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Disclosure: Short EXAS.
A careful reading of the logistic regression in the Cologuard algorithm demonstrates that a positive result on the FIT component alone is sufficient to trigger a positive result on Cologuard.
After more than four months, I finally received a disappointing response from CMS to my FOIA request for copies of the other public comments submitted regarding the payment level for code G0464, which covers Exact Sciences’ Cologuard test. Had the FOIA request been processed within the statutory timeframe, I had hoped to incorporate counterarguments to any other concerns brought up by other stakeholders in my reconsideration request. As it turns out, that was unnecessary—there were none. CMS disregarded cost-effectiveness concerns on its own.
I was naïve enough to believe that CMS’ decision not to adjust its preliminary payment determination must have been at least partly guided by competing public comments. Indeed, this is what the former director of the Division of Ambulatory Services in the Hospital and Ambulatory Policy Group, which runs the CLFS rate-setting process, told me via email:
The comment period is an opportunity for commenters to share their thoughts with CMS. We do not respond individually to these comment letters. We take the information into consideration as we come to our final determinations. And, as you can imagine, often there are competing comments provided to us. [...]
In addition, we do not share proprietary information if it was shared with us in order to support a payment determination for either a crosswalk or a gapfill payment amount – that may or may not have been the case here. In coming to the final determination for this test code, as well as all of the others that were brought through the Annual Public Meeting this year, we carefully considered everyone’s comments, but that does not mean that everyone was satisfied.
I presumed that Exact Sciences must have submitted the purportedly more favorable cost-effectiveness study it has referenced in investor meetings but has never released to the public. (Investors learned on Exact’s Q4 conference call that its cost-effectiveness models are substantially identical to those used by CISNET, which determined that the test would not be cost effective nearly 8 years ago). At a minimum, surely Exact must have argued more than just the crosswalk rationale they presented at the public meeting in July.
As it turns out, there were only three comments submitted after the preliminary payment determination by CMS. One was my own. Another comment was from the manager of a well-known $400 million hedge fund. [Note: I've redacted his personal contact information by request]. His email concisely makes an important statistical point I did not reference in my own correspondence. Because Cologuard includes both a FIT component and a DNA methylation assay component, there is not actually sufficient evidence that Cologuard’s (very expensively reimbursed) DNA methylation assay adds any incremental effectiveness beyond its FIT component alone. Indeed, a careful reading of the logistic regression in the Cologuard algorithm demonstrates that a positive result on the FIT component alone is sufficient to trigger a positive result on Cologuard. In other words, if enough blood is present in the stool sample, Cologuard returns a positive result, irrespective of scores on the DNA assays.
If Cologuard has any sensitivity over and above its proprietary FIT component at all, it would be for detecting CRC-positive patients who for some reason do not have much blood present in their stool but have nevertheless begun to shed a significant amount of DNA. This is a point I plan to emphasize in presenting my reconsideration request at the upcoming public meeting this summer.
Against these two thoroughly documented critiques of the reimbursement level for G0464, Exact Sciences submitted a single-page letter thanking the Division for agreeing with its crosswalk proposal in the preliminary assessment. That was the full extent of Exact’s public comment on the issue. No pharmacoeconomic data was submitted to address cost-benefit concerns. Incidentally, Exact’s letter was dated October 30, two days after my comment letter was published and Cable Car’s website saw a spike in traffic from Madison, Wisconsin. If anyone at Exact Sciences is still reading: publish convincing evidence that Cologuard is cost-effective at its current reimbursement rate, and I will withdraw the reconsideration request.
Short selling can often feel like swimming against the tide, especially when regulatory agencies are involved. In this case, I have yet to hear a substantive response from Exact, CMS or any payor regarding the concerns raised in either letter. CMS is of course not obligated to act solely on the basis of public comments, but it is disheartening that the regulatory process did not directly address the merits of our commentary. Perhaps more concerning is that the politics of providing a ‘favorable’ reimbursement to the first test to go through joint CMS-FDA review appear to have outweighed any fiscal concerns. A different arm of CMS stated in its proposed coverage decision:
As permitted by §1861(pp)(1)(D) of the Act, we may consider the appropriate frequency and payment level in determining whether to expand coverage for new CRC tests. CMS has commissioned such analyses in all past determinations (FIT, stool DNA, and computed tomography (CT) colonography) and will re-analyze using the test parameters of Cologuard [emphasis added].
Yet Cable Car has recently learned that CMS and CISNET have yet to commence any new cost-benefit analysis of Cologuard. Why not?
Cable Car has a further FOIA request slowly wending its way through the queue (the FOIA staff at CMS have my sympathies—they are hard-working but underfunded), in hopes of understanding why NGS set a much lower payment level in one jurisdiction than the one in which Exact’s lab is located.
I look forward to discussing the appropriate reimbursement level at the public meeting.