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Disclosure: Short Exact Sciences (EXAS).
As mentioned in my update post a few weeks ago, I have a bit more to say about the Medicare reimbursement rate for Cologuard, the new code G0464 on the 2015 Clinical Lab Fee Schedule (CLFS). After some confusion and an apparently erroneous initial upload of the CLFS rate document (.zip) by CMS, most market commentators seem to believe that the payment amount is now set in stone. One sellside analyst even referred to the most recent update as the “final final” reimbursement amount.
Not quite. While the 2015 determination is now complete, the basis for and amount of payment remain open to reconsideration requests, a statutory process that would affect the reimbursement rate beginning next year. Historically, most reconsideration requests have been submitted by test sponsors whose tests have been denied payment, but the process is open to any interested member of the public. I believe that the concerns raised in my comment letter have yet to be addressed, and Cable Car has requested that CMS reconsider its decision accordingly.
I encourage interested readers to read the reconsideration request in full. My letter lays out additional concerns raised by the original CLFS posting and the substantial variation in locality-level payment amounts. Apparently, Medicare reimburses tests for patients nationwide at the payment amount for the lab in Wisconsin where they are processed. I find the payment level particularly egregious in light of the fact that several local Medicare contractors have determined that a more cost-effective reimbursement rate would be nearly 50% lower than the NLA.
Several technical aspects of the payment determination remain unclear. Why exactly is the Midpoint (the median of the 2015 updated Base Fee Amounts from all Medicare Part B Carriers) for code G0464 slightly less than the sum of the Midpoints of the 3 crosswalked codes in each region? Did CMS intend to classify G0464 as other than a “new test” under section 1833 of the SSA? Why did NGS set different payment amounts in Jurisdiction 6 (which covers Exact Sciences’ lab) and Jurisdiction K? What rationales may have been offered by other commenters that led to the final payment determination?
Cable Car intends to pursue Freedom of Information Act requests in order to better understand how the payment determinations were reached and why the local Medicare contractors reached different determinations. Candidly, I am not a medical billing expert, but I do feel strongly about what the public health economic data indicate about ideal reimbursement levels for a population health screening test. I would welcome further clarification from specialists.