Payer's Goals for Pre-Authorization, Medical Necessity, and Pricing for Molecular and Genetic Tests. Trisha Brown, MS, LCGC Shama Consulting, LLC
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1 Payer's Goals for Pre-Authorization, Medical Necessity, and Pricing for Molecular and Genetic Tests Trisha Brown, MS, LCGC Shama Consulting, LLC
2 Conflict of Interest Statement Former employee of DNA Direct, a company that provides pre-authorization services for molecular diagnostics Current President/Founder of Shama Consulting, LLC
3 Agenda Current Payer Policies on Genetic Testing Medical Necessity Utilization Management Companies Current Issues with Pricing and Reimbursement Q&A
4 Coverage Policies & Pre-Authorization
5 About 2-3 genomic tests are added to the market per week 1 making genomics one of the fastest growing segments, expect to be worth over $4B by Over 20% of tests, and for some tests >60%, are ordered inappropriately 3,4 1. Gwinn M, Grossniklaus DA and Yu W. et al Horizon scanning for new genomic tests. Genet Med 13(2), (2011) Internal data, DNA Direct 4. Shah et al Personalized Medicine. 2011;8(5): Chart, Internal data, Medco Health solutions
6 Payer Policies on Genetic Testing Policies are developed to: Improve appropriate utilization Control Costs Educate providers and members What policies exist? DNA Direct undertook a study on this, to be published in May 2013 in Personalized Medicine
7 Payer Policies on Genetic Testing Identified payers with >50K covered lives from the 2011 Atlantic Information Services Directory of Health Plans. 206 had 50,000+ members, of these 39 had 1M+ members. Throughout 2012, publically available documents were reviewed for policies regarding genetic tests (excluding infectious disease).
8 Payer Policies on Genetic Testing Overall, 22% of payers with 50K-1M members had publically available policies as compared to 77% of payers with >1M members. 98% (n=65) of those with publically available policies had at least one policy that addressed genetic testing. The average was 13 policies with a range of These policies addressed, on average, 38 specific tests (range 0-155). Sixteen tests appeared in 30 or more policies.
9 Payer Policies on Genetic Testing Most commonly addressed tests BRCA1/2 Oncotype Dx-breast cancer HNPCC FAP Long QT MYH Polyposis Mammaprint MSI/IHC colorectal tumor screening Warfarin response genotyping Kras Cystic Fibrosis Mammostrat Oncotype Dx-colon cancer Plavix response CYP450 variant testing (general)
10 Payer Policies on Genetic Testing General themes included: Pretest Process Genetic counseling required-40% Informed consent required-11% Three generation pedigree required-2% Medical Management Test must impact management-51% Clinical diagnosis must be uncertain-25% Pre-symptomatic testing covered- 48% Excludes testing children for adult onset disorders-2% Test Test must be scientifically/clinically valid-25% Tiered approach to testing when possible-2%
11 Medical Necessity
12 Understanding Medical Necessity Medical Necessity conversations happen in two contexts: Policy Development & Contracting Can the lab demonstrate the value to the member and the payer to the extent that the payer is willing/able to make policy changes and/or incorporate the test in a contract? ROI strategies and alternative pricing strategies can be reviewed at this level Medical Director Review of a Member s Pre-auth or a Claim Can the ordering physician demonstrate that the test requested meets the coverage policy, if one exists, and will the test change the member s care? The medical director will not necessarily consider the finances involved from a business perspective, but rather think of the medical value of the test. This may or may not consider the impact on downstream medical interventions (costs) associated with the test.
13 Understanding Medical Necessity- Policy Themes Test must be analytically and clinically valid Typically documented through evidence based, peer-reviewed literature. If only internal data is available, be prepared to share that data as needed. Test must impact the medical management of the patient The member s medical issues must be made clear and be as specific as possible The change in management that would occur should be laid out specifically, and is supported by evidenced based, peerreviewed literature
14 Pre-Auth Language to Use- Specific Policy Example Insurers with > 1M members have specific test policies on an average of 50 tests (range 0-155) Determine if the test being ordered has a specific coverage policy available Address each point in the policy Example: Celiac Disease: Genetic testing for HLA-DQ2 and HLA-DQ8 haplotypes is considered medically necessary for members with symptoms suggestive of celiac disease and indeterminate serology results. Letter of Medical Necessity must include specific symptoms member is having and the specific indeterminate serology results.
15 Pre-Auth Language to Use- Be as specific as possible General Example Provide as much documentation and peer-reviewed evidence based guidelines/literature as possible. The less research and time the plan medical director must spend on the case review, the better. Include ICD9 codes, CPT codes, indication for testing, how the test is analytically valid, the clinical utility for the test, and how the test will specifically change the member s care.
16 Medical Necessity Language to Use- General Example Mrs. X is a 34 year old female with chronic nosebleeds and skin telangiectasias. She reports a prior episode of blood in her stool with no etiology found. She is adopted, so limited family history information is available. Her history is highly suggestive of hereditary hemorrhagic telangiectasia. (Describe HHT, diagnostic criteria, include references). For Mrs. X, diagnosis can only be verified by genetic testing, which can identify >87% of patients with HHT (references). If HHT is diagnosed, Mrs. X will be undergo routine surveillance for arteriovenous malformations and anemia, and be counseled on prophylactic measures including antibiotics prior to invasive procedures, such as dentistry (references).
17 Pre-Auth Language to Avoid Mrs. X needs [test] because it is the best, most comprehensive panel on the market. Doing a panel instead of an individual gene approach is cost effective. If the test is positive, her care will change. Johnny has global developmental delay. He needs this test for us to know what to do next. Mr. Jones has cancer. Genetic testing is recommended by NCCN (National Comprehensive Cancer Network)
18 More on Medical Necessity All denials can be appealed. Multiple levels of appeal exist, the final appeal is usually with an independent third party and the payer may rather entertain the claim then send out the request for an appeal. Payers care about what the State Insurance Commissioner might think. Payers care about what headlines might result in the media. Some see white space here to help payers develop policies and processes around genetic tests and medical necessity.
19 Utilization Management Companies for Genetic Testing
20 Utilization Management Companies for Genetic Testing Company Policy Consultation Case Review Pre-Authorization Program Claim Review Pricing Guidance Lab Network Management Claim Processing McKesson Corporation CareCore National/DNA Direct Informed Medical Decisions Beacon LBS Generation Health- dissolved in 2012
21 Utilization Management Companies for Services Offered Policy consultation Genetic Testing Provide policies, write policies, edit current policies. Guidance on new CPT codes offered. Case Review Provide coverage opinion on specific pre-authorization requests, claims, or appeals at the request of the plan medical director. Pre-authorization program Process to review pre-test coverage requests, and/or Medical necessity review, and/or Lab network adherence.
22 Utilization Management Companies for Genetic Testing Claim Review Review an individual claim to determine payment, and or Review plan claim data to aid in determining if a pre-authorization program could be of benefit Pricing Guidance Provide recommended pricing for new CPT codes, and or Advise on lab network contracting Lab Network Management Direct tests to in network labs and/or Develop and manage a lab network on behalf of the payer
23 Utilization Management Companies for Claim Processing Genetic Testing Validate a claim file based on pre-authorization data or algorithms, and or Adjudicate a claim file based on pre-authorization data or algorithms The UM market for genetic test remains nascent. Payers may not perceive the growth in genetic tests as a problem, or they may have their own internal program that they either can t outsource or feel they don t need to. Some have responded by simply stating, we don t cover genetic tests.
24 What Payers are Managing US HealthCare Spend 2010: 2.6T 8% 9% 24% Hospitals Physicians Home Health 28% 29% 2% Rx Other Routine Lab Esoteric Genetic Created from data in the G Lab Industry Report and
25 What Payers are Managing Healthcare reform. ICD10 changes. Changes to EDI (electronic data interchange). Concerns about the silver tsunami - aging baby boomers and associated increased costs. New genetic CPT codes with mixed guidance on what to do and how to use them. Continued lack of transparency for some genetic CPT codes. Many payers choosing to wait and see before acting.
26 Pricing for Genetic Tests
27 Payer Goals on Pricing Transparency Old stacking CPT codes did not give payers transparency. New codes give partial transparency. Many don t understand the genetic terminology in the Tier 1 descriptors and are uncertain when to cover the test or not. Tier 2 still not transparent. Cost Control Perception that genetic tests are expensive and pricing is overinflated by labs. Many payers have difficulty looking at past claims data to determine true spend on genetic tests.
28 Headlines Influencing Payers With $1K genome in 2012, the decline in sequencing continues to exceed Moore s Law At least one analyst group predicts NGS manufacturers will earn $1.9B by
29 Pricing & Reimbursement 2013
30 Pricing & Reimbursement 2013 Some had no plan, adopted a pure wait and see approach Many did a cross-walk to old CPT codes, but unsure on pricing, want to use old CPT codes Poor communication with internal coding groups and with data exchange vendors
31 Pricing & Reimbursement 2013 Early data shows lots of non-payment and denials across Medicare, Medicaid, Advantage and commercial plans. Some report Medicaid reimbursement, but widely different rates between states. Some report commercial plan reimbursement at 16-20% above Palmetto rates.
32 Pricing & Reimbursement 2013 Adopted new pricing based on feedback from internal analysis, labs, UM vendor or Palmetto rates Rates vary by test from 5-150% above and 150% below Palmetto rates Test CPT Palmetto 1 A 2 B 2 C 2 CF sequencing $1,550 $1,100 $1,700 $800 MSH2 gene analysis $543 $302 $350 $ vmenu= as accessed on 4/27/ Personal communications
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34 Q&A THANK YOU Trisha Brown
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