Registry for genetic tests and molecular diagnostic assays is one step in process to assess the science and clinical utility
Clinical laboratory and pathologists have dozens of questions about the proposed draft local coverage determinations (LCDs) that Medicare carrier Palmetto GBA issued on September 28. The draft LCDs represent Palmetto GBA’s efforts to identify the growing number of laboratory-developed molecular diagnostic assays and genetic tests.
In an exclusive interview with Dark Daily, Palmetto Medical Director Elaine Jeter, M.D., and Palmetto Vice President Mike Barlow explained the need for the new LCDs and offered insight into the process Palmetto GBA is developing to create a molecular test registry and a coverage determination and reimbursement process. This is an important development for the clinical laboratory industry.
To address issues triggered when clinical laboratories submit code-stacked claims for genetic tests and molecular diagnostic assays, Palmetto GBA has published two draft local coverage determinations (LCD). It also is taking steps to establish a registry for genetic tests and molecular diagnostic assays.
Palmetto GBA has given the name “Molecular Diagnostic Services Program” (MolDx) to this new effort. Pathologists and clinical laboratory managers can access the full explanation of this program by visiting the MolDx section of the Palmetto GBA website.
Code Stack Claims for Molecular Diagnostic Tests
Palmetto GBA is a Medicare Authorized Contractor (MAC) that serves Jurisdiction 1 (J1) and Jurisdiction 11 (J11). Two draft proposed local coverage determinations (one on molecular diagnostic tests (MDTs) and one on lab-developed tests (LDTs), and a molecular diagnostics pPalmetto GBA is a Medicare Authorized Contractor (MAC) that serves Jurisdiction 1 (J1) and Jurisdiction 11 (J11). Two draft proposed local coverage determinations (one on molecular diagnostic tests (MDTs) and one on lab-developed tests (LDTs), and a molecular diagnostics program (MolDx) have been proposed only for J1. If implemented, they would affect labs serving Medicare patients in California, Nevada, and Hawaii.
After January 1, Palmetto GBA will introduce these proposals in J11, meaning they will affect labs serving Medicare patients in South Carolina, North Carolina, Virginia, and West Virginia.
Jeter and Barlow pointed out that the practice of clinical laboratories and pathology groups to use methodology-based code stacks for molecular assays precludes identification of the assay actually performed. Use of such code stacks makes it impossible to evaluate the service rendered and the medical necessity for many molecular assays submitted for Medicare payment.
To address this problem, Palmetto issued two draft proposals in September. Dark Daily provided details of the two proposed local coverage determinations (LCD) last week. (See Dark Daily, “Palmetto, Medicare’s Biggest Carrier, Proposes to End Code Stacking for Molecular Clinical Laboratory Tests,” November 11, 2011.) As most pathologists and clinical laboratory managers know, Medicare carriers use coverage determinations and coverage articles to explain reimbursement decisions to physicians and other providers treating Medicare patients. The two draft proposals are titled as follows:
- DL32288—LCD for Molecular Diagnostic Tests
- DL32286— LCD for Non-Standardized Organ or Disease-Oriented Panels
Jeter and Barlow pointed out that a laboratory provider is required to identify and provide scientific data (analytical and clinical validity, and clinical utility) to establish the CMS (Centers for Medicare & Medicaid Services) requirement of “reasonable and necessary.”
Both draft policies have a public comment period that ends December 5, 2011. Clinical laboratory directors, pathologists, and other providers are encouraged to comment on the proposals until December 5. Because other MACs and private commercial payers are equally concerned about the rising cost and complexity of MDTs and LDTs, some could follow the lead of Palmetto GBA.
Unveiling MolDx—Molecular Diagnostic Services Program
Recently, after the public release of the two proposed LCDs, Palmetto GBA published details of its MolDx program. Under this program, Palmetto GBA will require that labs obtain a unique identifier (Z-code™) for each molecular assay. The Z-code will be applied in the claim line narrative/comment field for each code stack or NOC code.
Jeter emphasized that the Z-code is not a replacement for a CPT or HCPCS code. It is simply a unique identifier to help Palmetto GBA know what the service is for which it will pay. Clinical laboratories are required to submit the scientific data to support “reasonable and necessary.” Palmetto GBA will review and approve all molecular diagnostic tests with the help of subject matter experts, and publish a tech assessment summary. This process is needed to certify the science and clinical utility of each molecular and genetic test and to approve or disapprove each one for reimbursement, noted Jeter and Barlow.
Universe of Genetic Tests and Molecular Diagnostic Assays
“There is an unknown universe of molecular and genetic tests, and there is a lack of publicly available data on these tests,” said Barlow. “As a result, we felt we needed to categorize these tests into a registry so that we could identify each one and so that we would know the science behind them.
“For molecular diagnostic testing, Palmetto GBA did not know what was being brought forth from the various laboratories,” he added. “These are not your normal laboratory tests. There’s no code for these tests. Instead there’s a stack of codes.
“The number one problem with code stacks is Palmetto GBA does not know what test it is getting, and therefore it does not know what it is paying for,” observed Barlow. “As a result of code stacking, we have yet to see a single test that is wholly described or that accurately describes the complete process the lab used to run that test.
“The variables of how code stacks are used are subject to interpretation by each individual laboratory,” continued Barlow. “This means that each test developer is making a decision about what code stack to use—irrespective of whether or not it is the accurate code stack for the test.”
The proliferation of molecular tests and the practice of code stacking made the policy necessary, Jeter said. “Palmetto GBA needed a policy to identify each molecular test because it saw labs bundling tests together and then using this construct to bill Medicare for a series of tests,” she explained. “Yet some of the tests in that construct may be unsupported by the science.
Identifying Lab Tests That May Be Medically Unnecessary
“In a typical scenario, the laboratory has a clinician fill out the lab test requisition form and, when the physician checks off a certain panel, then the physician understands that he’s ordering a number of tests at once,” continued Jeter. “But we also see that the laboratories have a place on the form for physicians to check a single item for a comprehensive test. That single check allows the lab to perform three or four markers and/or tests which may or may not be necessary.
“Comprehensive testing may include risk assessment and screening for that patient,” she explained. “However, the Medicare program does not pay for risk assessment and screening. Palmetto GBA can’t sort out the actual diagnostic testing from the risk assessment and screening and so it pays for all of it.
“Therefore, we have to ask the laboratories to identify why physicians are using all these tests,” stated Jeter. “That’s why Palmetto GBA is asking the labs to explain the science and clinical utility of each test. If the laboratory cannot identify the reasons and science for each test, then it’s going to be non-covered.”
Barlow added that Palmetto does not want to stifle medical innovation. “The reason for the policy is not to restrict access, but to ensure that the access is available to the community,” he said. “The more we know about these tests the better. If we review these tests and decide that a test has validity, it will give the test a market in the healthcare delivery system.
“We are providing an opportunity to bring transparency to the process and to solve the identification problem by allowing laboratories to register every test they perform,” stated Barlow.
Molecular Test Registry Is One Step Toward Coverage Assessment
Barlow did want to emphasize the difference between the test registry and the coverage determination. “It’s important to understand that registration of a specific assay has nothing to do with coverage,” he added. “Registration simply explains the steps that a lab takes to get a unique identifier. With that identity, Palmetto GBA can then attach to it a coverage assessment of the science and the clinical utility of that test. Then physicians can make good clinical judgment about the utilization of that test.”
Jeter and Barlow urged pathologists, clinical laboratory directors, and any providers using molecular tests to comment on the Palmetto proposals. Providers can send an e-mail to J1B.Policy@Palmettogba.com.
The comment period is open until December 5. Laboratories should explain their concerns about the proposal so that it can be revised if needed and they should explain any concerns they have about the timeline as well, Jeter and Barlow said.
The Dark Report is preparing a more detailed story about how Palmetto GBA is developing a process to address the situation created by the use of code-stacking for genetic tests and molecular diagnostic assays. It will be published in the November 28 issue.
—Joseph Burns
Related Material
Molecular Diagnostic Tests (DL32288)
Non-Standardized Organ or Disease-Oriented Panels (DL32286)
Seeking Reimbursement Transparency, Palmetto May Deny Coverage for ‘Investigational’ Molecular Tests
Molecular Diagnostic Services (MolDx) Program Frequently Asked Questions
Molecular Diagnostic Services Program (MolDx) Timelines
This article provides timelines for the Molecular Diagnostic Services Program (MolDx) program
Molecular Diagnostic Services Program (MolDx) Test Registry Process
This article explains the Molecular Diagnostic Services Program (MolDx) test registry process.
