Coalition for 21st Century Medicine Seeks Reconsideration of Drastic Gapfill Cuts to Innovative Advanced Diagnostic Laboratory Tests

Final rates inconsistent with extensive pricing information submitted to MACs, and contrary to the goals of PAMA and the promotion of precision medicine

Washington, D.C. – Today, the Centers for Medicare & Medicaid Services (CMS) released the 2016 Final Gapfill Payment Determinations for new CPT codes for a number of well-established, Medicare covered advanced diagnostic tests. The final rates include significant cuts of up to 36% to the current payment rates for these innovative tests, and will significantly limit patient access to standard of care precision medicine tests. The Coalition for 21st Century Medicine (C21) strongly opposed the cuts represented by the preliminary rates when announced in June, and will formally ask CMS to reconsider these rates during the reconsideration process taking place in the 4th quarter of 2016.

The payment determinations released today are contrary to CMS policy, and inconsistent with the extensive rate-setting information that was submitted to the Medicare Administrative Contractors (MACs) during the gapfill process. Despite these established payment rates and extensive pricing information, C21 is troubled that some MACs nevertheless submitted rates far lower than the existing rates for these innovative tests. This inconsistency is evidenced by the wide gap between half of the MACs who set rates consistent with the current Medicare rates and the other MACs, who inexplicably set rates drastically lower. It is also particularly problematic that several of the “low rate” MACs refused to meet with the laboratories during the comment period to discuss the rationale for the preliminary payment rates.

C21 is also concerned that if these rates are not revised there will be significant disruptions to beneficiary access in 2017 – the year prior to the implementation of the market-based payment reforms to the Clinical Laboratory Fee Schedule (CLFS) in 2018 under Section 216 of the Protecting Access to Medicare Act (PAMA). It is troubling that Congress would establish a new payment system tying Medicare payment rates to commercial insurer payment levels only to have some MACs cut payment rates by such drastic amounts prior to the start of the market based system. The extent of these rate cuts is also inconsistent with the intent of the PAMA law, which caps year-to-year rate cuts for existing tests at 10% for the first three years of implementation. Since CLFS rates for 2018 will be based on private payer rates from the first two quarters of 2016, CMS should revise the final gapfill determinations based on the PAMA private payer data collected by the laboratories.

At a time when the Obama Administration and Congress are promoting initiatives to advance precision medicine, we are concerned that the magnitude of these payment reductions will seriously risk continued innovation in precision medicine, and will have a negative impact on patient management. We plan to work with CMS through the reconsideration process during the 4th quarter of 2016 to ensure that final payment rates for calendar year 2017 for these advanced diagnostic tests are consistent with the gapfill criteria set forth in Medicare regulations as well as the value they provide in improving the management and health outcomes of patients and the importance of precision medicine to 21st century health care.

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The Coalition for 21st Century Medicine represents more than two dozen of the world’s most renowned diagnostic technology companies, clinical laboratories, researchers, physicians, venture capitalists, and patient advocacy groups. We’re working to ensure that high quality, innovative diagnostic tests – necessary to assure that timely and accurate information is available when diagnosis, prognosis, and therapy decisions need to be made – are available to patients and their physicians. To that end, we’re working with policymakers to maintain the balance between regulation and innovation and to ensure that regulatory policy promotes rapid access to new diagnostic information.