FDA approval for their NGS panels that assess hundreds or even thousands of genes, and as long as they have at least one FDA-approved or -cleared CDx indication on the panel, they can claim national Medicare coverage for all solid tumors.

This would create an uneven coverage scenario for NGS cancer panels for Medicare patients and non-Medicare patients. Labs providing NGS testing have faced a difficult and unpredictable reimbursement environment on the commercial payor front, having to adjudicate and appeal coverage decisions on a case-by-case basis.

The data collected by Clearview Healthcare Partners show that commercial plans have not yet embraced NGS as a precision oncology tool that has proved to have broad utility in cancer. Among the surveyed medical directors, for example, 45 percent said they do not currently cover NGS tumor profiling tests and 55 percent said they only cover NGS testing on a case-by-case basis.

The surveyed plans — which together cover 44 million lives, or 14 percent of the US population — said they would comply with CMS's final NCD for their Medicare managed care covered lives. However, when it came to their commercial plans, the medical directors were more cautious. Roughly half indicated that in the near term they wouldn't align their commercial plans with the proposals in the draft NCD, while the other half said they'd be willing to cover FDA-approved NGS panels when they're used in companion diagnostic indications.

A few commercial payors were willing to cover NGS testing more broadly than CMS's national coverage policy, for example, lab-developed tests and tests included in clinical trials like NCI-MATCH.  

Commercial payors may also be closely watching how Medicare Administrative Contractors respond to CMS's national coverage policy. In the final NCD, CMS allowed LDTs without FDA clearance or approval to seek local coverage through MACs. While this brought much relief to the lab industry, it also raised questions as to whether MACs would start to require FDA clearance or approval for NGS panels (or ask labs to take tests through the New York State Department of Health) as a condition for local coverage.

But the MACs' reaction to the NCD — "that's the gray area you can drive a truck through," said Robert Feeney, marketing director of global lab relations at test commercialization firm Diaceutics.

Data collected by Diaceutics found that 39 percent of oncology NGS test claims have been denied by Medicare, because such testing has been considered investigational or a non-covered service. For NGS panels analyzing more than 50 genes, Diaceutics estimates that of the cases with available reimbursement data, 55 percent of claims have been denied. While CMS's NCD is expected to bring more predictability to coverage of FDA-approved or cleared NGS oncology panels, there's still much uncertainty around how MACs will behave.

One possible scenario Feeney and Jeff Schreier, Diaceutics' senior director of marketing, wrote about in a recent blog post is that MAC pricing for non-FDA-approved/cleared tests could be a fraction of what CMS pays for tests that meet the NCD criteria. This higher reimbursement, they wrote, could be the carrot that pushes more NGS test commercialization through the FDA path.

"Historically, private payors seem to follow the lead of local coverage decisions from MACs, because there haven't been that many national coverage decisions on oncology testing," Schreier said. "So, the private payors may wait to see what the MACs decide, in particular the Palmetto MolDx program, which has taken the lead on coverage decisions [for molecular diagnostics]."

Meanwhile, ClearView's survey revealed that medical directors at commercial plans also had strong reservations about the process CMS used to craft the draft NCD and the lack of data showing NGS panels are clinically useful broadly in the cancer population. One medical director said the draft policy showed CMS had "capitulated to political pressure," while another felt that the proposals were "the result of lobbying" from Foundation Medicine.

In comments to the draft NCD, many stakeholders from the lab industry and cancer centers told CMS that its proposals would enable Foundation to essentially monopolize the NGS tumor-profiling market.

The survey also captured private payors' concerns about the lack of clinical utility data on the use of NGS testing broadly in cancer. One medical director noted that NGS tests are "only useful in certain situations," and that "labs will still need to show medical necessity for coverage." Another noted that CMS's decision to cover FoundationOne CDx was not evidence based, and felt this was "very troubling since these are expensive tests and so far have no proven clinical utility."

These comments echo the worries of some oncologists and industry observers who have pointed out that current evidence supports the use of NGS in relatively few cancer indications. They further predict that CMS's coverage policy will drive greater NGS use and potentially harm cancer patients by directing them to off-label drugs that don't work or are too toxic. 

"These [commercial] payors are coming from a world where coverage policies for advanced diagnostic tests have been framed by reviews of the evidence of clinical utility, so it is only natural for them to question how CMS was able to look at the same data they have been looking at and draw a completely different conclusion," said ClearView's Mathews. "Because of the uniqueness of this process, Foundation Medicine and other NGS innovators will still need to think about how to develop and communicate evidence of value to commercial payors."

Commercial plans are guided by their own coverage policies on genetic testing, including NGS panels, and don't appear to be in a hurry to change them following CMS's final NCD, according to industry insiders. "There is so much inconsistency across these policies because of confusion around CPT coding, the technology, clinical utility, and the evidence, and we don't see that changing any time soon," said Mark Reis, VP of business development and lab markets at Prognos. The New York-based company uses AI and advanced analytics to help payors leverage real-time lab data to gain insights into utilization, risk adjustments, and close care gaps.

While private payors are certainly paying attention to CMS's coverage determinations, Reis doesn't see them aligning their commercial plan policies with the government payor in the short term. "When you look longer term, however, CMS's coverage determination does help as a data point," he said. "As we gain more evidence across the industry, which is going to be critical, there may be more alignment between commercial plans and Medicare plans."

ClearView's research also indicates that despite their current reluctance to cover NGS testing, private payors may soften their position in coming years. Over the next year to two years, 75 percent of the surveyed medical directors expect their commercial coverage of NGS testing in oncology will align with CMS policy. The rest maintained they would still only cover specific indications where testing has shown clinical utility.

"There is a feeling of inevitability I get when talking with commercial payors about their coverage of NGS," Mathews said. "They may complain about not having enough evidence right now, but deep down they know it is only a matter of time before they are compelled to pay for it."